How can organizations survive in this winner-takes-it-all world?

Platform-based business models and strategies are essential to nurturing new growth opportunities. This awareness is the primary driving force behind the macro-economic shift, which sees companies either building their own platforms or latching onto existing ones in order to promote growth.
161003_How-can-organizations-survive-in-this-Winner-takes-it-all-World.jpg

This article is part of a series on the trends identified in Accenture's Technology Vision 2016 around a People First approach

Geert Batterink sheds light on how companies unleash and utilize technology to ensure they are not left in the dust.

The words ‘platform’ and ‘ecosystem’ are often incorrectly used interchangeably, so, for the sake of clarity, let’s start with definitions. Essentially, a platform is open to anyone you wish to grant access to as a marketplace for a product or service. An ecosystem develops depending on the openness of the platform, i.e. if other services, products or brands tap into a platform.

A Successful Platform Inspires New Initiatives

An excellent example of a successful platform is Airbnb, the online marketplace that enables people to list, find and then rent vacation homes. Unsurprisingly, Airbnb’s success has led to numerous companies offering their services to complement the site’s existing ones. For example, there are businesses offering to take care of check-in and outs; cleaning companies proposing to clean the rented apartment, etc. This reflects a platform attracting new initiatives and, as a result, flourishing into an ecosystem.

Key Characteristics of a Successful Platform

This begs the question: what defines a successful platform?

  • Firstly, it needs to be transparent and easily accessible. Think of Uber, a textbook example of an extremely easy service: you simply download the app and off you go.
  • Secondly, scalability is essential, as is user-friendliness. Users don’t want to be confronted with too many steps before accessing a platform; the experience must be seamless and simple.
  • Thirdly, the platform needs to be asset-light i.e. there shouldn’t be too much investment in assets. Take Facebook, for example: there is a massive amount of content, but the site itself does not have a contracted content writer. The most successful platforms also leverage the use of social media, gamification and crowdsourcing.
  • Lastly, agility is important, too. The flexibility to develop and test new functionalities quickly enables companies to continuously improve their product and services. LinkedIn is an interesting example of a company that employs testing methods that involve experimenting with new functionalities on a select target group. If successful, they implement the changes, allowing them to continuously innovate and refine their product.

Connecting APIs

The successful companies of the digital generation are those with a widely used and connected ecosystem. Look at GoogleMaps, an application programming interface (API) that can be used as a mobile application. Similarly, APIs in the aviation industry are being made accessible to third parties and thereby improving service and customer experience. By exposing functionality via APIs, companies ‘open up’ and allow third parties to develop their own applications using the company's’ APIs. Airlines, for instance, can expose APIs to allow third parties to purchase airline tickets. The platform allows third parties to utilize existing functionalities, creating a symbiotic relationship. Thus, an ecosystem is born.

Prime Example: Twilio

I love Twilio as an example of a thriving platform-based business. The San Francisco-based company offers a highly scalable, accessible cloud communication platform for voice and messaging applications on an API, enabling people to communicate with anyone in the world. The days of physical call centers are long gone. Twilio’s virtual telephone lines are created via its web service APIs that are connected to various other companies. It’s a fast-growing, asset-light company that provides other organizations and software developers a huge number of advanced functionalities in a truly transparent way.

Dutch Pioneer Adyen

Not all innovations like Twilio have found their way to the Netherlands; in many ways, we’re still somewhat in the adoption phase. However, this doesn’t mean that we lack inspiring examples of Dutch platform-based businesses. Adyen, an online payment service provider, comes to mind immediately. They’re situated in Amsterdam and growing rapidly. Their proposition is simple: they are a global provider of online, mobile and point-of-sale payment solutions. In today’s world of global online commerce, there is a need for a huge number of available payments methods. Adyen is like the ever-suitable travel adapter, always offering the correct, appropriate payment method that tends to be specific for different geographies. Next to that, their platform is transparent. Clients sign a pay-per-use-contract, integrate the service and can use it immediately. Furthermore, contracting models are typically based on a ‘pay-as-you-go’ basis, e.g. subtracting a small transaction fee.

"In many ways, we’re still somewhat in the adoption phase." 

Two Vital Questions for Organizations

Developments in today’s digital world have created a world in which a ‘winner takes it all’ approach seems applicable to several markets. Platform based companies have the potential to grow exponentially, posing a serious and fundamental challenge for organizations that struggle to keep up with this pace.

Therefore, organizations need to look at the impact of the rise of the platform economy very closely and ask themselves two pertinent questions: ‘Are we going to build our own platform, or should we collaborate with suitable, existing platforms to secure growth?’

New Experiences Becoming New Expectations

Moreover, the digital developments also spawn an interesting shift on the side of the consumer. The improvements in customer experiences ultimately lead to new norms and, more importantly, higher expectations. After a customer has experienced the seemingly effortless experience of arranging all banking matters online without our having to physically set foot in an actual bank, he expects the same uncomplicated process when taking out a new insurance policy, for example.

These simultaneous shifts often require companies to rethink their strategy. What is the current strategy? What is happening in our market? Who is doing well, and who isn’t? Do we need to revise our strategy? What does this mean in terms of opportunities, possibilities and setbacks?

To Summarize: What to Do?

Building a new platform has proved to be challenging for many companies, especially in the aforementioned winner-takes-it-all world. Often, it’s more viable and sensible to connect with existing platforms or ecosystems. We believe we hold a unique position in the market and are capable of guiding companies through the digital transformation for an end-to-end perspective to drive business results. By mobilizing our skills and expertise in the fields of Strategy, Consultancy, Digital, IT and Operations. We can help companies to define and execute their transformation to become leaders, and unleash business results from a strong digital strategy. Standing by idly, watching things evolve, is simply not an option.  

Have you started building your own platform yet? Or are you thinking of collaborating with existing platforms to start growing your business? We'd love to hear about your experiences. Get involved and leave a comment. If you would like to know how we can help you, please get in touch. Would you like to discover your career opportunities? Contact our recruiter.

Also have a look at the other articles published in the series on Accenture's Technology Vision 2016

Author: Inge Abraham