4.2

Ecosystem Management

Ecosystems are supplier networks built around a specific ser­vice, technology or system. Natural ecosystems should be preferred, as they are more efficient and innovative than partnerships formed around a company’s sourcing function only.

Management and development of ecosystems is a prerequisite for successful sourcing that supports business needs. Ecosystem Management is discussed in more detail in Chapter 2, Enterprise Development.

Ecosystem Management (as in Enterprise Development)

Ecosystems are networks that are built around a significant business revenue or value. They are formed by companies and organizations which have products or services that complement or supersede one another. While large organizations may have the power to compel suppliers to work together, the organically-formed ecosystems are the ones that benefit the Business most. These organic ecosystems are made up of suppliers whose roles complement each other and who promote efficient and innovative cooperation.

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Figure 2.4.1 The Ecosystem

When making sourcing decisions, IT should consider ecosystems and their limitations. By choosing to work with suppliers who operate in the same ecosystem, IT ensures a natural and effective cooperation. A supplier network built in this way is more efficient than a customer-specific network of suppliers.

Figure 2.4.1 shows an example of ecosystem management which concentrates on satisfying current and future needs of the business operations according to the supplier strategy.

Ecosystem management is based on understanding the business value chain as well as active communication with the relevant stakeholders. Further, effective ecosystem management is characterized by the following:

  • co-created steering and roadmaps to boost the innovations
  • joint end-to-end KPIs and performance dashboards
  • unified processes and quality assurance across all suppliers
  • joint operative model ensuring the continuity and flexibility

When applying modern ecosystem management principles there is less and less need for traditional, control-based supplier management activities such as:

  • suppliers and technologies are categorized
  • relationships are managed based on standardized processes
  • governance and other supplier management interactions are orchestrated by trained personnel
  • supplier performance is measured using service delivery metrics
  • active contract management handles problems in service delivery
  • uniform documentation and templates reduce overlap and ensure relevant issues are taken into account in tendering and contracts
  • information security is safeguarded with adequate technologies and procedures as well as prioritized based on sensitivity of the data
  • data is categorized and labelled based on criticality

Service integration is important in service delivery cooperation and in managing complex ecosystems. Opportunities for improving cost efficiency e. g. through economies of scale and other synergies are monitored regularly. Innovation and roadmapping of new services are essential for continuous development of supplier ecosystem maturity. The role of joint development increases as the relationship scale grows and is essential in strategic relationships. End-user satisfaction should be surveyed as the target is to offer a seamless end-user experience.

Ecosystem Management Life-cycle

As ecosystems go through their lifecycle IT should take an active role; the role of a declining ecosystem should be reduced and that of a developing one increased. Also, the role of the parties operating in the ecosystem should be identified. The same supplier can act as the main partner in one ecosystem and have a minor role in another. When sourcing, the strengths of the ecosystem and the roles of the service providers in it need to be evaluated.

Supplier categorization is conducted using criteria such as service business criticality, spend, and type of service offering. Primary supplier relationships can be described as strategic and long term oriented. Primary supplier often acts as a prime integrator for a number of other suppliers. Complementary supplier relationships are managed with layered governance models and these suppliers typically have specialized capabilities. Utility supplier relationships tend to have a simple structure due to the commodity-type of services.

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