Seizing breaking opportunities, dealing with disruptions, and delivering on more demanding customer needs are raising the complexity of managing today in our business environments.

The growing recognition is the need to build flexible ecosystems; of partners where access to a diverse on-demand set of talent, knowledge, expertise, resources and capabilities needs a broad approach in today’s world to meet these complex challenges they seem to multiply daily.

In thinking and design, ecosystems offer a different growth path and stability than the previous “go it alone”. Engagements with partners can offer shared data, new, fresh insights, the ability to share costs, shared operation experiences, and expertise to help build new approaches to more ‘connected’ collaborative innovation.

The ability to tackle complexity needs a different approach to sharing risk, taking appropriate steps to evolve, and engaging more broadly with customers, consumers, citizens, and concepts, chasing a different value and meaning for all involved.

Industry ecosystems are still in their early stages of discovering the optimum solution; in configurations, knowing the network needs for capability, capacity, support, expertise, and knowledge to achieve the necessary sustaining difference investments like these entail.

When organizations need to extend and open up their innovation into collaborations and operation sharing with partners requires significant trust, clear and robust governance, and a collective shared purpose of who contributes in paying in and who takes out the gains.

Ecosystems need a level of equitable value, or they fail to move beyond the concept stage. The process and discovery of what works and doesn’t is a learning journey where flexibility and adaptiveness figure hugely.

Industry landscapes are rapidly changing, and the level of dynamics in complexity and working to counter the disruptive forces needs constant scaling up and down. The partners for one challenge may be significantly different from another challenge.

Organizations that attempt to build their own platforms, believing this gives them an ongoing advantage, might find themselves locked out of different initiatives by taking this ownership position.

Platforms might be better managed independently of the ecosystems formed to tackle different challenges. Expansion, collaboration, and innovation need to remain highly flexible.

What we see emerging has been monitored in some useful future industry ecosystem predictions built up by the International Data Corporation (IDC). In two surveys, one for 2022 predictions and one for 2023, IDC shows how industrial ecosystems will evolve over three to four years.

I have been looking at these predictions and will summarize these in a future post.

The prediction that catches the eye is that organizations that share data, applications, and operations with their ecosystem will realize a 3 to 5% higher revenue increase than those that chose not to participate in ecosystem collaborations.

The second one is the growing recognition or the next step for those already investing to incorporate partners from outside the core industry, learning best practices more openly in sharing and exchanging, and adding assets, resources, and knowledge that may not be present today within their core industry.

The different predictions make up the top ten predictions for each of the years 2022 and 2023, showing a fast-evolving expansion of industry ecosystem thinking and design.

“Build and they will come” is far too static and lacking; the market needs of today and in the future will require far more dynamic, fast-evolving, multiple ecosystems that are central to any design and changing adoption strategy.

Ecosystem designs point towards the future. Are you adapting and adopting to the very different demands and thinking these will be needed to shape very different organizations in the future?

Why not reach out and have a chat? This might be critical to your future.

The post Future industry ecosystems will be highly collaborative and adaptive. first appeared on Your Ecosystem Design Hub.

What we offer today needs a change in emphasis of thinking out the evolution of platforms, into ones that are designed for building out thriving business ecosystems for all to collaborate around and build together.

I argue today, we need to change our stories into ecosystem thinking ones.

We need to shift our platform rhetoric into a vastly different one, one based on building the Ecosystem story, well defined in its understanding that requires a very intense focus on what it means within Industry design and expected outcomes.

Over the past three or more years, I have been studying and researching platforms and ecosystems. I feel we are at an inflexion point of significant business change from embracing ecosystem principles in the business world.

The key message from my reflection was, at the time, two years ago, “we do need to change our story; it is simply not about platforms“. It is thinking for the design for ecosystems, into “ecosystem mobilization.”

We need to think more about Ecosystem principles and design

We need to evolve our present IIoT platform position. Today, a change from the IIoT partner attempting to dominate requires a balanced approach for opening up to a greater collaboration and co-creation platform.

It moves from one-with-one to many-to-many through a specific platform hosted by the right IIoT platform provider.

My view of where we need to go:

Establishing an ecosystem of design allows a network of cross-industry players to work together through their chosen common platforms.

The depth and breadth of the collaboration undertaken between the participants can deliver a different value proposition to new consumer solutions or extend necessary capabilities through the cooperation and discoveries that combine and come together.

The value of this ecosystem generates solutions that when the combined parties collaborate, each of the parties involved gain greater value beyond operating as a single entity.

How providers can evolve through the three stages of IIoT platforms will be critical to success or failure.

The first trigging point of disruption occurs around IIoT platforms and what needs to move into the next phase of exploring and changing the value proposition.

I would content it is to refocus away from the platform message onto the ecosystem one; we are coming towards the second disruption point.

In these recent years, I have attempted to explain the new value proposition points in embracing ecosystem thinking. On this posting site, you see many of those thoughts.

Now the word “ecosystem” comes in multiple flavours and understanding.

One part of our new story needs to define and structure a ‘real’ ecosystem that manages not just creation but encourages evolution, as well as that essential need for some necessary destruction.

Ecosystems are full of adoption or adaption, rapid growth, growing maturity, and this inevitable decline.

We build the new story around collaboration, knowledge exchange and networks that combine their skills and expertise to find new value and business impact.

Ecosystems are not today’s story of partners that ‘simply’ sell, deliver and service the offering‘; it is about mobilizing, creating, designing a network of partners that have formed their ecosystem, one that is built on an open, shared value model.

Do I have a clearer picture of what is an Ecosystem design?

In my work and research, especially in the past three years plus, I have given it a depth of exploring and validation.

I believe the current IIoT platform providers value proposition is wrong, pure and simple, the market needs have changed. The proposition was based on their needs.

This outdated model needs replacing with the requirements of everyone looking for changing their value proposition and can see the real value and future impact in being open to exchange, collaboration and cooperation, as central to building a new business model validation.

A value in new designs built around those principles of co-creation, collaboration and networking relationships with careful consideration of the platforms that can help facilitate this

Let’s create and rejuvenate with Ecosystems?

