Value Designing

Defining Ecosystems in Industry

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Defining Ecosystems in Industry

In a recent exchange, actually, on twitter, we were discussing definitions of platforms for IoT or IIoT, defining ecosystems in industry. This was to shape a story to be told.

We got into the “how” to position them and in these exchanges, we eventually arrived at the question of Ecosystems, of “What defines ecosystems within an industry?”.

There is growing value in engaging in business ecosystems and let me offer the “why” and move you through the “what” towards the “how.” I felt it needed my “take” on defining Ecosystem design for Industry.

The present growing use of the word “ecosystem” has been born or borrowed (for industrial use) from ecology but it is not appreciating the understanding as well as it should do.

We in an industry do need to understand this, embrace it and interpret it in this ecological way, or design the Eco-friendly intent in a clear, game-changing way, that allows us to move forward at higher increased rates of change.

So the issue is what does make up an Ecosystem and make it stand apart and be valued for what it brings.

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A Statement of Ecosystem Intent Inside Our Business Enterprise- the CEO letter currently missing

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Ecosystems have become a really hot topic. As we gain the understanding of what a dual strategy approach to what our business could look like, you need to recognize what you still need control of, those you call your core assets. Yet at the same time, to explore and expand out more today we need to build better external collaborative approaches.

To achieve this reaching out and collaborating will require participating in platforms and building up your Ecosystem Management understanding.

The word “Ecosystem” is getting as much “air time” as the general use of the word “innovation” in business recently. It generates buzz, it projects the impression you are looking to the future, managing your business in that progressive, outward way, that shareholders and your employees love to here.

Well as we well only well know with innovation, if it does not align to strategy, integrate within the business activities, it stays a little out on one side. Also, innovation stays so often a necessity to “call upon” but not as your core focus of activity. That focus still is, sadly today focused on managing the assets for short-term performance, where the consistent focus is always on efficiency and effectiveness to “work or sweat those assets”. Maybe we might be seeing a change in ecosystem management design. More of the “assets” outsourced or in collaborative partnerships.

Well, Ecosystems are entering the lexicon of top management. It does sound good to talk about “building our ecosystem” in every possible way. You need to ask though, has management actually sat down and defined the type of ecosystem it wants to design, to participate in, or become part of. Or do this simply happen, a sort of drifting into, a grand experiment, as if that made real progressive sense? Let’s take a different approach

What if the CEO and the board decided to open up the discussion around the future pathway, one of managing within a federation of ecosystems.

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Biting off more than we can chew can be a good thing……depending.

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I had mentioned in a related post on my other posting site that I wanted to understand a recent Siemens event.

This was partly presenting 3rd financial quarter results but more on their future course with a Vision 2020+ and its respected parts being the design that is going to take the business out further by exploiting the parts within this vision.

There was a lot to take in on limited information and understanding. View the post “A feast of opportunities for Siemens?” for my first reactions on this.

The whole expansive story around Siemens new structure announced at this event offered some of the opening details, yet it is still to be “fleshed out” later in the year, by their management.

I specifically zoomed in on the new Digital Industries (DI) structure and where it is seemingly heading. Presently this new operating group will have 78,000 employees and a business revenue of around Euro 14 billion, that contributed a profit margin of around 16% in their fiscal 2017.

The expansion of the digitalization business has a very exciting acquisition announced the day before, with the Mendix acquisition, a leader, and pioneer in the area of low-code application development platforms, where you can potentially program and deploy apps up to ten times faster. This has been one of several “pain points” for Mindsphere, the Siemens digital platform, on providing a menu of apps to support client problems, so we should see some significant improvement on this point.

This purchase of Mendix can make a significant difference and propel the platform into a new value proposition, a 2nd generation digital platform where “smart” becomes central. I will be coming back to this once I have undertaken a little more research and assumption undertaking, in the next few days, as it has some compelling value positioning for Siemens, I believe.

It was the other part of the digitalization expansion that stopped me a little. This is what I want to discuss here. Let me work it through.

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Opening up our thinking towards ecosystems has a powerful effect

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ecosystems-abstract

Our whole understanding of innovation is changing, it is opening up to ecosystems and the necessary thinking and designing; there are numerous shifts occurring.

We are evaluating and changing our existing focus from closed (internal orientation) into ones that are having a far more open stance. We are searching for more collaborative innovation (external orientation) combining external partners into more ‘collective thinking’.

This shift is offering us extra acceleration that is needed to improve our innovation performances from concept to market delivery.

Collaborative innovation is also leading us to higher chances of achieving greater impact and success, as nearly all novel ideas lay outside the organization’s domain of understanding.

As we increasingly include the customer and their needs within our understanding, these multiple collaborations and dialogues are building this better internal understanding.

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Platform Providers need to think more about Ecosystems Principles and Design

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In my opening post (here) I was thinking where platform providers seem to be, in their current value proposition. I cannot see their approaches as sustaining. Now, this is a personal opinion and observation but let me lay out an alternative view.

I believe we are at an inflection point where the design of IIoT platforms needs to be integrated into a new way of Ecosystem Design.

There is a real need for a more shared value, breaking through the old traditional boundaries of single companies working with ‘selected’ providers of service and highly selective platform providers.

