Artificial intelligence (AI) is quickly becoming an essential copilot in business applications ranging from customer service and sales to cybersecurity and supply chain optimization.
As that occurs, partnerships with technology providers have become vital in integrating AI into the broader technological ecosystem. But these partnerships are taking a different form from those of the past: A single firm is no longer in control of the entire deal with the other providers playing a secondary role, as we so often saw in the days of “white-label” and “private-brand” partners.
With the advent of AI, the single-firm approach has aged quickly. In an AI-powered world, the entire stack of the technology partners’ ecosystem brands and services weave together AI offerings from a plethora of enterprise technology. AI is changing entire business processes and how work is done across the enterprise. Amid complex technology changes such as these, there is power in partnerships that can help firms achieve their goals while limiting their risks.
How Partners Work Together in the AI-Centric Ecosystem
Technology partnerships, such as the recently expanded commitment between KPMG and ServiceNow and the AI Lighthouse initiative by ServiceNow, Nvidia, and Accenture, enable companies to access state-of-the-art AI capabilities without the need to develop the technology in-house. This is a good thing. But it’s different than the partnerships of the past.
As an example, KPMG and ServiceNow are expanding their alliance to deliver AI-enabled tools, focusing on areas such as workflow design, change management, and process automation. In the past, this would have been led by KPMG and the ServiceNow brand, and support would have been, at least in part, buried behind the KPMG service. Because the channel was built on the brand that was selling, this made sense.
Now, firms like KPMG and ServiceNow are coming together to bring new offers to market that aid in the development of AI-powered businesses, with each firm having an equal stake in the go-to-market and customer interaction. Because these tools are complex and deliver step-level change, there is a need for strong partnerships like these to deliver on AI’s promise. That’s a game changer: customers will now have access to the best and brightest at all these tech firms for, in many instances, the first time.
The AI Lighthouse initiative is another example of changes in the partnership dynamic. It is a strategic collaboration aimed at accelerating AI adoption across industries, underscoring the importance of AI innovation and co-creation among tech partners. These partnerships will provide companies with the resources and expertise necessary to leverage AI technology and integrate it into their existing systems and workflows. By doing so, partners help businesses to fully exploit AI’s potential, enhance their competitive advantage, and drive their digital transformation journeys. By working together in front of the customer, rather than behind the scenes, there will be faster innovation, quicker market-ready offerings, and more responsive support.
There will also likely be increased selling, general, and administrative (SG&A) costs as these partners bring the offer to market. After all, in the past, the selling partner took on most of the SG&A costs. That impact is yet to be sized by the industry as companies race to the latest AI partnerships, but it will need to be closely managed to make this new model work for shareholders and investors.
Opportunities and Added Value
As you read these latest AI partnership announcements between industry powerhouses, you may wonder if the traditional channel, made up of smaller, more localized and more industry-focused providers, will have a place in this market emerging around copilots. My read: there’s no reason to worry because there are multiple opportunities for smaller partners.
For instance, smaller partners can differentiate themselves by offering niche AI tools tailored to specific industries or business functions. They can also provide personalized services such as customized AI implementation, consulting, training, and ongoing support.
Smaller partners can also add value by assisting businesses in understanding the potential benefits of AI and helping them create a comprehensive AI strategy, ensuring that the AI technology is used to its full potential, enabling businesses to enhance their customer experiences and operational efficiency.
Smaller partners can take advantage of the AI copilot phenomenon by taking the following steps:
- Identify the niche: Smaller partners should identify a niche where they can provide a unique value proposition. This could be a specific industry, business function, or even a particular AI technology.
- Partner with AI technology providers: Forming partnerships with AI technology providers can help smaller partners gain access to cutting-edge AI technologies and enhance their service offerings.
- Invest in AI skills and knowledge: This could involve providing training for their employees or hiring AI experts.
- Focus on customer success: This could involve providing ongoing support and consulting services to help businesses successfully implement and use AI technologies.
Handling AI Risks
Despite the many opportunities, the integration of AI technologies also poses several risks related to data privacy, security, and ethical considerations. For instance, using AI technologies can increase the risk of data breaches, especially if the AI system is not properly secured. And since these new partnerships will expose multiple firms to customer data, the answer to risk elimination and risk management may be less clear than they were in the past with a single partner and therefore a “single throat to choke.”
The average CISO may therefore push back a bit on how the risks will be managed and governed. Partners like KPMG, ServiceNow, Nvidia, and Accenture have a responsibility to help businesses navigate these risks, ensure that AI technologies are used responsibly, and embed ethical considerations into their AI deployments. They also need to create a roadmap for risk mitigation that covers all partners in the mix.
Evolution of the Ecosystem
The emergence of the AI copilot has accelerated the evolution of the technology partners’ ecosystem. As part of this evolution, tech partners have expanded their offerings to align with the rising demand for AI capabilities. This is just the start.
I believe we will begin to see AI partnerships between enterprises (think Ford, Walmart, Bank of America) and a handful of technology providers (think Microsoft, ServiceNow, SAP) plus consultants (Accenture, PWC, KPMG) that will package their AI offerings for vertical industries. As an example, Walmart, Microsoft, ServiceNow, and Accenture could bake a retail AI package that could be delivered as a subscription service to smaller local retailers to implement an AI-powered offering for their business.
These partnerships in the future will not only enable companies to automate and optimize their business processes but also pave the way for innovation and co-creation, setting new standards for AI implementation and adoption and bringing AI down market to help even the smallest firms benefit from the technology.
The technology partners’ ecosystem is integral to the widespread adoption and integration of AI technologies. The rise of the AI-centric “copilot” phenomenon is triggering a significant evolution in the technology partners’ ecosystem, aligning it with the growing momentum of AI to create the latest big bang opportunity in tech. As the partnerships play out, it will be interesting to watch their adoption, impact, and results.
As always, happy partnering.