Any ecosystem has to be carefully nurtured; it needs balancing and a shared value; otherwise, it will die. I like ‘ecosystem thinking’ in the business world because its very nature can shift us from linear thinking into more holistic.

The richness of diversity needs to come together, offering that ‘combining effect.’ We are creating value in combining technology and relationships in any ecosystem design.

The ability to delve into or broaden out our thinking gives us these opportunities to extend what we have or create something new. In any ecosystem evolution, ‘something’ or ‘someone’ will exploit a gap, a niche, and utilize this.

We often limit our capabilities and capacity because we do not ‘stray’ from the knowns into the unknowns. Ecosystems provide different business thinking that encourages and pushes frontiers.

The change into ecosystem thinking can lead us to find that unexplored point that gives new value and growth to our business. The combined realms of digital and physical meeting points allow us to do this in faster ways than ever before.

We can reach wherever we want to go if we embrace the value of business ecosystem thinking.

The post A case for change; thinking out the evolution of platforms and ecosystems first appeared on Your Ecosystem Design Hub.

The concept of Sustainability is still being pushed out in the future for many of us.

Why should we worry today? The “judgement” is that those Eco-friendly products seem to always be more expensive due to often unexplained or unfamiliar concepts.

As long as we can afford what we know and trust, then why worry or change? The question is, will this abundance, this acceptance that it is there, finally be changing?

Today we can’t see the value in shifting to a more sustainable pathway. We are expected to pay more for that higher cost of producing locally, growing food organically, using recycled materials, and many other factors that do add up to make a significant price difference when you compare.

We are reluctant to make the shift as it is still not compelling enough to change when we have abundant options.

We are being asked to understand and equate the significant differences between a product shipped from China, South Africa, New Zealand, Chile or Peru costing less than the one locally produced often does not stack up.

How can something be transported thousands of miles, similar in quality and yet cheaper, not confirm today’s need for affordability as our dominating thinking?

The economics of abundance in global supplies undermine our resolve to make a change. What is this need to be more sustainable? Is this about to change?

When we order online, we often go into an essential bucket list of comparisons; price, availability, speed and cost of delivery and the ability to track progress are today’s purchase criteria.

Quality and money-back guarantees have so often been levelled out in a global trading world, or the business runs the risk of having a short life, suffering being “trashed” in reputation and poor recommendation all over the internet. Comparing products on the internet has become a great leveller or decider on where we buy on service, (immediate) availability and price.

A globally connected world might be breaking down.

Have you noticed how much faster it often is to order a product from China than a neighbouring country, especially here in the EU, for instance? There are more restrictions imposed due to EU standards of production in place on EU origin products than those from further afield.

Often we get caught up in protectionism somehow to shield the local producer from those nasty neighbours.

Still, it is OK from a developing country, where the standards may not be as high, or the labour does not have the accepted (in our eyes) working conditions, but we decide to buy them as they are more affordable.

There seem to be global shifts as the recent pandemic showed that essential production had shifted and been far too concentrated in Asia as potentially risky. will this change the perception of consumers?

Jobs, the environment, securing supplies all came into a different focus in the West, overly reliant on Asia as the economic powerhouse for our products.

Today the mindset is shifting but is it fast enough?

The appeal of wanting to relate to recycled products or recyclable materials is growing in recognition and seen as having growing importance to consider in purchasing decisions.

Yet this alone is not enough; living in a rapidly consuming world where our natural resources to sustain it are quickly running out needs a more compelling narrative for Sustainability to be understood and take hold.

Without a significant shift in our behaviours and consumption patterns, we require complete sustainable solutions; simply, they don’t make the case to change our past and present behaviours if we only see piecemeal ones.

Is affordability changing? I would argue yes.

Affordability begins to reduce down; it is more what we are willing or have already given up and what that means. Hence we begin to rethink our values, and that leads to a different sustainability position.

Others influence us, and it is still so often by those closest to us. Current affairs have become higher in our consciousness.

Natural disasters, social unrest, and the growing wealth gap are becoming essential as we are not just seeing these on TV or reading about them; they are increasingly all around us. actually knocking on our door.

There is a shift in empathy where identification is now on the up.

Values are changing; we are becoming more extreme in our opinions, our perceptions. We support politicians, policies and companies that align with our values.

We have, it seems, stronger opinions coming out of the forced lockdowns and changes caused by Coronavirus requirements.

Privilege has become “our right”, and somewhere in this shift, Sustainability is finding a growing fertile ground in awareness and what we want to change.

Decisions are more personal, not collective.

We will take a pay cut to live the life we know feels a better one than before the Coronavirus hit us all in its impact.

This decision has shifted many to rethink where to live, the type of environment they want, and what they are prepared to “put up with” in driving or commuting, working environments, performance pressures, etc.

The door is opening for Sustainability.

Having clarity of sustainable strategies and purpose will put businesses in a better position to earn long-term consumer loyalty and trust.

Communicating a new set of actions and commitments designed to fight climate change, protect and regenerate nature, and preserve resources for future generations fits with what and how we want to identify with becomes a vital part of this communicating strategy.

Giving consumers far better, more informed choices by offering precise and transparent information about the sustainability and social responsibility initiatives being undertaken makes us all aware. Being informed is being empowered.

Business and Government are beginning to recognise the time is now to alter high levels of current scepticism, actively reducing bogus claims and avoiding getting caught in “greenwashing.”

Society, communities and individuals are picking up and questioning corporate or governance responsibility, driving a very different set of discussions around contribution and values.

We do seem to be making far more pivotal choices on what is essential in our lives. Sustainable living choices are rising

Change is being forced upon us through crisis; the growing understanding of our past actions, alongside our present ones, is giving us a growing awareness that we do need to change.

Our future actions need to be based on placing Sustainability central in our decisions. Reality is dawning that the (only) way forward as supply can’t keep up with demand, we all must rethink the actual and true cost of affordability.

Abundance might get replaced by scarcity, and we all recognise affordability goes quickly out of the window in those cases.

Hence, we need to jump onto this sustainability train fast if we do want to have still some level of “freedom of choice.”

