In the business world, gaining the “unfair advantage” often seems like a strike of great luck and timing (think Zoom and the pandemic). But in reality, it’s often the result of deliberate strategies and actions (in Zoom’s case, delivering a superior user experience). One great strategy: getting the unfair advantage through a best-in-class technology ecosystem.
We already see the power of a great technology ecosystem work in our daily lives, when our devices and services are able to connect and communicate seamlessly. That unified experience is at its best when our smartphones, laptops, smart home gadgets, and even our cars can communicate with each other, sharing data and functions, with different technologies speaking the same language, regardless of the brand. That ability to move from one device to another, switch between applications, and access our data from anywhere, is enabled by a best-in-class ecosystem that leverages the best products and services for our needs and preferences, with these products working great both on their own and as a connected system.
In the corporate world, a similar approach has worked very well for a number of companies. A great example is HARMAN, a global technology leader in connected car technology, lifestyle audio innovations, professional audio and lighting solutions, and digital transformation. Recognized for its contributions to vehicle-to-everything technology, HARMAN excels at creating a connected ecosystem that prioritizes personalization and driver assistance. Anyone that knows me, knows I love my BMW M4, and second only to its performance and handling, is the HARMAN technology inside and the convenience of easily accessing my music, messages and emails and more while on the go.
HARMAN has built a great technology ecosystem that has helped fuel their success, and as a partner, Qlik has experienced its value first-hand. So, I was curious to know, what is their secret sauce? His response: “A best-in-class ecosystem is not a technology decision.” I loved that… but what did he mean by it? I will explore this further in this blog…
Guiding Principles
Adopting a structured methodology or guiding principles is important when building your technology ecosystem, as it provides a clear framework that drives consistency, reduces complexity, and ensures that all components align with your organization's strategic objectives. HARMAN does just that, using their own, proven approach to help guide not only how they build their internal stack, but also how they design the innovative solutions they bring to market. That approach is built around five “S” guiding principles: Simpler, Smarter, Scalable, Secure and Successful.
Simpler
“Simplicity is at the core of everything we do,” he explained, and has played an important role in the success of their portfolio in the automotive space, for example.
When it comes to building their technology stack: “I don’t want a plethora of technologies and tools in my portfolio where it’s getting really difficult to manage, both from a cost perspective as well as from a user support and knowledge perspective.” He therefore recommends keeping your vendor mix as simple as you can, by partnering with a few companies that can provide a broad scope of interconnected functionality from a single, scalable platform.
Qlik’s own CIO Michael Gibeault agrees that simpler is better and adds: “My philosophy is to pick the best tool there is for the job, and let it do what it does: tech stacks get out of whack when there’s too much customization built into it.”
Smarter
“Everything we do at HARMAN has some type of intelligence built into it, which helps us personalize experience,” explained Nick. Internally, for example, the company has leveraged real-time analytics to make smart decisions during times of supply chain volatility, and has since added prompt engineering and generative AI to their ecosystem to get more predictive insights around what-if-scenarios.
As smarter intelligence continues to evolve quickly with machine learning and AI, his recommendation is to stay informed to understand what is being introduced or is incubating and emerging. I spoke to Lambert Hogenhout, Chief Data and AI Officer at the United Nations, and he agreed, adding: “We’ve established innovation teams to scout and evaluate new technologies: this enables experimentation by allowing non-standard solutions to be tested in sandbox or confined environments.”
Scalable
The Chief Data Officer of a global consulting firm concurred that scalability is key: “My advice is to design your stack with modularity in mind so that individual components can be upgraded or completely replaced with minimal disruption”. He also cautioned: “When building a tech stack of modular components, it’s easy to end up with a fragmented solution that delivers a poor user experience or challenges supporting an end-to-end business process, so it’s also critical to prioritize a seamless user experience.”
Secure
HARMAN has long prioritized regulatory compliance, most notably on data privacy through enablement of encryption, anonymization, and access control, with oversight by a committee. As the company planned its original pilot with generative AI, that committee was extended with additional outside expertise to help formalize a robust AI policy and establish a process to ensure it is followed by employees and by vendors. That policy continues to be refined as AI regulations, as well as learnings and norms, evolve, with the process also extending to fulfill new sustainability requirements for scope 1, scope 2 and scope 3.
If your company has not yet established an AI policy, you should do so now – and then also share it publicly, as we have done at Qlik. This is quickly becoming table stakes whether your company is large or small, global or regional, and no matter your industry. Bottom line: you can be certain that your employees and vendors are using AI in some form, so you need to make sure you govern it to safeguard your business. And if your organization, like HARMAN, is also deploying language models, it’s paramount to get your data foundation AI-ready to ensure that these models are not poisoned.
Successful
“We want to invest in things that have a really clear return on them”, says Nick about this final guiding principle for a best-in-class technology ecosystem. Technology is chosen not only to address use cases, but also for how it will impact outcomes, such as enhancements in productivity, working capital, margins and revenue conversion. And so, when considering a new vendor, they want to know how closely that vendor understands their business and the problems they are trying to solve, and how quickly they can get to ROI. Things that factor into their decision also include: examples of other companies for which same problems have been solved, how well the vendor roadmap is aligned with where HARMAN wants to go, what types of investments the vendor is making in their tech stack, and the availability of early general releases.
The vendor selection and retention process also involves a robust rationalization of the investments they are making or planning to make, down to the line item. “Six months in, we go back and validate against these quantitative calculations to see if we’re on track,” he explains. The UN’s Hogenhout and other CDOs I spoke to agreed, with one adding that doing a portfolio rationalization and assessment of value generation and adoption is critical: “We’re not just adding tech, but also decommissioning where needed.”
Why It’s Not About Technology
Whether you choose to borrow HARMAN’s “5 S” blueprint, or go your own path, I hope you consider the important takeaway I referenced earlier that, according to Nick, is too often overlooked: “A best-in-class ecosystem is not a technology decision.” Qlik’s Gibeault could not agree more: “Too often in my career, I’ve heard ‘if we just implement this new solution, our problem will be solved’, and that rarely works. It’s not about the technology.”
It’s about value
When justifying a new technology investment, Nick explains, “companies have a tendency to look at the cost and not the value; instead, they should focus on the lost opportunity by clearly laying out what the business cases are and the value you think the technology will drive in a qualitative and quantitative way.” As you do this, make sure you work collaboratively with your business stakeholders.It’s about trust
There’s no substitute for a trusted vendor partner who will be there, who understands your needs, and who can address these needs very quickly – and at the same time, maintains strong relationships with other vendors across the ecosystem. “During times of pandemics, wars, supply chain crises, you’re not thinking, ‘do I have the best tech stack’, you just want to know you have the best trusted partners to help you navigate through this and get you through to the other side.”It’s about people
As part of your decision-making process, it’s critical you also make sure you have the right skillset and talent in place to maximize the value of your technology investment. As well, you will need to keep pace with upskilling your workforce, to safeguard the future of your ecosystem.
I would love your feedback on this. What is your view on the best way to build a best-in-class technology ecosystem? And more generally, what are you doing to create an unfair advantage?
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Executive Insights and Trends