WITH THE EMERGENCE OF PLATFORMS ACROSS DIVERSE INDUSTRIES AND FUNCTION - FROM RETAIL TO HEALTHCARE AND FROM INDUSTRIAL EQUIPMENT AUTOMATION TO SUPPLY CHAIN, ‘PLATFORMATION’ IS NOW AN UNDENIABLE REALITY THAT IS REVOLUTIONIZING THE WAY WE DO BUSINESS
BORN DIGITAL COMPANIES AND PLATFORMS
The starting point for digital transformation is to look at what makes ‘born digital’ companies pathbreaking and successful.
Born digital companies adopt a platform-based business model fostering an ecosystem that’s most conducive for end-to-end business traction in a hyper-connected world.
What is a platform-based business? Here’s the definition: “A business based on enabling valuecreating interactions between external producers and consumers. The platform provides an open, participative infrastructure for these interactions and sets governance conditions for them.”
Platforms are revolutionizing the way we do business. Traditional business models are linear in structure with inputs at one end and output at the other. Unlike the linear mode of generating and consuming value in the pipe model, platforms serve as an ecosystem of value generation and consumption. They create value by tapping into resources that they don’t need to own.
The shift from the linear, resource-heavy, producerdriven pipe model to a demand-driven, circular networked model is enabling four big outcomes for enterprises – flexibility, scalability, mobility, and availability, through collaboration of diverse participants.
PLATFORMS— CORE DESIGN PRINCIPLES
Platforms, especially in the digital world, have been powered by a set of technologies such as social, mobility, analytics, cloud, IoT, AR/VR, and artificial intelligence amongst others. Of these, the first four— social, mobility, analytics, and cloud— are popularly referred to as the SMAC stack. When SMAC is compounded with other underlying technology approaches such as PaaS environments, microservices, DevOps, and automation, true platform based systems can be built.
These technologies yield the basic construct of platforms: three essential stacked layers of infrastructure comprising cloud, networking, applications, content, and APIs; the network layer that facilitates value exchange through social media, marketplaces, and other ecosystems; the data layer comprising analytics, AI, and other refinements; and the enveloping layer of access comprising mobile devices, IoT, AR/VR, and other edge devices.
These layers must be designed to yield the performance characteristics of a platform. According to an HBR article, by building a digital platform, other businesses can easily connect their business with yours, build products and services on top of it, and co-create value. This ability to plug-and-play is a defining characteristic of ‘platform thinking’. Further, the success of a platform strategy is determined by three factors:
A. Connection: how easily others can plug into the platform to share and transact
B. Gravity: How well the platform attracts participants, both producers and consumers
C. Flow: how well the platform fosters the exchange and co-creation of value