I wrote this additional post looking more at how innovation can change our thinking on  “applying innovation thinking to affordability versus sustainability”

Choosing Sustainability then innovation has that real chance of being radical, distinctive and providing breakthroughs that can revolutionise and change our world. It can allow us to begin the pathway back to getting our planet and its limited resources into some semblance of balance.

Anxiety is on the rise, change is (certainly) coming

It’s a current reality, climate anxiety is on the rise, and as consumers become more concerned with environmental sustainability.

We all need to reorder our commitments to adjusting to forgetting simply “affordability” into one of ensuring “affordable sustainability.”

The post Affordability versus Sustainability – a cause to be addressed first appeared on Your Ecosystem Design Hub.

Today and in the future, we continue to take where we are in our technology and digital understanding and feed it more remarkable human ingenuity. Combining the collected knowledge found in a network of collaborators can dramatically advance the solutions sought by unlocking previously intractable problems.

We have entered the innovation era as we combine in ways not possible until recently. If we take any industry, any societal problem, as we tackle climate challenges, the power of connected innovation will make a difference and give us our breakthroughs.

We are still searching for the “how and what.” We need to push ourselves by opening up to the “where and why” in a network of connecting ways. We are recognizing sharing what we know accelerates understanding for all those involved.

Recognizing ecosystems are vital, combining human, technology, and data allows us to pursue multiple possibilities, explore them faster than before, evaluate them in quicker, more imaginative ways and scale those that show promise.

We must constantly look beyond the walls we build around ourselves, we think they protect us, but actually, they trap us in a limited universe.

If we do not cultivate sharing and embrace cross-collaborations, we never gain natural agility and see “value” beyond our limited experience.

When we stop from exploring, in investing time to ‘force ourselves, we stop failing. We need to learn faster and learn the ability to correct as we go. We need both the capacity for marathons and sprints.

What we value needs ethical guardrails; if we rely on what we are “feed”, we lose the ability to balance and reflect. We need diversity to fill our lives; however painful this sometimes can be, it gives balance and a new structure.

Four connecting themes provide a far greater set of dynamics by embracing’ an ecosystem collaborative design approach.

I believe these four connecting themes can release us and allow us to explore in an ecosystem way. A wonderful friend of mine, who teaches me so much, Antonio Grasso (@antgrasso), founder and CEO of Digital Business Innovation SRL, designed an infographic visual of these four themes after my original post in August 2020.

I wanted to repost these; they can inspire you to build the ecosystem thinking and designs that support your business.

I believe these four connecting themes can release us and explore innovation in an ecosystem thinking way.

A winning design that is aspirational, giving freedom to explore

• The shifting of critical capabilities can allow a higher level of freedom to explore, creativity and thinking. Combining new connecting and networking skills, collaborative tools, and a growing understanding of challenging the existing business models and orthodoxies is increasingly ‘on the table’ to move around differently.
• Others do not just hand down the understandings of empowerment. There is this understanding of longevity and duration that are under increasing pressure. Empowerment should be actively sought, based on providing consistent delivery, and collaborating skills are a winning formula.
• To overcome this, we need to be ready to ’embrace’ diversity, uncertainty, ambiguity, and complexity to become more dominating today at our top of mind. We “don’t freeze,” we need to explore and figure it out, are far better positioned to manage increased volatility and uncertainty.
• It is less about clarifying the ‘essence of organizing’ and encouraging self-organizing, adaptive resources to ‘given’ situations or breaking opportunities and rapidly explore these in execution and new design delivery.

Providing a nimbleness, offering greater navigating skills

• We have a very different evolving set of enterprise capabilities emerging. We are working increasingly in value webs where resources are far more fluid in their makeup.
• We are more flexible (or should be) in moving our limited resources to tackle the pressing problems and then disperse into new shapes to tackle the next one.
• These new adaptive infrastructures are growing in the nimbleness and navigation skills, more agile, iterative, continually experimenting, and focused on execution and learning quickly to adapt and adjust to this new understanding.
• The emphasis is on the speed of development, continuously experimenting, exploring, validating, and checking what contributes to value creation and improved experience.

Liberating the potential, exploring new pathways

• Inside most of our organizations, there is a need to liberate the potential. Employees and Entrepreneurs have a real hunger to tackle complex problems as that is the world we live in, and they want to help solve them.
• If only the management of organizations gave more encouragement and resource to explore and connect ideas and turn them into winning solutions, it simply “cascades” and opens up greater possibilities. We need to push in far more progressive ways to manage innovation; in its design and thinking.
• We need to find imaginative ways to unleash this ‘latent’ energy by tasking them to break down these problems into ‘boxes of emerging understanding’ to recombine, explore, and validate to show a different pathway and business model design.
• We can combine and share far more today as we have the collaboration tools to do the job and the visual thinking techniques to break out of the existing mindsets.

Transforming our world, sharing and combining

• I always thought the business need was about seeking growth out, establishing new competitive positions, yet this seems not the same today; we need to get back to this positive attitude in what we do. Today business is trying to steer a safe course, to actually “hold the course.” However, the storms always need to be confronted as we recognize the inevitable need, a necessity that change is where we are all heading irrespective, it needs to be engaged, it is unavoidable. We need to embrace change and all it means as early as possible and adapt so much as we go.
• The need for transformation and disruption beckons as technology and the digital forces deliver a very different world upon us, of platforms and ecosystems.
• It is becoming easier to build and rapidly scale a business and access money and investment if the business model shows real emerging potential. Many entrepreneurs invest their time and energy into hyper challenges, ready to cut across boundaries, traditions, and accepted practices.
• Today’s winning design is full of speed, scale, and scope, connecting into sharing this with the customers and different partners by combining forces and solutions that provide connecting experience. There is a need to face change, not merely ignoring it, which requires’ embracing’ transformation.

Thinking and designing within a world of innovation ecosystems alter your perspectives and opens up more possibilities to grow and create value.

Embrace Ecosystem Design Thinking and help solve the growing complexity we are all facing in the world.

The post Human Ingenuity, Ecosystem Thinking, Embracing Innovation first appeared on Your Ecosystem Design Hub.

