Becoming a platform player: co-innovating, co-creating and collaborating to drive growth
By: Angus Ward, CEO, Beyond Now
In his book ‘Platform Revolution,’ which celebrates its 10th anniversary this year, Professor Geoff Parker describes the revolution of platform business models that has swept through as the “inverted firm”. Where powerful network effects and use of partner ecosystems has shifted the focus of value creation from purely within to outside the organization – driving economies of scale and new sources of differentiation.
In the context of the telecommunications industry and new technologies, including 5G, Edge, IoT and AI, adoption of platform business model is a key topic for board level discussions, and many CEOs are actively looking for ways to develop synergy by adding platforms to their core business.
The benefits of such a model are clear, but it’s a combination of making the right platform technology decisions as well as bringing about key organizational changes for the new business model to thrive. Undoubtedly, a marketplace or platform (a digital business platform) is the key facilitator in moving away from the old linear structure, to a multi-sided business model unlocking the value that external (and even internal) ecosystems create.
It acts as the orchestration and monetization layer, automating and unifying business processes across the entire ecosystem, enabling a simple and intuitive customer journey to be delivered as if they were purchasing from a single organization. But what’s the most effective way of using platform technology to support co-innovation, co-creation and collaboration, to ultimately drive growth?
Start by reinventing the business model
As post pandemic inflation soars, companies – no matter how big or in which industry – are facing huge challenges to control costs whilst continuing to grow revenue, launch highly innovative and compelling new digital offerings and improve overall customer satisfaction. They are meeting this challenge head on by driving their digital transformations harder. What they want to buy are simple solutions that are easy to try, easy to buy and easy to consume (so called “out of the box”) that provide an immediate and measurable financial payback. Invariably, the benefits from these solutions are unlocked by leveraging state of the art technologies like apps, 5G, edge compute, cloud, IoT, AI, ML, DLT, robotics, drones etc.
It sounds easy but this presents a real challenge for companies selling those state-of-the-art technologies, including CSPs. Traditionally, they may have wanted to sell highly standardized products using a standard that passes all the risk and costly integration to their customers. With limited access to the technical skills and without economies of scale, this has proved to difficult which is why so few digital transformation initiatives are successful. To retain their B2B customers they need to go one step further and offer fully formed solutions that will solve customer problems and drive digital transformation. The worry is that the capability to do this, particularly as a service deployed globally on the cloud, are typically much broader than any one organization can provide.
The solution is for technology companies, including CSPs, to evolve their business model to sell multi-partner solutions, co-created together within a community or ecosystem. This is the logical next step for many solution providers to win new customers and retain existing ones by better meeting their needs than competitors whilst also being able to federate costs, risk and expertise within their ecosystem of partners.
Building a partner ecosystem is now mainstream, jump on board!
In telecoms, consequently, we’re seeing the birth of technology communications providers (“TCP”) who have transitioned from selling a horizontal component (pure connectivity) to selling solutions. For the industry and ecosystems, 5G enabled solutions will be crucial if telecoms is to generate payback on its almost $1 trillion investment in 5G networks. This is essentially the telecoms sector acknowledging that they must retain customers but must also be more relevant and give them what they want if they are to ward off competition from alternative service providers and hyperscalers. Demand for solutions meant 2021 was undoubtedly the year in which ‘the science’ of building a partner ecosystem became mainstream.
Ecosystems are underpinned by digital business platforms and marketplaces, designed to support the monetization and orchestration (“frictionless trading”) of partner offerings at scale powering the end-to-end dynamics of a partner ecosystem including channel partners, solution partners, marketplace and B2B2X. Success for TCPs is measured in terms of achieving Minimal Viable Community (MVC) of customers and like-minded ecosystem partners around their platform. This community drives the ideation, co-creation and experimentation of new innovative solutions that B2B customers want to buy to drive their digital transformation forward. Historically, CSPs sales activity has all been about acquiring and then retaining, when renewals fall due. Community is all about a new activity “customer engagement”. The outcome of engagement is key to driving network effects – creating the choice of compelling new solutions and economies of scale for providers within the ecosystem, in effect, a winner takes all scenario or a so called “Amazon fly-wheel effect”.
