Pros and Cons of System Integrator Partnerships: Six Tips for Success

A system integrator partnership is a mutually beneficial relationship between two companies, where the system integrator (SI) provides expertise in different technologies and software solutions to create an optimized and cohesive system. 

This type of partnership typically involves one business with deep knowledge of system integration, and the other business that provides the tech product or service.

System integrators often partner with Independent Software Vendors (ISV) who develop, market, and sell products that are designed to run on third-party platforms. These organizations specialize in creating software solutions for a specific niche or industry, and their products are generally sold to end-users or through channel partners like system integrators, distributors, and reseller programs.

System integrator partnerships have become increasingly important due to the growing complexity of software and the need for more integrated solutions. In fact, the global system integrator market size was estimated at $21.90 billion in 2021 and is expected to exceed $23.58 billion in 2023, and reach $34.59 billion by 2027, with growth at a CAGR of 7.91%.

One reason for this type of growth is the increasing adoption of cloud-based programs and the need to integrate them with legacy systems. As more companies move their operations to the cloud, the demand for systems integrators continues to rise. 

These relationships can impact conversion and retention by improving the customer experience, creating opportunities for customization, and leveraging scalability. SIs provide value-added services that streamline implementation for ISVs.

In this article, we’ll define system integrators, explore the pros and cons of system integrator partnerships, and look at some key examples. We’ll also provide tips for creating your own partnership and solutions that can drive your top initiatives today.

What is a System Integrator?

A system integrator is a type of channel partner that specializes in auditing and managing improvements to your business processes and service providers. They offer specialization and tech support exactly when needed, to help a business achieve greater efficiency and provide an elevated customer experience. System integrators bring order to disparate suppliers and can specialize in any (or all) of the following:

• Implementation
• Planning and coordinating
• Scheduling and testing new technology
• Improving and maintaining a computing system

The job of the SI is to ensure all subsystems and components work together seamlessly to achieve a desired outcome. They can work across a variety of industries, including engineering, automotive, manufacturing, and IT. 

SIs also work with different types of technologies, including software, hardware, and networking systems. System integrators sometimes provide additional services like data management and cybersecurity to ensure your integrated system is secure, reliable, and grows with the business.

The primary goal of a system integrator is to provide a comprehensive and cohesive system of technology that meets a company’s specific needs. They do this by leveraging technical support, expertise, and knowledge of various platforms and apps to integrate them into a unified system. Overall, SIs play a vital role in helping a business reduce costs, streamline operations, and improve efficiency.

Global System Integrator (GSI)

Global system integrators have hundreds of thousands of employees and offices all around the world. Their clients include Fortune Global 500 companies and enterprise organizations. 

GSIs can generate millions of dollars in annual revenue with a single client, so partnering with a GSI can be incredibly advantageous for an ISV. However, it’s often difficult for smaller ISVs to get their foot in the door.

System Integrator Partnership Success Stories

For success stories, there is a multitude of top brands that use a technology partner to identify opportunities in their workflows, including names like:

• IBM: Has a large ecosystem of SI partners to integrate their various features, including analytics, cloud computing, and AI.
• SAP: Partners with SIs to help customers implement ERP solutions and other software platforms.
• Microsoft: Works with SIs to help customers integrate with MS products and services like Dynamics 365 and Azure
• Accenture: A global SI that works with a range of tech partners, including Salesforce, SAP, and Microsoft.
• Cisco: Partners with SIs to help clients implement communication and networking solutions, including security, collaboration tools, and data centers.

The list could go on. Other brands that have found incredible success with this path include Amazon, Dell, Deloitte, and Fujitsu.

Benefits and Drawbacks of System Integrators

What is a channel partner? It’s a business or individual that will collaborate and help you sell. SIs do this, as well as managing data and optimizing processes. They also benefit other clients by allowing the ISV to spend more time on product growth and close faster deals. However, just as there are many advantages to this type of partner program, there are also drawbacks. Let’s look at both:

Benefits of System Integrators

• Cost-effective: System integrators can save you money by reducing the cost of maintaining multiple systems. They help to maximize channel revenue by consolidating important programs.
• Flexible: SIs provide custom solutions that meet specific business needs and tailor solutions based on the top goals of an organization.
• Eliminate Risk: Hiring an SI will reduce the risk of errors and delays. It will offset any compatibility issues that may arise when integrating various systems, minimizing downtime and avoiding costly mistakes.
• Expert Advice: System integrators possess specialized knowledge for integrating different systems and technologies. This allows them to provide a much higher level of service than if a customer attempted to do it alone.

Drawbacks of System Integrators

• Pricing: The cost to hire an SI can be quite expensive. This is especially the case if you’re running a small operation that may not have the budget to invest in these types of services. Additionally, the cost of an SI may increase if extra work is required to combine your programs.
• Time-consuming: The process of marrying various systems can be time-consuming, leading to delays in implementation, and impacting a company’s ability to respond quickly to shifts in the market.
• Dependency: A business can become dependent on an SI for ongoing maintenance and management of an integrated system. This means if any issues arise, a company must rely on this one entity to fix them.
• Communication: If there is a breakdown in communication, it can lead to delays and misunderstandings about the project. Both organizations must effectively convey their messages for everything to run smoothly.

Although system integrators bring many things to the table, there are some potential setbacks, so it’s important to carefully consider the business vertical. Put your budget and needs first before deciding whether to hire an SI or attempt it yourself.

