You cannot escape the discussions around platform business models. Recently I saw that 50% of all organizations are either investing or considering a new platform business model. In a report provided by the IBM Institute for Business Value, released last year called “The Incumbents Strike Back” they really encapsulated the survey work they undertook in four topics that tell a story of today, or it certainly should do.
What’s required, now more than ever, according to IBM, is the fortitude for perpetual reinvention and these four topics tell the story of why these are important:
Firstly we are all “dancing with disruption” and it is the reinventors that are finding the way to balance the existing with the designs of the future. This was described as a “balance between stability and dynamism” and exploring the forces at play.
Secondly, reinventors are placing their “trust in the journey” as they are investing in design thinking, testing the assumptions and re-orientating their organizations to engage with their customers to create deep bonds based on trust, the path to personalization.
Thirdly, the whole value is changing based on “orchestrating the future” where organizations scale differently their partner networks, reconsider their value propositions and allocate resources more on business platform designs.
Fourthly, there is a liberating for “innovation in motion” where constant experimentation, getting close to customers and delving deeper into ever-evolving ecosystems of dynamic teams and partnerships are transforming their landscape.
Two really important points for me in this short report was the pull of the platform business model shown in the visuals provided
I am always “caught” by the multiplying factor for a business to grow. It sounds so tantalizing. It is the trigger, or validation, to invest. The Network Orchestrator is the primary position to hold but to get to this “king of the platform hill” is a very long and tough journey. To get to this, it is in IBM words “ambition, the fortitude, and the wherewithal” and that is totally built on conviction and believe this is the primary spot to aim for. The suggestion is this network orchestrator position can create “a dazzling network effect”. Well, yes but perhaps the lights might have gone out well before this in its cost to get there..
We have seen this certainly in the B2C space but I am not so sure it is “dazzling” but requiring some very heavy lifting in B2B and the application of the IIoT platforms being offered today. I think the (eventual) multiplier might be there but to get to understand the actual business model that will generate this is really hard work, well beyond a “crystal ball” but some “stellar” offerings provided by the orchestrator to offer. The shaking out cannot be long for those within the race shown below.
The platform business model framework
The second visual that stood out for me was the platform business model framework they provide. It tells the story of the key aspects of a platform business model brilliantly. If we step back from this and look, again, at the IoT platforms that are all vying for a leading position who are loading technology and attempting user-centricity. Just look below this at the “leading IoT platforms 2019” and recognize the chase to being a network orchestrator is a tough, long and very expensive journey many of our leading technology or manufacturing companies are determined to be “left standing” in the future.
I really like this depiction of the platform business model framework shown above. It is suggested in this report by IBM the platform operators will do the three parts “exceedingly well”. That is no easy task as the existing IIoT platform providers are finding out. They are all in a mode of discovery at present and although this visual above is the framework what needs to go into the parts is the “magic sauce” being developed.
The current leading IIoT platforms are shown here
What a very crowded field where the investments are still going in this other “perpetual” investment that technology is constantly providing to keep up to date and attractive so the chase for “user-centricity” can happen. This takes the “ideals” outlined in this IBM report and states the current battlefield.
As IBM state: “once on a platform, the “rules” for success change considerably and not just for those who own the platform, but for all those who participate in it” .
This “dance” really does put the “forces into play” and any reinventors or organizations need one more aspect besides the four mentioned above. That is the stomach and fortitude to stay the course” as it is a very expensive journey for anyone to travel.
A simplified Blueprint for Action
The last part of the report by IBM offers a short “blueprint for action”. I think the need for a dynamic vision, achieving an open culture and achieving agile operations is a wickedly tough journey even if you keep closer to your existing business models, let alone chase after a platform business model transformation.
I certainly feel this “snapshot” of the blueprint really lacks real depth but it gives the top line needs to think through. well some of them at least.
Why I like this report is that it is an inspiration but to just take the first point in this blueprint “know where any industry is currently heading” alone is as tough a call for leaders today but they have to call the changes. Do they “embrace business model platforms and all this will totally mean or do they stay closer to what they have?
The future will be different, it is when it will arrive but I agree it is perpetual in the dance for change we all know is needed.
Is it now or do the leaders put off the hard stuff and leave that to the next generation of leaders? Whichever way it will be for sure “that dancing with disruption” It is deciding how much lies in your hands as today’s leader, and then how much disruption will come and at what force. Tough calls all round in my view.