And the benefits are real where powerful network effects are driven which can’t happen within the old linear business model but can in a multi-sided platform/marketplace and ecosystem-based model. Network effects based on a highly engaged customer community hold the key to both driving down Customer Acquisition Costs (CAC) by bringing non-paid customers with a more organic or viral growth engine, but also driving-up Long-Term Value (LTV) as CSPs expand their portfolio of highly relevant solutions and global reach of their solution cross/resell – bringing customers both more choice and lower prices.
For TCPs, then it is all about the technology solutions portfolio that they co-innovate, co-create and collaborate. We see most follow a three-pronged strategy:
- Native solutions – TCPs want to create their own repeatable solutions and capabilities where a specific industry (e.g., agriculture, healthcare, manufacturing, utilities etc.) has the scale in their own local market and they can collaborate with customers and partners to build it. This might be from an idea from their customer community and co-developed with that customer. They want to be an ISV cross-selling that solution they own globally through non-competing TCPs and third parties to get economies of scale, benefit from first mover advantage and gain access to best practices to broaden out the solution and to bridge into adjacencies. Initiatives like eXchange are vital for this. Repeatability, self-serve, zero-touch for device set up and access to the marketplaces to cross-sell are pivotal in this case.
- Co-create solutions – This might be where there is definitely local demand, but the industry is not big enough in their local market and they want to share development costs or maybe create one individual capability within the solution. In addition to repeatability and marketplaces, is access to collaboration partners willing to adopt the same marketplace for sell and cross-sell. Again, Beyond Now’s collaboration with CSPs to create the totally unique eXchange initiative is vital to putting together the right organizations to co-create and globalize.
- Partner solutions – This is important as TCPs want to quickly get critical mass in their portfolio to start the journey to becoming a trusted destination. It’s also important for specialist solutions TCPs don’t want to build expertise in or won’t get scale e.g., cyber security. Where it’s reselling branded products, it’s about adding more value (e.g., an SME business on average buys 7 SaaS solutions such as finance, HR etc. and so TCPs build a performance dashboard across the top to unify data and metrics as incremental value to buying the 7 SaaS products individually).
Ecosystems are not the classic “listing” marketplaces but genuine partners who provide empowered teams facing off to the TCPs, their partners and customers to ideate and co-create new solutions in an iterative and agile way to build minimum viable product (MVP). Partners bring a horizontal component or plug multiple components together (often with their own ecosystem) to create a more valuable capability (e.g., asset tracking) and finally a solution, which is the most valuable and consists of multiple capabilities. Capabilities provide this repeatability as they get plugged into a vast array of different solutions. By becoming a platform player and reinventing the business model, you can start to establish value in the B2B sector, realizing your ambitions to grow beyond connectivity and generate new revenues outside of your traditional consumer-centric business.
To find out more about Beyond Now, the eXchange iniative and how its technology is helping CSPs such as TELUS, Telia, Tata Communications, BNET and A1 to transform, please visit: https://www.beyondnow.com, contact us at [email protected], or visit us at DTW 2022 in The Quod Booth Number 204.
About Angus Ward
Angus is the CEO of Beyond Now, a fast-growing ecosystem orchestration and digital platform provider, now operating as an independent technology company following a management buyout from BearingPoint. He brings 30 years of consulting and solutions experience to his role, supporting organizations across multiple industries in shaping strategies and adopting platform-based business and operating models with differentiating partner ecosystems. Key clients have included BP, BT, Boeing, Ministry of Defense, NTT and Tata Communications as well as key ecosystem partners like Google and Amazon Web Services.
Angus’s extensive experience and knowledge over a range of fields has established him as a thought leader, quoted often by newspapers and prominent industry publications, on the topics of business model reinvention, digital platform business models and the role of the ecosystem in the evolving digital economy. Working closely and collaborating with industry bodies such as TM Forum, analysts, research firms and academic organizations such as MIT and Wharton, he regularly presents on the key trends and issues affecting telecoms and technology. Angus Ward is also a Chartered Accountant and has published research within the BearingPoint Institute.