If you Google the phrase, “Today every company is a technology company,” you’ll get over 3 million results. In the late 2010s, it was a popular meme and a useful one for expressing the impact digital technology was having on companies in every industry. But it also blurs the distinction between companies that adopted and have been transformed by emerging digital technologies and those that had a hand in creating and refining those technologies. True “high tech” companies.
In this blog, I’ll talk about those companies, the challenges they’ve faced, and the solutions they’ve developed to support their own digital transformations.
In Jade Global’s technology practice, we work primarily with companies in five verticals: semiconductors, device manufacturers, telecom, software, and social media. Semiconductors, of course, is the “mother ship.” Without semiconductors, there is no high tech.
Over the last decade, companies in each of these verticals have faced challenges not necessarily unique to the technology industry. Like many companies, they’ve had to experiment with different business models. For example, some semi-conductor companies adopted fabless manufacturing — concentrating on design and outsourcing chip fabrication.
This shift is common in device manufacturing as well. For telecom, software, and social media, several variations on as-a-service pricing are in play, such as usage- and fee-based. Rapidly changing regulatory and tax environments, especially for global companies, also require constant attention.
But more than companies in any other industry, high tech companies must “grow or die” — or if not die, at least risk becoming an also-ran in a highly competitive and volatile marketplace.
Grow or Die
That seems like a stark description and yet it is an acknowledged reality in high tech. One of the primary reasons constant growth has emerged as a unique driver in high tech is the falling cost of doing business. It’s easy for a competitor to imitate your product and your business model — especially in software or software-supported business services. Take ERP, CRM or, for that matter, integration. There are many providers. Some have been around for a long time, others are startups. And new entrants pop up constantly. It’s also relatively easy to create a micro-segment of a market, so you can dominate it. This is simply an extension of the best-of-breed model.
Small companies need to grow to stay ahead of the pack. Larger companies need to grow as well to increase market presence and to acquire smaller competitors whose technology they can build into their products. A potential threat and disruption becomes a new feature and competitive advantage.
In the early life of a high tech company, growth supersedes profitability. Just look at Amazon. Founded in 1994, Amazon didn’t turn its first profit until 2001. Likewise, Salesforce has not been overly concerned with profits, choosing instead to focus on total revenue, a.k.a. growth.
The key is holding the cost of operations down while growing revenue and market share. That means balancing continuous growth with efficiency by optimizing systems and processes. You can’t grow headcount at the same pace you’re growing your business. It doesn’t make sense financially or culturally.
How do you drive efficiency while you’re trying to grow at a very fast pace? By investing in technology, specifically process automation and optimization. The newer technology stacks augmented with artificial intelligence increase the potential for automation 10X or 20X beyond what was possible only a few years ago.
The Jade Global High Tech Center of Excellence
Jade Global has 150 clients in the high tech space; many of them have been with us for a decade or more. So, we understand the challenges they’ve faced in the past and how they’re adapting to new business demands. Even before the term digital transformation was in use, these companies were on that path.
Regardless of what it’s called, the unifying concept is efficiency. Do the most with the fewest resources while achieving the most optimal results, whether those results are in sales, customer experience, finance, supply chain management or decision making. Fifteen years ago the path to efficiency was through one, monolithic system. Now it’s integrating best-of-breed systems. But fifteen years ago integrating systems was time consuming, costly and complex. Now, within a week or two weeks, you can build very complex integrations into systems.
People are open to the best-of-breed approach, so you see in every application area dozens of products with an ecosystem of dedicated vendors. Take contract lifecycle management (CLM). Fifteen years ago there were few or no options. Now, it’s a vibrant application niche. Industry analysts estimate the total size of the market at more than 200 vendors.
So we’ve built a center of excellence to harvest what we’ve learned in working with our clients over the years.
What best practices have emerged to make systems and processes more efficient? We recognized a common set of traits across all these companies from which we’ve developed a high tech solution that standardizes various approaches to optimization and automation. It helps companies avoid common mistakes, mistakes we’ve seen firsthand. And it presents our knowledge about how the technology stack can help high tech companies maintain the growth they need to survive while maintaining and increasing operational efficiency.
The Jade Solution for High Tech Companies
The Jade solution includes:
- 120 use cases covering all types of sales across five verticals
- 70+ common business processes
- 40+ pre-built integrations
- 5 reference architectures
- Several purpose built solutions, including Canvas, a robotic process automation (RPA) solution and Xenon test automation solution
For software, sales uses cases include subscription, fee-based and usage-based, as well as renewals and upgrades. There are also reseller and distributor use cases. Semiconductor companies and device manufacturers have their own set of standard use cases, with variations. Likewise telecommunications firms and social media platforms.
Supporting these use cases are more than 70 common business processes, which can be used by a majority of enterprises, say 70 percent, with 30 percent needing customization of a base process.
Of course, efficient business processes rely on integrations with best-of-breed applications, such as customer relationship management (CRM), software configuration management (SCM), and enterprise resource planning (ERP). We based our solution framework on Salesforce for CRM, NetSuite, Oracle Fusion, and Oracle E-Business Suite for ERP, along with applications including SCM, licensing, usage mediation applications, third party billing, and logistics, with the Boomi AtomSphere Platform for integration.
This also allows integration with many other best-of-breed applications, as well as marketplace apps, such as Amazon Marketplace or Google Play, currency converters, licensing applications, electronic design automation (EDA), and EDI for payment processing. Similarly, five reference architectures fit most high tech business models.
As we were developing the solution, we realized that some “white space” exists in the best-of-breed landscape. There isn’t an out-of-the box application for every conceivable scenario. For example, because none existed, we created an application for semiconductor companies that need to manage obsolete inventory. Now this is a solution that we can offer and customize as part of the portfolio for semiconductor and device manufacturers.
The Value and Flexibility of Demo-based Design
Every company that sells products offers demos, fully functional or scaled down, to show you what a product can do before you buy it. So, we’ve adapted that approach to our solution framework. We can show a potential customer, or an existing one looking for process improvements, an entire set of use cases with pre-built processes, integrations, and reference architectures that are based on 15 years of experience in the high tech space. So, our solution is essentially “multi-product.”
And unlike a typical product demo, we can take a use case and show how processes work end to end — say from a subscription-based sale to how that sale integrates with multiple systems throughout the company. Our customers can see that. They can see where this pre-built process may need to be modified for their business. But they don’t need to start from scratch. The bulk of the design work is done. Instead we’re focusing on refinement.
All our designs are demo based. When customers see them, that’s what drives the requirements. The feedback loop between design, refinement and implementation is concrete. They can see what works or doesn’t work for them, end to end. And if there’s a gap, that’s what we focus on. It reduces development time by 50 to 60 percent.
In my next blog, I’ll focus on how the Jade Global solution streamlines and automates one process: quote to cash.
Read the solution brief “Jade Global’s High Tech Solutions” to learn more about Jade Global’s solution for high tech companies.