How SI and ISV Work Together

A system integrator acts as the software an independent software vendor (ISV) uses to improve the client experience. SIs and ISVs work together to provide customized solutions to companies and focus on creating solutions that solve specific challenges.

How it Works

SIs sell the software of their ISV partner in the early stages of the sales cycle and then hand the lead off to the ISV for contract and payment. Once the deal is signed, the SI partner helps the customer adopt the platform and drive value for the remainder of the contract. The ISV may also have a professional services team that can provide additional support in tandem with the SI for specific use cases or customer projects.

If the customer’s relationship with the SI ends, they can still continue using the ISV’s product since the contract remains with the ISV. Alternatively, if the client chooses to no longer use the ISV’s product, the SI can recommend a different one to suit their needs.

SI vs. VAR

SIs are often confused with value-added resellers (VARs) who customize an ISV’s product to create additional value, typically for a single product or use case. After that, the engagement is typically over. In contrast, an SI has an ongoing relationship with the client and often provides consultative services and improvements to the client’s technology and workflows.

System integrators can be highly specialized, with roles like:

• Managing Director, P&L (Product and Loss)
• Data Engineering and Visualization
• Cloud Architect

Additionally, a system integrator should not be confused with a managed service provider. When considering an SI, or an MSP vs Var, the latter are much more similar. The time spent with the customer is the main difference.

Ways That SIs and ISVs Collaborate

Customization

System Integrators provide customization to tailor products provided by the ISV to the specific needs of a business. This includes custom reporting, workflows, and dashboards.

Support and Training

After platforms are integrated, SIs provide ongoing support and maintenance to ensure the integrated system continues to function properly. They hire employees who have experience with the software and train them to become strategists. SIs build consultative services into their client fees, who typically pay the ISV directly.

Integration of New Product

ISVs provide software that solves specific problems, while an SI integrates these programs into a larger system that meets the unique needs of a business. For example, an ISV might provide a customer relationship management (CRM) tool, while the SI is responsible for integrating it with an ERP or marketing automation software.

Testing

An SI works with an ISV to test products in a real-world environment to ensure they work seamlessly with other technologies and systems.

Marketing

SIs demonstrate success through case studies that feature their ISV partner’s software, research on predicting trends, industry-specific surveys, and a multitude of other business insights. These marketing materials show potential clients how they can adjust their business to stay ahead of the competition.

When SIs and ISVs work together, they are able to provide a more comprehensive solution that addresses the specific needs of a business. It’s critical that both parties communicate effectively throughout the process to ensure everything runs smoothly.

6 Tips for Partnering With a System Integrator

In this age of digital transformation, a system integrator provides a variety of opportunities for independent software vendors. Here are a few tips for partnering with a system integrator:

Be Resourceful

An SI partner should always be kept updated and well-informed on certification courses and partner enablement resources.

Define Ecosystem Ops

It’s important to establish ecosystem ops, which is simply a set of scalable and repeatable practices for your team to effectively communicate and sell with your SI partner’s people. 

Since the SI has a stronger relationship with the customer, the sales team will most likely have a hands-off approach until the contract. However, the SI should always maintain open communication with ISV sales reps throughout the sales cycle, so the team knows things like:

• How the deal is going
• What the timeline looks like
• If sales need to offer any support

Whatever the case may be, it’s important that the ISV salespeople know how each SI partner prefers to collaborate.

Keep the Relationship Honest

Transparency is the key to any successful business relationship. Be upfront about how much (or how little) you want the professional services team to be kept in the loop. This is especially important when it comes to use cases and pain points. You don’t want the system integrator partner to lead customers down the wrong path or lose trust in the product. Catching a mistake early on is better for all parties involved.

Invest in a Partner Ecosystem Platform

Invest in a partner ecosystem platform (PEP) or other SaaS to identify overlapping opportunities with your SI partners early on in the sales cycle. Sometimes, getting a product included in an SI partner’s RFP is critical for driving partner-sourced sales.

Track Attributions and Results

Invest in software for attribution tracking to demonstrate the impact an SI has on revenue from the beginning. This allows a business to further invest in the resources and tactics that create the most success.

Connect With Executives and Be Ready to Pivot

Connect your C-suite executives with the SI at the start so they can build and establish stronger relationships throughout both teams. This can heavily influence the project’s success over the long term.

Managing Your System Integrator Partnerships

System integrator partnerships have evolved to meet a growing demand for integrated solutions that help a brand more effectively streamline operations, improve efficiency, and gain a competitive edge.

An SI adds value and expertise to your products and services. They help to eliminate risk, are cost-effective, and create flexibility on the buyer’s journey. An SI assists with everything from integrating a new product to training, customization, testing, marketing, and more. SIs can operate like a right-hand man, and are essential for today’s purchasing preferences. That’s what makes Relevize such a good fit.

Relevize is the only SI on the market that was developed for partners and sellers to maximize their channel sales revenue throughout the partnership lifecycle. The system helps a brand seamlessly onboard new partners and launch comprehensive, paid campaigns, with the click of a button. As a result, an ISV can precisely understand where quality leads are coming from and take immediate action in real time.

The Relevize platform was designed to help businesses drive brand awareness and high-quality prospects through their channel partners. A company can gain visibility through every part of its SI’s pipeline and instantly ascertain which programs are successful, and which may need some help.

Relevize is an amazing SI partner that allows organizations to reestablish meaning around a 'partner first' attitude. Ready to get started? Sign up for a free demo today!