I have been reading the Ecosystem Restoration Playbook – a practical guide to healing the planet, developed for World Environment Day 2021 to kick off the United Nations Decade on Ecosystem Restoration (2021-2030)

I do like the explanation of Ecosystems, lifted from the restoration playbook (see below). There is some real contradiction to how business applies the ecosystem thinking, and this post attempts to look at the differences and implications of treating ecosystems differently. This use of “ecosystems” is degrading as much as we are in our Natural Systems, mostly in the eventual resource depletion and our insatiable consumption.

By taking this business thinking of Ecosystems into continually pushing for greater consumer consumption is a growing problem. We are at a time when we need to place a break on this, and take a different position of replenishing or restoring what we have, and reuse it. With our drive for continued growth consumption and exploitation, we are compounding our planet’s problems.

I wanted to explore some differences within Natural Ecosystems and how Business uses Ecosystems to search for growth, scale, and dominance. We are in need to change our consumption habits and business growth models.

This is not a definitive list. It is more to stop and reflect where we are heading on applying ecosystem thinking, perhaps addressing its accepted context or adapting it to fit its new one being push in the business world.

To quote from the Ecosystem Restoration Playbook to start this thinking off here in this post:

“Ecosystems are the web of life on Earth. An ecosystem comprises all the living organisms and their interactions and their surroundings in a given place. They exist at all scales, from a grain of soil to the entire planet, and include forests, rivers, wetlands, grasslands, estuaries and coral reefs. Cities and farmlands contain important human-modified ecosystems.

Ecosystems provide us with priceless benefits. They include a stable climate and breathable air, supplies of water, food and materials of all kinds, and protection from disaster and disease. Natural ecosystems are important for our physical and mental health and for our identity. They are home
to precious wildlife. For many, they are a source of wonder and spirituality.

All over the world, ecosystems face massive threats. Forests are being cleared; rivers and lakes polluted; wetlands and peatlands drained; coasts and oceans degraded and overfished; mountain soils eroded, and farmlands and grasslands overexploited.

Unless we change our ways and protect and restore our ecosystems, we will not only destroy the landscapes we love; we will undermine the foundations of our own well-being and bequeath a degraded, inhospitable planet to future generations.

Earth needs help. The climate emergency, the loss of nature and deadly pollution threaten to destroy our homes and eliminate many of the millions of species that share this beautiful planet with us.

But this degradation is not inevitable. If we act now, we have the power and knowledge to reverse the harm and restore the Earth.

That is why the United Nations has declared the Decade on Ecosystem Restoration. Starting on World Environment Day 2021, individuals, groups, governments, businesses and organizations of all kinds can join forces in a global movement to prevent, halt and reverse ecosystem degradation and secure a sustainable future for all.

Healthy ecosystems are vital to meeting those goals. Restoring them is a massive challenge. But more and more people realize that we must change our ways and move urgently to protect and rebuild nature for the sake of future generations and out of love for the world we live in

As well as fixing ecosystems on the ground, let’s give them a break. It is our massive collective environmental footprint that is degrading nature.

We can tread more lightly by changing what we do, what we consume, and the waste we leave behind.

Over the next ten years, the UN Decade on Ecosystem Restoration will bring together governments, businesses, science and academia, and every concerned citizen to restore our planet.”

Protecting our ecosystems is essential and why this push for restoration becomes so vitally important.

The importance of what we need to do, reverse what we have been destroying in our natural ecosystems, needs all of us to find out how we can contribute.

But this playbook got me thinking about the differences between Natural Ecosystems and Business or Innovation Ecosystems.

I wanted to stop and think about the differences but also on some of the dangers of the ways we are conceiving business ecosystems that we are deploying today.

Ecosystems need re-stating for business. Are they real ecosystems?

Applying “Ecosystems” to everything is in itself degrading the understanding of its true intent, Ecosystems need to be appreciated as vital and essential.

We call something an “ecosystem”, which seems to provide a rubber stamp of being politically correct and current. Simply stating “we” is just opening up our thinking for outsiders to contribute.

What we are really doing to further grow out today’s business is to recognize the “network effect“. Many businesses claiming “ecosystem” are in fact taking open innovation and placing a greater emphasis on open networking to seek out diverse ideas.  The more connections, the greater the diversity potential and bringing different ideas or views into the thinking and possibly deriving more value; this a not a good interpretation of ecosystems.

I wonder if we have often just taken to the word “Ecosystem” the same as “Innovation”; it can and often does mean different things to different people.

They both convey the purpose of new growth intent. Still, business seems to me to so often simply offers these as “greenwashing”, conveying a false impression or providing misleading information about how a company’s products are changing to attain stakeholder approval.

We do need to think about ecosystems in a deliberate design

Applying a level of ecosystem thinking really does allow opening up the (internal) thinking to more diverse, open thinking. This appreciation allows for greater collaboration and appreciation of each party’s contribution.

The need within the building out of any business ecosystem in the future has to think about the notion of the circular economy.

The Ellen Macarthur Foundation does an excellent job of describing this circular economy asking the question: “What will it take to transform our throwaway economy into one where waste is eliminated, resources are circulated, and nature is regenerated?”

Also, we are in urgent need of building a much greater appreciation of what Sustainability means. I wrote this “Reshaping the core of your business through a focus on Sustainability“. It gives a helpful set of values and attributes needed in taking a sustainability approach.

Just let’s hope “sustainability” does not become another catch-all word like “ecosystems” or “innovation” has become; overused, undervalued, and not fully understood on its significance to build a business differently. It is so often just promising growth by liberally applying this and not recognizing this requires fundamental changes in business design, resources and strategic thinking.

Let me take some differences I see between Natual and Business Ecosystems

So drawing from the points made in this Ecosystem Restoration Playbook and looking for (immediate) differences.

-Businesses tend to designs Ecosystems as “competitive forces”, not valuing “competing forces” that need consideration.

-Business ecosystems are looking to “transform” the landscape in a given time, whereas Ecosystems are “evolving” over a given time.

-Business ecosystems tend to ‘force’ change; they impose it. Within Natural Ecosystems, those more dominant species or plants, trees etc., also can impose themselves. Still, it is more based on natural evolution, not a forced one, unless something (mostly humans) intervenes to alter the balance radically, often not anticipating the consequences.