Ecosystem design is about being open in all potentially valuable proposals and co-creation possibilities. It is using multiple platforms as being part of a very different future design. You go where the best collaborations can take place not get .locked into one.

We need to stop and start to think about Ecosystems and their design for platform providers. Platforms have been amazing in their design, recognition, and value in a very short time.

Platforms are changing the way we undertake business. We have passed through the early phase of their design. It is now time to bring platforms into their place within a greater Ecosystem design.

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The case for changing the IIoT platform providers value proposition

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I have been reflecting recently on where we are in all the efforts, focus, and resources, that have been going into the building of our IIoT platforms. This has mainly been around the questioning of where they should fit within the needs of an ecosystem, the end outcome of our new industrial design, in my opinion, that enables digital transformation.

Let me offer up an initial case of why there is a need for a change in where we are on IIoT platforms and their current emphasis and focus on how we need to change the value equation out in the future in our solution designs and positioning of platforms, as a need to achieve. This is based on considering a greater ecosystem perspective, one that provides a sizable move towards a digital transformation we need to make.

Here I attempt to lay out the current position and suggest there is a case for change. The IIoT platform provider needs to change their value proposition urgently, in my opinion, or move along a faster evolutionary curve certainly, to get clients seeing their own value-add endgame, not just the IIoT providers race for dominating the platform space.

So let’s look at where IIoT platforms currently are, and in my related post where we might consider some changes in how we are evolving the platform story.

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Have you got your digital twin strategy sorted out yet?

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Gosh, where do you start on thinking through “digital twins”. The manufacturing industry is exploding with their digital twins to mimic their physical operations,

We have companies like Dassault who have been focusing on digital for many years taking a  specific focus on the human being and commercially releasing their “Living Heart”.

This “living heart” digital twin is the first realistic model of a human organ that actually accounts for electricity, mechanics and blood flow in the heart into a personalized full-dimensional model of the heart. Then users can practice and manipulate it, to place pacemakers, reverse chambers, cut out cross sections and run all sorts of hypothetical scenarios before the physical heart needs to be touched.

Then we have the digital twin that will learn all about you and what you do, think and work upon to provide you a closer replica of your daily life to help you. No, the digital twin is alongside us in multiple ways, it is not just a shadow in a mirror, mimicking all we do, in life and real time but it is working on finding better solutions to improve the actions being undertaken. It helps to predict, suggest and improve on our current activities.

Now stop and absorb that, please. The digital twin takes intelligence to a new level to mimic and then also predicts performance, based on the real-world performance you are feeding back into it.

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Platform understanding is growing

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I have put some focus back on the platforms recently, as this is becoming a real imperative to understand the whole meaning and implications of platforms, with the necessary management they require, so as to enable us to rethink different business models for the future.

There are without doubt real business implications in taking on a platform strategy as they really will be having such a transforming effect on all we do within companies and way beyond with others, including customers and even past competitors. They uproot the present and much of the established practicies.

They are changing the face of markets, industries, and competition but we within the established business world, mostly formed in the 20th centure seem slow to recognize their incredible impact, if we applied this platform thinking towards our own business, what would it mean?

There is a recognition that all innovation does not occur inside, it occurs from ‘open’ collaboration. It occurs from engagement and appreciating many others have better insights and possible answers, it is the power of combining them that has such economic consequence and great value creation potential. Our businesses are all becoming based on platforms.

The difficulty for many of us is first understanding what a platform is all about. The getting a clearer picture of the different types of platforms. Each has different tasks in building their specific “network effect” and how they are set up to interact and the type of problems they are attempting to solve. Some are really open, some are seeking growth, some are seeking collaborators to come together and work on ‘cracking’ more complex problems that one individual company would not be able to do.

In some of my recent updating of the platform breaking scene, I came across a terrific site that has created an open initiative to help entrepreneurs and organizations of all sizes to relate and build successful platform businesses, called Platform Hunt.

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Ecosystem approaches are simply radically different, be ready.

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There are significant differences between the ecosystems we might consider. Let’s reflect a little here, some recap and explore some further thoughts.

They all have complexity, they all need highly collaborative platforms to exchange and build through, they all need constant focus on aligning individual ecosystem players needs with the vision and prospective rewards this can bring to all participating parties.

The more engagement with the final ‘consumer’ throughout the process of insight,  discovery to solution building, to eventual proposition outcomes needs the highest ‘active’ attention and communicating for all involved.

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Adjusting to the Changing Landscape of Ecosystems

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the changing landscape for ecosystem and platform thinking

We all are being told repeatedly that opportunities will increasingly emerge outside of the traditional established lines of business, as new digital technology solutions take increasing hold in our adjusting to the changing landscape of our thinking in ecosystem designs.

The issue is how we go about adapting to these and taking advantage of the changes all businesses are undergoing. These will be through different approaches to designing and extracting the potential value gained and will form around ecosystems and their management, through technology solutions provided by platform providers.

I am not sure how you feel, but It seems disruption is in everything, in what we need to undertake, in what is coming towards us in change. It has a common purpose, often far less sinister than promoted.

Disruption is requiring us to re-equip and open up, as we learn to deal in this changing world where connections can emerge from anywhere at any time, offering a new ‘line of sight’ onto an existing business concept.

We need to respond quickly and in those different, collaborative ways. Digital challenges are everywhere, to explore and exploit.

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