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

Dataquest - - DIGITAL PLATFORMS -

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

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