Imagine a situation where world bank rolls out an RFP for adopting a custom solution for one of the new initiatives on ICT enabled education across 20 key geographies on their charter. Out of the many responses, world bank would get, imagine a response that comes jointly from Infosys, Satyam (not Tech Mahindra), Symphony services, Microsoft and Customer 24*7. Do you think it is possible? Do you think its sustainable? Do you think this is more required than desired? Do you think it is even desired?
Be it good times or bad, companies want to grab market share and hence money. But when the pie itself has been projected to grow at a rate faster than what the solution providers are growing at, companies would start to feel the need of increased collaboration, that too among competing companies. Appending each other’s capability and building a solid business case for themselves is the need of the hour. From a buyers stand point, it makes their lives easier by reducing time and complexities involved in hiring multiple vendors for multiple tasks.
This phenomenon is not new. For e.g. in China, Honda has a joint venture known as China Honda Automobile Company (CHAC) that uses the local production know-hows and procurement networks of its partners, namely Guangzhou Honda Automobiles Co. and Dongfeng Honda Engine Co. This collaboration not only helps Honda control costs through the economies of scale but has also helped them become the first passenger car maker in China to begin full scale exports to European region. The companies in the textile cluster in Tirupur, India are now jointly pitching to the customer and jointly bidding for contracts. Similar is the case with the Zhongguancun Software Park in Beijing, where all the top product engineering service providers (i.e. Neusoft, Beyondsoft, VanceInfo etc.) reside in the same park, in fact within a 100 mt. range. The furniture cluster in Razlog, Bulgaria is also a classic example of this phenomenon, where the companies split up the production and ship the final product under one brand. Flextronics in China is a similar story, where it acquires parts of its products from the local manufacturing cluster based companies.
Members of these kind of collaborations can effectively increase their capacity, capability and quality of the final output at an optimal, less than usual cost. The customers at the same time are happier and more comfortable. In times like as of today, this could be a “new” business model that can transform business in totality.