-Business ecosystems seem mostly not to want to conserve, consolidate and balance; they are looking to change, redesign and disturb the existing radically to produce more.

-Ecosystem design should protect, nurture and grow out the existing, but often, as in the business case, it is very self-centred. The intent is to (re)build its position with the intention of being dominant or gain a superior advantage.

-Business Ecosystems look to be agile, responsive to rapid change and disruption and gain that faster “speed to market”. Natural ecosystems react and respond but at different evolutionary speeds, adapting over time to their changing circumstances.

-Partnerships are sought out in both a natural ecosystem and a business one. The difference is that the natural one is looking for being self-sustaining but recognizing its reliance on dependencies. In business partnerships, the need is to specifically search for diverse and complementary capabilities, to advance a radically different position and build a more dominating market positioning.

-In a business ecosystem, companies fight for the best partners, technologies and networks to create, build and defend added value. Equally, in a natural ecosystem, there is the survival of the fittest to determine existing value. Yet, we need to often not think about all the different “dynamics” within the communities formed or being formed and future consequences or changes.

-The business ecosystem is looking to develop that outside-in philosophy of finding new value, whereas the natural one is more of an inside-out, already showing and maintaining its value.

We can adapt and have an effective navigation system to adjust or shift to constantly “maximise value” in business ecosystems. In contrast, a natural ecosystem has its place that can and does evolve, but maximising can disturb and actually, eventually destroy.

The business ecosystem is characterized by several unique attributes that I can see evolving.

• To be highly effective in today’s competitive world, business ecosystems require perhaps hundreds of collaborators.
• The collaboration is enabled by a digital thread, as its pulse
• Collaborations seek the not so obvious partners within the network
• Evolution needs to be rapid, relationships shift and mature as the recognition of finding the competitive advantage gathers in pace or shows signs of early failure

There are some challenges and contradictions that need evaluating

-The sharing, exchanges of information and intelligence needs a created IP framework, whereas we, as humans, struggle to find the connection dependencies in natural ecosystems. Often we interfere and destroy the balance

-Business Ecosystems are there in design to transform; regretfully, in the natural ecosystems, we as humans have imposed and transformed far too much that we are at that point of crisis.

Ecosystems are important, as the Ecosystem Restoration Playbook – a practical guide to healing the planet, suggests.

Redefining Ecosystems into their different types.

I do like one reference I found that overall, there are four major types of ecosystem services: provisioning, regulating, supporting and cultural.

Ecosystem services are all the processes and outputs that nature provides us with. These include provisioning services (food, water), regulating services (wastewater treatment, pollution control), supporting services (shelter), and cultural services (recreation and tourism).

Now, what if we similarly defined business ecosystems? Provisioning services, regulating services. supporting services and cultural.

That might be an interesting way to define business ecosystem approaches as well, and they can evolve by being more specifically designed on their business or societal intent.

Ecosystems are so important; as we seek these in business, we might want to reflect on the need for sustainability.

Ecosystems are the web of life on Earth. The growing realization within the business that this Ecosystem thinking, adjusted for its purpose and needs, is perhaps offering a different future for sustaining what is there but at what long-term cost?

My final thoughts here

My final thought is taken from the Millennium Development Assessment in 2005 on Ecosystems and Human Well-Being on the first two of their main findings in my ecosystem evaluations.

– Over the past 50 years, humans have changed ecosystems more rapidly and extensively than in any comparable period of time in human history, largely to meet rapidly growing demands for food, freshwater, timber, fibre, and fuel. This has resulted in a substantial and largely irreversible loss in the diversity of life on Earth.
– The changes made to ecosystems have contributed to substantial net gains in human well-being and economic development. Still, these gains have been achieved at growing costs in the form of the degradation of many ecosystem services, increased risks of nonlinear changes, and the exacerbation of poverty for some groups of people. These problems, unless addressed, will substantially diminish the benefits that future generations obtain from ecosystems.

Perhaps by adopting ecosystems the way we are in business, in this constant search for new growth and the higher impact, we are accelerating the further depletion of precious resources in a consumption-driven society. Ecosystems need to strive to have a (careful) balance; otherwise, we can have serious long-term unintended consequences.

We need to take care as we promote the concept of sustainability within business ecosystems, which we are or will be doing.

We need to give back more than we take out of them, our ecosystems. That requires a more sustainable approach (referring back to a previous post of mine) in any full consideration of any business ecosystem design.

The post Ecosystems are really important, are we correctly applying them in Business? first appeared on Your Ecosystem Design Hub.

If the decision is made to become more focused on “being sustainable”, drastic shifts in direction will undoubtedly occur.

The shift from that fear of being disrupted due to the digital transformation is being replaced by the need to build a sustainable company built on increasing insight and connected understanding, seeking and exploring, experimenting and confirming a new value equation.

A huge mental mindset needs to make leaps of faith and adjustments to this new order of focus.

That set of decisions will require a dedicated, focused, systematic need to assess the portfolio and the operating conditions. This goes way beyond the present “where to play and how to win”; this becomes as much for the long game as managing the short term.

The four focus points for Sustainability

The focus is on undertaking and shaping a new core through four focus points;

a new set of strategic choices, evaluating both product and operation reinvention, and fourthly, re-evaluating your innovative partnerships within a new Sustainability ecosystem design.

To embrace sustainability, you embrace a new set of principles of governance that bring the planet, people and prosperity far more into the thinking.

How do you assess if your current business portfolio is sustainability proof of not just what is required or needed for today but also in the future? What would that mean in the magnitude of change? Different scenario thinking needs a constant mindset and evaluation.

The argument is to envision today going forward and the future working back for framing the different scenarios.

Each of these different approaches to framing future challenges requires different thinking. The two perspectives, predicting forward, working back, give insights into alternative positions and build out required milestones for the next 5,10, and 20 years can have very different outcomes.

Investing time in deep, thoughtful evaluations of how and where sustainability fits bring impact and the substance becomes critical.

