Breaking the code: new models for today's outcome-based partnerships

Everyone loves the movies. But whether we go out or stay in, we’re relying on countless, mostly invisible pieces of technology that create and coordinate our every experience. The theater complex where you saw Oppenheimer and Barbie (maybe in one day) this past year? Lights, temperature control and air circulation, complex systems for optimal screen resolution and surround sound in a dozen or so small theaters—not to mention making sure that the hot dogs, popcorn, and sodas are to our liking.

High expectations

We consumers put extremely high demands on companies to provide just the right experiences, hour after hour and day after day. Which means that those companies—Cisco’s customers and partners—face increasing pressure to provide complex, delightful, differentiated experiences, all while remaining flexible and increasing profits.

They simply can’t do it alone. The demands are too complex, the costs of doing business too high, the pace of change too fast. But we CAN do it together—we’re greater together! Partnerships are the way to do business because they’re the best way to create the experiences—outcomes—that consumers want so badly.

And we’re already doing it. Last year, 82% of Cisco partners said they are growing their managed services, and 95% of Cisco’s managed services were sold through partners.

In EMEA, where Cisco Live happens next week, we have a $42B managed services opportunity and projected double-digit growth in the complex areas of security, observability, and Datacenter. In one example, a European auto and truck manufacturer established an agile, centralized IT environment, with managed hybrid cloud and security, which enabled staff to prioritize innovation, streamline secure network access, and meet sustainability goals. The result? A 60% reduction in energy consumption.

DNA and dominoes: A simplified model

With partnerships firmly established, let’s talk about what they mean on a granular, practical level. Exactly how does a partner make this shift to the new ecosystem? We need a model, a blueprint, a vocabulary to help them build their services, identify where they can specialize, and determine where they can be profitable. We need to connect the dots.

Let’s go back for a moment to the movie theater. It’s worth-leaving-the-house-for, multi-sensory outcome is the result of multiple technologies, multiple partners, whose services are stitched together in complex configurations. That stitched-together set of services is an “outcome chain.” It’s an evolution of the traditional “value chain” which involved consecutive steps in providing services, and it’s a more detailed, more accurate rendering of a service stack.

The outcome chain gives us a way to talk about who does what—identifying roles and specializations—and allows for the flexibility and composability required to create outcomes.

But it can be hard to conceptualize. These analogies may help.

We can think of the outcome chain as a bit like DNA: structured yet flexible, multi-faceted and built for change. A close look reveals the beautiful double helix complexity: parallel, twisting strands like rails of a spiral staircase, held together by pairs of nucleotides that look like stair steps. The flexible structure is what allows DNA to do the work of life as it does, unwinding, opening, replicating, transcribing, closing again, over and over and over. Form is function.

The game of Dominoes offers another good analogy. This classic game has a few basic rules, so patterns and connections exist between the dominoes—the structure as it spreads across the table is not random. Yet instead of just one straight line of tiles, each game generates a range of different lines feeding into each other, with a range of points of entry depending on specific rules and relationships.

Neither DNA nor Dominoes are 100% handcrafted, bespoke patterns—those just aren’t scalable. Similarly, the outcome chain is a model that sits right in the sweet spot: flexible enough to accommodate the shifting nature of partner relationships in outcome creation, yet structured enough for clarity, efficiency, scalability and repeatability.

The EDGE framework: Simplifying the outcome chain

It clarifies how all the pieces come together in composing an outcome. In other words, it reveals who can do what. Partners are increasingly moving towards specialization, taking on specific roles or pieces of the outcome. Other partners may become orchestrators who tie all the pieces together and take on some of the delivery. The outcome chain, with its bird’s eye view, helps partners identify which part they want to take on, and how their part connects to others.

Yet these very choices can feel overwhelming. It’s like opening a menu in a new restaurant and seeing long lists of tempting dishes: you may need some guidance. When you divide that menu into parts (appetizers, salads, entrees, and desserts), it’s suddenly much easier to find what you want.

The equivalent of that diner-friendly menu? The EDGE framework—a Deloitte and Cisco whitepaper. It’s a way of simplifying the various structures of outcome chains by identifying four basic functions or stages, so partners can more easily identify which stage of the outcome chain is their best fit. Here are those EDGE stages:

• Explore. The customer’s objectives get clarified; discovery, strategy and modeling follow.
• Design. The conceptualization stage, where different versions of an offer’s concept and architecture are developed.
• Guide. This is about deployment and operation: solution rollout, installation and integration.
• Experience. Support and maintenance of the solutions, with adjustments and improvements made as needed.

Each of these stages can naturally be broken down into a range of more detailed service segments and levels of sophistication. Each stage and segment calls for different strengths, strategies and resources, and each yields different profit margins on different timelines. The point is, among all this complexity and flexibility, EDGE offers a structure that helps partners identify their best fit in the outcome chain.

The partnership ecosystem is an exciting but complex world! The outcome chain model and the EDGE framework give partners the tools to navigate this rich ecosystem with clarity, efficiency, and sustainability. Almost as easy as going to the movies…. or to Cisco Live EMEA in Amsterdam. I’m looking forward to seeing all our partners there and talking more about where they fit into the outcome chain.

Partners: Are you attending Cisco Live EMEA in-person?

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