Enterprises need to create a flexible ecosystem to survive the unpredictable and malevolent business environment. As a matter of fact, business ecosystems have become the go-to business model for the digital economy. As per Accenture, “Ecosystems are the new bedrock of digital. It allows harnessing disruption to drive new value for your organization.”
Need for Business Ecosystems
Creating a business ecosystem is not just an ethical imperative but a business priority. CEO of Imaginatik, Ralph Welborn, an innovation software and services company said, “Business ecosystems are no aberration; nor are they a surprise. They represent an inevitable, adaptive response to changes in the type of value that folks care about and the interplay of technology innovation, behavioral expectations, regulatory changes and novel business models.”
Simply put, business ecosystems have become more than an imperative, they have become the priority for the businesses to grow and seize fresh opportunities. They drive value along three tracks: creating new sources of revenue, rationalizing cost structure, and enhancing the speed of technology adoption.
Impact of Business Ecosystems on Customer Data
Business ecosystems play the role of a catalyst in improving data flow and providing organizations more value in the form of customer data. For example, a grocery store that has a well-orchestrated ecosystem will have easy access to a wealth of information gathered from trading partners, suppliers, competitors, and other stakeholders to gain new insights into customer preferences and decision-making factors. By understanding what a customer wants, companies can influence consumer-driven touchpoints that allow them to get rid of customer decision fatigue which, in turn, directly impacts their sales and productivity.
Many public platform companies such as Alibaba, Alphabet, Amazon, Apple, Facebook, LinkedIn, Netflix, Salesforce, Tencent, and Twitter have built robust business ecosystems to pull in more customers by monitoring, managing, and maintaining customer data swiftly. Their efforts represent $2.6 trillion in market capitalization worldwide.
Apart from this, companies that hail from non-tech sectors including Bosch, Disney, GE, Merck and Schneider etc. also indulge in building business ecosystems for successfully navigating today’s relationship-based, data-driven enterprise ecosystem.
To conclude, self-sustaining enterprises working together in a business ecosystem can magnify their addressable market and deliver greater value simultaneously in terms of overall value proposition and digital customer experience by streamlining data flow and customer decision-making journey.
Business Ecosystem Creation Requires a Strategy
To enable an ecosystem, access to top-notch technology and understanding of customer relationships & expectations of consumers/partners is essential.
However, without a strategy or a plan, the aim of driving a business ecosystem may go haywire. So, enterprises ought to scheme out a strategy to savor the benefits of the digital revolution.
3 Essential Rules for Innovators
Though creating digital strategy rests on the enterprise’s ultimate goal and requirements to be met, there are a few rules that innovators aiming to develop a coexisting business ecosystem must abide by.
Rule No 1: Include ecosystems into the market and competitive data research
The market, as well as competitive data research in lieu of strategy and innovation, needs to transcend the boundary of traditional competitors should you wish to potentially disrupt your business model and conventional value chain. This allows enterprises to identify and evaluate the ever increasing, maturing business ecosystems and industry platforms.
Hence, enterprises aiming for maximized outcomes in terms of revenues, productivity, customer/employee retention etc. need to keep a close watch on the ecosystem players within their industry and organizations from other industries as well.
Rule No. 2: Enable cross-industry mindset by taking an ecosystem view of the customer experience
Business ecosystem seeks collaboration. Enterprises aiming to grow and propel their digital transformation initiative ought to take end-to-end customer journey into consideration in specific scenarios and separate value propositions that can be conjoined together via ecosystem.
In air travel, this rule demands the organization to pay attention to the overall passenger experience that spans across airlines, airports, car rental agencies and hotels. In the world of automotives, this involves thinking about the future of self-driving cars and respective implications on insurance, road-side service, and other traditional services which can be re-imagined and re-designed.
For example, RAC, UK’s most sought-after motoring services company, made a recent acquisition of vehicle diagnostics specialists Nebula Systems that indicates its cross-industry mindset that extends its business model from a labor-intensive, reactive model, to a more proactive, digitally enabled “predictive breakdown service.”
Rule No 3: Build capability to draw in new partners for co-innovation
Organizations looking for tangible outcomes need to find, select, and co-innovate with appropriate digital partners for ecosystem business models.
Organizations need to change their approach, from having a static set of business partners for R&D to attract new partners dynamically. Initially, this may require manual effort to detect potential partners and establish open lines of communication. However, over time software vendors offering this particular type of innovation will start growing on a large scale.
Building enterprise ecosystems by conforming to these innovation rules will help you ride the wave like a champion!