To begin to think through any sustainable journey, you need to consider:

Begin to ask the harder questions

You may not have answers but asking the bigger questions enables you to open up thinking, reflect, reconsider and revise opinions. Where does our business fit within and alongside society, both in who we serve and society in general, coupled with realising that the planet is heading towards a critical crisis, and what can we do to reduce these pressures?

Driving behaviour change towards a sustainable culture is paramount.

The nature of behaviour changes in collaborations, in working conditions, in health and safety concerns. The need for ongoing social and environmental risk screening becomes central to monitor and report upon constantly. How are you driving down power consumption, achieving net-positive impacts, and changing behaviours?

Strengthening and invigorating innovation partnerships.

The whole urgency of collaborating has grown and given the importance of managing through ecosystems and platforms where parties can manage and share. Developing the capabilities and competencies to address sustainability issues needs a new open, collaborative mindset. The push for establishing robust sustainability ecosystems will be relevant within the new core to manage the business differently.

The assessment of the current business and what can change

To embrace sustainability requires a no-holds-barred assessment of the present business and what is required in resources, shifts in strategic design and stakeholder dialogue. The journey does need a robust level of quantifying the disruption, for not just better-informed decisions, based on fact-based our best assumptions. Any journey like this needs to commit to moving forward, learning, pivoting where needed, recognizing what and why that has been seen and understood, and re-affirming the moving forward again in approaches.

The human challenge and seeing capital in broader senses

To become aware of sustainability at the core of business design, it needs developing groups of sustainability talent, more mission-driven, not just commercially focused. The importance of natural capital and social capital comes “alongside” financial considerations.

Sustainability is critically important. It needs this ecosystem and future innovating perspective as it is a combined effort, the gathering point that we all need to relate to and focus upon.

The recognition of sustainability is well beyond just one company

Firstly, the bigger picture of what you need to achieve must always be factored in to protect and support the ecosystems we need to nurture and grow; firstly, appreciating natures capital, and secondly, constantly paying attention to our actions on the climate and decarbonization, I outlined some initial thoughts in this recent post, “Looking beyond ESG”.

Secondly, we need to achieve far better consistency in Sustainability reporting. Many of the reports you work through are attractively presented but lack the real depth I feel this reporting needs. Thankfully there is a significant move towards a comprehensive corporate reporting system that integrates sustainability reporting with mainstream financial disclosures. I discuss this in a post that focuses on a business, building “Sustainable Value Creation”.

Be careful of your core metrics- they liberate but also can constrain.

Shed your past mindset on measurements. Sustainability is not determining core metrics and disclosures that become set in stone. They can keep you strapped in a straight jacket of reinforcing metrics and not fully appreciating the materiality need, searching for the information and insights that are important, relevant and /or critical to long-term value creation. We need to recognize that materiality is a dynamic concept, meaning issues considered relevant to one focus aspect can rapidly shift to different materiality. We need to be agile and react if the impact applied can be wrong and needs adjusting. Recognize it and then adjust and fix it.

Finally, embracing the world of intersections.

Sustainable Value Creation (the rationale for taking this journey) lies at the intersection of social and corporate values. That suggests that sustainability needs to be the new growth core; it embraces sustainability as a new direction of travel. Embrace all the intersections, seek out the networks and relationships that will bring fresh insights, open up your thinking but also challenge so much of our present “closed down” thinking.

Again, I raise this point in summary: To embrace sustainability, you embrace a new set of principles of governance that bring the planet, people and prosperity far more into the thinking. What would that mean in the magnitude of change?

The post Reshaping the core of your business through a focus on Sustainability first appeared on Your Ecosystem Design Hub.

Orchestration has become synonymous with managing or dealing with (specifically) external partners. The need is to learn to cooperate to produce something different and original, usually in a platform and ecosystem arrangement.

I am continually reading about scale, modular structures, governance, the advantage of asset-light business models where the possibilities of speed and breadth of open innovation need to “kick in.” Orchestration can take on a lot, but we need to define the role a little more, in my opinion.

I often wonder if all this orchestration through ecosystem design does achieve that radical breakthrough or have become just another solution or coordinating mechanism and a convenient “tag” to attach to it to consider?

I wrote an article on “defining ecosystems in industry, ” which will have some additional context here.

For me: Ecosystem design is about being open in all potentially valuable proposals and co-creation possibilities and finding the opportunities to engage openly in collaborative forums you can trust and execute your thinking and needs. You look to connect and collaborate as broadly as you can. It is seeking out diversity, experience, and new insights you not only can grow and build out further, along with those within the community grow with you in this partnership towards a better value and impact.

Here I want to discuss the orchestrator’s role specifically.

The orchestrator needs to shape our operating environment.

As business becomes more unpredictable, we do need to attempt to shape or reshape our operating environment. We are more in need of alignment than ever. As we lock into collaborations, we need to understand the required partners’ roles, activities (skills, solutions, technologies, etc.) to bring additional value to the top of what one organization might have.

The growing difference, actually one of the hardest things to do, is for the organization to orchestrate to let go. What does it give up in control or value to enable a greater sharing of the improved importance of building this design ecosystem? Does it achieve a faster scaling, a more flexible, adaptive environment that partnering offers?

Mostly it does the very opposite unless it has a purposeful design. It needs building governance, protecting positions, managing intellectual property for accommodating different organizational operating systems or viewpoints of “their” narrow value objectives. Orchestration needs to accomplish these and much more.

So many organizations have built out their internal capabilities for handling the launch, scale, and design of their view of “going to market”. It becomes such a tough challenge to understand and accommodate many different approaches or processes. As we still lack a common understanding of innovation, operations, structures, and the number of dedicated resources and where these fit within the one organization, how can we align these?

Orchestration needs to pull everything together.

Each time I view that visual above, I can imagine the first practice of a set of musicians all coming together for the first time and producing a cacophony that has no harmony. The job of the conductor is to break this down and build the parts into a collective whole. That, for me, is the orchestration role in any business ecosystem or managing within a platform.

The whole needs a clear orchestrating of behaviours and discipline. Each musician knows his instrument or, hopefully, so and needs to understand and interpret the score. It is for the conductor to give his rendition on how it should come together and be managed.

