Armed with digital platforms, the world’s most forward-looking organizations are redefining how goods, services and information are exchanged and communities of interest are cultivated to create new digital revenue streams. Platforms have evolved over the last few years. They come in many forms, but all feature a collection of one or more products, components, services and an array of advanced technologies that, when integrated with legacy infrastructure, essentially become the organization’s new operating system, providing a modern, value-rich experience for customers, partners and employees.
From service-oriented platforms that underpin the likes of Airbnb and GrubHub to social media and knowledge platforms that keep us all connected and informed, a move to digital platforms can significantly enhance business agility, speed and flexibility as they digitize value streams. Ultimately, they provide a means to effectuate new strategic directions, quickly scale operations and speed products to market to meet ever-advancing customer needs.
The benefits and requirements of a platform are many. The best among them:
- Establish an ecosystem bringing producers and consumers together through digital channels that create strong, compounding network effects.
- Integrate with heritage systems and digitize business processes and capabilities, unlocking greater value and delivering users a modern experience.
- Require the support of a solid software engineering foundation and deep product-management skills to deploy enabling technologies and new operational paradigms.
As management teams explore how this approach can unleash new value propositions and operating models to attain ambitious goals, they must first understand what lies ahead. Creating a platform requires significant stakeholder and technology foresight. It involves integrating a vast array of technologies, such as microservices-based, service-oriented architectures; cloud technologies; Internet of Things (IoT) connectivity; data analytics; artificial intelligence (AI); and integration of application programming interfaces (APIs) with legacy systems. Platform building also leans heavily on data science, design thinking, and deep industry and process knowledge to unite physical and virtual activities across value streams.
Before venturing forth, assess the organization’s technological aptitude, readiness and maturity, and address any outdated practices. Ensure an ability to sustain the platform and related products long-term through capabilities training in Agile/DevOps-based lifecycle approaches, user experience design, product-centricity, design/coding principles, automation and the use of containers.
Building platforms, however, isn’t as daunting as it sounds. Based on our experience, here are seven key considerations to enhance and accelerate the journey to becoming a platform-based digital business:
1. Focus on strategic intent and secure executive sponsorship and investment
An organization’s market-focused goals and strategy should dictate the need for a platform approach, whether the aim is to expand into new regions or markets, launch new business models to market products and services, or offer radically new digital ways of doing business.
Exploring and pursuing a platform approach requires concerted commitment that must extend beyond the IT function. Form a CxO-level steering committee with representatives from across the business. Include leaders of functions that fall within the program’s reach, as impacts will be felt across ecosystems as value streams are digitized to connect key stakeholders, such as employees, vendors, partners and customers.
With an executive sponsor at the helm and as the discovery process progresses, this team will draft the roadmap and secure required budgets to invest in the needed tools, technologies and approaches. The roadmap should include an action plan that supports needed workforce enablement, process redesign and cultural alignment.