Businesses are using digital platforms to provide products and services in ways that would have been impossible just a few years back. And yet few would claim to understand the full capabilities and implications of today’s complex platform ecosystems.
This piece highlights key points from Part One of our three-part “Technology in an Uncertain World” podcast series, and discusses the emergence of the modern platform ecosystem, one that can radically reconfigure today’s business operations. It also explores how businesses build and use such platforms, and the extent to which regulations can, and should, constrain the limits of such technology.
New paths to business value
We are all familiar with the trading platforms characterised by household names such as Amazon and eBay. But the ‘modern platform environment’ goes further, using intelligent building blocks which are connected to deliver many complex capabilities across processes, products and services.
“Platforms can take many shapes,” says Cristene Gonzalez-Wertz, senior researcher and advisor at DXC Leading Edge and an expert across electronics, manufacturing and utilities.
“Some are internally focused, working for instance, on productivity gains. Others target markets and facilitate connections across ecosystems – they act like glue, bringing people together and allowing them to interact in favourable ways. Others offer high-value customisation, enabling new capabilities.
“Digital is at the heart of them, allowing them to create new target operating models. They focus on new paths to value.”
Such platforms give a whole new level of meaning to data within a business operation, delivering actionable business intelligence more quickly than ever before. Consequently, platforms can be used to design better elements, improve services, and even create new products and business lines.
“The platform becomes the organisation”
Ultimately platforms can manage themselves.
Take, for example, IT processes. Over many years, businesses have become well-acquainted with the IT service management lifecycle. That knowledge can be used to enable a digital platform to take over such a lifecycle, plugging in artificial intelligence (AI) to make it smarter.
These platforms can manage everyday functions, detect and resolve issues quickly, predict and prevent future problems, and become a business’s ‘silent operations’ – managing and fixing processes behind the scenes.
Taken further, this type of heavily digitised platform can manage a whole section of a supply chain in IT, marketing, manufacturing, and so on.
“They become the organisation in that they become how people do their daily work, and how people create new products and services,” says Bill Murray, senior researcher and advisor at DXC Leading Edge.
Case study: Airbnb’s platform evolution
Such platforms have already transformed the companies we know. Take Airbnb as an example. On a basic level, it connects buyers and sellers in a marketplace. But its website, app and what it does day-to-day relies on a platform made up of lots of different and smaller blocks: the search functionality, the payment system, the notification system, the recommendation system, and even the pricing model.
All of these separate chunks of code are connected to form the user flow we see today, all created at a certain point either by another company that sells that as a service to Airbnb, or internally in response to some user need.
“The leaders of these platforms are the kind of people that would work in a fast-moving consumer goods (FMCG) firm,” says Murray. “They know there are launch, adoption and scaling phases and every day, they are looking at customer feedback and tinkering with that product or service to satisfy that feedback. They are brutally customer-centric, often drafted in from the fast moving consumer goods world, and they are often not technical, but they know how to develop pull rather than pushing products and services onto users.”
The platform as an ecosystem that enables customer conversations
Such platforms are increasingly described as an ecosystem or environment, but they are not the same thing. Rather, the ecosystem develops around the platform, enabled by the connections and recommendations the platform permits.
“An ecosystem delivers value through the exchange of participants, as opposed to a single one-way out from the company to the customer. Ecosystems allow new ways of thinking about how you deploy your assets and who has to know what. You go from being just the operator to enabling ways for people to have conversations without you,” says Gonazalez-Wertz.
Mark Roboff is Vice President for Aerospace and Automotive at SparkCognition, as well as CEO of SkyThread, a blockchain-enabled data and technology ecosystem.
In many businesses, particularly those with supply or value chains, there are lots of stakeholders involved in numerous complex interactions.
“You may not have any one enterprise, or all the information you need to be able to run that business effectively,” Roboff says. “So SkyThread is a platform to facilitate different companies to share their data together without a traditional middleman, with a strong focus on data governance that is implemented into the data network stack.”
According to Roboff, the most important aspect of the job is fostering the ecosystem, rather than simply building the platform.
“To me, facilitating such a platform has nothing to do with your architecture, or your chosen technology stack or how you implement it. We obviously need to make good choices there, but it’s not about the technology, it’s about how you set up and position the business,” he says.
Act in advance of platform regulation
With platforms offering ever more complex and sophisticated interactions, more regulation is inevitable, even if it remains light at present around platform development.
“In many important areas of tech, policy discussions are five to ten years behind the adoption of technology. And enforcement is even weaker, because a lot of the laws are very recent,” says Megha Kumar who leads Oxford Analytica’s work in the Global Technology, Media and Telecommunications (TMT) sector.
Having said that, she thinks the tech industry has now matured to a stage that businesses should expect regulations and legislation to tighten, particularly in areas such as antitrust, cybersecurity and content moderation.
Gonzalez-Wertz argues companies will always be at an advantage if they act strongly in advance of regulation.
“Even if that means foregoing revenue, even if that means you make some trade-offs around the data you’re collecting. Because once customers start to distrust [the way you use data], they will always have that level of distrust, and it can in fact get worse,” she says.
Today’s businesses cannot simply hire a software engineer and tell them to go and build a platform. Services need to be highly flexible and customer-centric, requiring platforms that are built across smaller, intelligent building blocks, considering the kinds of data generated and how data can be used to create new products and services within a regulatory framework that protects consumers.
It is thinking that goes far beyond technology, in which platforms shape the environment in which we all interact across the digital world.