A great conductor can unite and provide the strategic direction and interpretation and guide the orchestrator or business partners to bring what they have as individuals into a collective harmony. That takes hard work and everyone’s commitment and identification of what they want to achieve.

In business, we call this orchestrating network behaviour. In search of the optimum balancing levels of autonomy with bridging these individual skills. To get to this point, the orchestrator needs high trust and mutual understanding to be powerfully prevalent. The result is to form tighter structures and keep as much of the individual, perhaps unstructured aspects, to give individual freedom and creative opportunity. It often explores open interpretation that turns a musical piece from being average or satisfactory into a brilliant rendition. In orchestrating an ecosystem of partners, you are looking for individual expression and collective awareness.

So, the orchestrator needs to pull out the network effect, to seek out creative spaces, those individual moments, but then pull them together in a co-creative way. The linking and communicating of these produce the combined sound or difference that profoundly influences innovation.

The orchestrator needs to conduct and bring out the best performance.

Being the orchestrator of any ecosystem design in business requires a clear understanding of all the parts. To ask anyone to step up and conduct is not an option; it is a disaster. The person who can genuinely orchestrate brings out the real underlying value of the parts to produce the innovation performance needed. The power of the ecosystem is in its orchestration and design.

It is the interpretation by being the primary party. The orchestrator provides the pace and tempo, they build and create the dynamics, and they are the ones that do articulate the vision, mission, and objectives.

The orchestrator needs to understand what the ecosystem is attempting to do clearly; the orchestrator needs to lead in the design and interpretation of the vision. There is so much in the dynamics of ecosystems that do need managing the beat and tempo.

**An earlier article, “The Orchestration Role in Any Business Ecosystem Design“, has been shortened here, with small modifications

The post Orchestrating the New Ecosystem Business Design. first appeared on Your Ecosystem Design Hub.

We have new frontiers and unexploited opportunities everywhere when we push through today’s constraints. We have more connected hardware to open up our physical and digital realms, and thirdly we have access all the time to more real-world data than ever before—the birth of the digital and physical ecosystems that enable innovation like never before.

We have some awesome power available to us; can’t we unlock the potential to change where we seem to be heading?

We have entered the new innovation era as we combine in ways not possible until recently. If we take any industry, any societal problem, as we tackle climate challenges, it is the power of connected innovation to make a difference and give us our breakthroughs. We have the tools to tackle big (and stubbornly small) challenges in collective environments.

We are not changing everything as we are still searching for the “how and what”, but we are pushing ourselves by opening up to the “where and why” in such different connecting ways. We are recognizing sharing what we know accelerates understanding for all those involved.

Understanding Ecosystems and how they work is becoming essential for us.

Recognizing ecosystems are vital, combining human, technology and data allows us to pursue multiple possibilities, explore them faster than before, evaluate them in quicker, smarter ways and scale those that show promise for all of us to be more efficient, considerate and respectful of finite resources to undergo a change from individualism to revaluing community and supporting each other in resourceful ways and respecting all that is around us needs to be more balanced.

We can search not just for entirely new capabilities. Still, also we can take real advantage of actively reshaping so much to rejuvenate and value much that is all around us in different ways of behaviour and reflection. It is the power of ecosystems that can allow us to innovate differently, more designed for sustaining .what we have of this plant we rely upon.

We need a new way to work in ecosystems, different from our past. In simple terms, we begin in well-judged steps:

• We must constantly look beyond the walls we build around ourselves, we think they protect us, but actually, they trap us in a limited universe.
• If we do not cultivate sharing and embrace cross-collaborations, we never gain real agility and see “value” beyond our limited experience.
• When we stop from exploring, in investing time to ‘force ourselves,’ we stop failing. We need to learn faster and learn the ability to correct as we go. We need both the ability for marathons and sprints.
• What we value needs ethical guardrails; if we rely on what we are “fed”, we lose the ability to balance and reflect.
•  We need diversity to fill our lives; however painful this sometimes can be, it gives balance and a new structure.

We need the power of those around us to coalesce into a collaborative environment where innovation thrives in an Ecosystem world that recognizes the importance of collective system learning to interact with all of its parts in better, more thoughtful ways. Ecosystems offer the environment for us to evolve.

The post Ecosystems offer us infinite possibilities first appeared on Your Ecosystem Design Hub.

I want to give a more dedicated focus on the digital twin that is becoming more dominating in our world. So I will explore these increasingly over different posts. This is the first to give a short history and explanation of digital twins before we look deeper into the role the digital twin is taking in industrial predictive applications and visualization and how this is evolving into being comprehensive in its design, allowing twins to be built on processes, products and production to relate, anticipate and simulate actual activities or physical needs.

So, where are we on understanding the value of having a digital twin? No, not yet one for ourselves but given time we will, we already have a digital twin of a heart.

I was reading a post by Dr Heppel, “Healthcare solution testing for future | Digital Twins in healthcare.”

“Digital Twins of complete human beings are still a futuristic dream now. However, some headway has been made with, for example, Dassault’s commercially released “Living Heart”—the first realistic model of a human organ that accounts for electricity, mechanics, and blood flow in the heart. The software can turn a 2D scan from an individual human into a personalized full-dimensional model of their heart.

The user can manipulate it—stick in pacemakers, reverse its chambers, cut any cross-section, and run hypotheticals. The Digital Twin has been pieced together from information shared by numerous research groups. To make a Digital Twin of a whole human body, all organs need to be modelled and integrated. Since many organs are more complex than the heart (e.g. the brain), this may still take a lot of work to achieve.”

The growing value of having a digital twin of our physical assets in manufacturing operations or applications or to assist in health where they require the need to monitor, diagnose or be prognostic to optimize asset performance and utilization is increasingly providing new additional value.

Examples of industry applications are aircraft engines, wind turbines, large structures like offshore platforms, offshore vessels, locomotives, buildings, health equipment like scanners, hospitals or whole production plants. Today, we see digital twins in complex, large industry assets but increasingly value smaller assets. Digital Twins of farms, jet engines, whole planes, cars, coffee machines, factories that make machines, oil drills, and wind parks.

