To ‘Platform’ Or To Perish? That Is The Critical CEO Question!

Apr 20, 2018 1 Min Read
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By JESPER LOWGREN

 

I have led transformation projects for over 20 years – across most industries – from the start of the Internet and the world wide web, to today’s digital disruption. And each era in between.

All of them hold one thing in common: new technology – which drives new behaviour; which leads to change.

Each new technology attracts its early evangelists. Doom and gloom are upon us unless we adopt the new technology immediately.

In the early 2000s, aggressive software vendors proclaimed e-commerce was essential to survival. But only today is it becoming true.

Apps are another good example. A couple of years ago, they were deemed important as they heralded a new era of process mobilisation.

Today, the business app economy is decreasing because apps limit the customer experience. And not everyone wants their device cluttered with apps.

While e-commerce took more than 15 years to mature, apps only took four to five years.

How critical is digital disruption? 

In August 2016, I gave a keynote at the World Forum Disrupt in Sydney. The keynote that stood out to me was presented by the Australian retailer theiconic.com.au. They have designed and built a digital business from the ground up: connecting analytics with customer journeys to create a compelling, multi-channel customer experience.

This creates a sustainable competitive advantage. I have launched successful online retailers and know the power of an agile operating model and platform, and I know the disadvantage of running many different systems.

To me, this sums up the challenge of the digital disruption and how critical it is. Or perhaps more apt: how different it is.

But how is it different? What makes a new economy business like theiconic.com.au and Airbnb flourish?

Because they think differently. Anyone can copy what they do. But not how they think. And this holds the key to their success.

The starting point is not the business you have right now, but the business you want to create if there were no barriers.

You need to ask the question: how does my business need to look like to thrive in change and disruption?

One thing it will certainly not be is, it won’t look like the current business. It is not about digitalising more of what is being done. It is not about running faster.

It is about re-imagining and re-designing the business to be agile enough to operate in insane change and disruption.

What does this organisation look like? 

It takes advantage of the full potential of digital:

  • Speed: How fast a process can run. This has been the preoccupation since computers became commonplace.
  • Scale: How fast a process can change and collaborate with other processes. The need for scale is a new phenomenon and is connected to the emerging ecosystem economy.

The problem in most businesses is the lack of ability to scale. This is a consequence of a continued focus on speed and automation.

Over time, it left businesses with many disintegrated systems with tightly integrated business processes. Non-agile and hard to change.

Why is scalability suddenly so important? 

Because it provides growth at near zero cost. Scalability is about leveraging an ecosystem or network to create multipliers.

In the analogue world, the ratio is 1:1 but in the digital world, it can reach 1000:1.

Yet to achieve and sustain such a ratio requires an agile enterprise platform, purpose-built for the digital world and economy. This is different to enterprise systems that are designed to meet internal capability requirements.

Developing an enterprise platform 

Here are some guiding principles for developing and sustaining your enterprise platform:

  • Single source of truth: Core information is continuously updated and normalised.
  • Customer value: Customer value propositions are clear and continuously updated.
  • Continuous simplification and transformation: Core processes are continuously reviewed, challenged and decomposed.
  • Narrow coupling of processes and system components: Multiple vendors preferred. Single technology or vendor dependence to be avoided.
  • Interoperability: Processes and system components can easily inter-operate with other internal and external processes and systems via application programming interfaces.

The time for change is at hand 

This is different from the old challenges of picking a new system to solve a problem. Because this time there is no new system to pick.

Indeed, the system is not part of the solution, it is part of the problem.

 
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Jesper is a thought leader who works to transform businesses in the digital world and economy. To engage with him, email us at editor@leaderonomics.com.

Reposted with permission.

 

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