Origins

The term “Digital Twin” was defined by Dr Michael Grieves at the University of Michigan around 2001-2002. He originally defined this in the context of Product Lifecycle Management. In his paper, he introduced the concept of a “Digital Twin” as a virtual representation of what has been manufactured. He promoted the idea of comparing a Digital Twin to its engineering design to understand better what was produced versus what was designed, tightening the loop between design and execution.

Tom Maurer, Senior Director of Strategy at Siemens PLM Software, defines the Digital Twin as “a digital model that accurately represents a product, production process or the performance of a product or production system in operation.”

GE suggest “a Digital twin refers to a digital replica of physical assets, processes and systems that can be used for various purposes. The digital representation provides both the elements and the dynamics of how an Internet of Things device operates and lives throughout its life cycle.”

Srivathsan Govindarajan, Vice President, SAP Digital Twin, summarized it as: “A Digital Twin is a dynamic digital representation of a live physical object and needs to represent specific aspects of physical objects like shape, working state and structural behaviour. Digital Twins will dynamically change in near real-time as the state of the physical object changes.”

Ultimately, a Digital Twin will unify all the data an organization needs.

To many, the Digital Thread is considered to end within manufacturing, but it is so much more.

Lets firstly, look at the concept of the digital thread. Not only does a digital thread enable secure and effective data collaboration both internally and externally, but it also supports the entire PLC System to an ISO standard.

The concept of a Digital Thread has been gaining traction for a while.

It often seems to be focused on manufacturing: Digital thread is a communication framework that connects traditionally siloed elements in manufacturing processes and provides an integrated view of an asset throughout the manufacturing lifecycle.

The digital thread refers to the communication framework that allows a connected data flow and integrated view of the asset’s data throughout its lifecycle across traditionally siloed functional perspectives.It has been depicted as the equivalent of the rail map of all the connecting stations, explaining how and where you need to go.

“The digital model matures through the product lifecycle during design, manufacturing and operation,” said Robert Harwood, Global Industry Director at ANSYS. “This digital connectivity through the life cycle can be described as a Digital Thread, which is not linear but circular, with data from all stages being fed back into the product ideation and creation stages.”

Maurer agreed: “We connect this information with the Digital Thread. We see the Digital Twin as a level of intelligence to predict real-world performance, and the Digital Thread is the connectivity and context for business decisions. It connects the design, operation and simulation information.”

Doug Macdonald, director of Product Marketing at Aras, describes Digital Thread as the connective tissue between the Digital Twin, IoT, and any other data source. It’s the channel through which information is fed back into simulations, product design and other aspects of the Digital Twin.

The digital twin provides the insights to inform the physical and influence its performance

The digital twin has become not just the backbone of manufacturing; it has become the backbone for designing cities. The tangible and physical design needs to design such things as aircraft, buildings, complex hospital machines, cars and understanding complexity in the flows in air movement, water, ingredient mixing for example.

The digital twin has become essential in the food processing industry and is rapidly taking hold in the pharmaceutical and chemical industry. Understanding the full process and its design relies on the digital twin increasingly to inform and evaluate options and operational design.

The evolution of the digital twin is promising and equally exciting. It is delivering the digital ecosystems of design.

The post Getting Comfortable with Your Digital Twin- Origins, Purpose and Definitions first appeared on Your Ecosystem Design Hub.

Siemens Smart Infrastructure offers many different solutions to achieving this change at the energy grid edge. Recently, to amplify this, they have been holding a conference over two days entitled “the grid edge summit“.

You can still register here as the event is available for some time to view and explore. It would help in understanding their solutions if you visited their different energy topic areas. Here Siemens offers you a significant range of choices, solutions and advice on Grid Edge topics to give you time to check out some of the #GridEdge tech & solutions.

These topics and solutions are organized under decarbonization and sustainability, distributed energy solutions, the integration of renewable energy resources, mobility charging, and the consulting and financing solutions available to utilize. The main conference event is a series of talks and panels exploring the topics above.

One panel I particularly enjoyed was “Financing Decarbonization.”

Why did I specifically enjoy this panel? Firstly, three really knowledgeable panellists within the Siemens Financing team provided different perspectives and experiences.

Let me offer some background before the panel perspectives that I took away.

First, one of the major inhibitors of the energy transformation is the inability to raise finance. Clearly, societies can reap multiple benefits from investing in clean energy and modernizing energy systems and strengthening energy networks through upgrades to equipment, shifting energy sources, or implementing a digitalization programme for improved efficiencies and effectiveness.

The essential investments for energy efficiency, electrification via greener buildings, replacing ageing equipment or retrofitting existing assets are massive opportunities. But, equally, as we roll out new technologies or building new infrastructure for electric vehicle charging, investment becomes the key.

So often, the private sector waits for the Government to lead the way. Yet, an unprecedented increase in clean energy spending required has repercussions of delaying the pathway to Net-Zero. Electricity consumption in both emerging and developing economies is set to grow around three times the rate of advanced economies brings scale, scope but real financial challenges.

Mobilizing capital needs to progress at a much larger scale, and the role of the private sector will be critical to catalysing investment. Today, many banking and financial institutions are struggling to provide financial instruments or equate equity and debt risks as they are less familiar with new technologies or lack the proven risk/ return profiles.

Against this “bigger picture” background, I wanted to determine what Siemens Financial Services provides through specific packages related to the Siemens Smart Infrastructure side.

When you start with the classic “there is much to be done“, you immediately get a sense of what stage the “industry” of financing energy is presently at—the early stage of building the understanding and business cases for financing the energy transition specific projects.

The panel started by summarizing, “What is motivating businesses to decarbonize?”

The pressure’s building, from society, from governments, from international agreements for building the appetite to change the existing operations or facilities. Decarbonizing provides those essential credentials of being responsible, attracting financial investors to prepare for future legislation coming down the road. Replacing ageing assets with more efficient and environmentally friendly ones is a financial burden. Still, financing packages help move towards more economic competitiveness if the efficiency and effectiveness of the change are well worked through.

The specific drivers of decarbonization can vary, but these fall under four broad headers in the panels’ opinion. First, the overwhelming need is to reduce energy use in your operations and facilities, secondly to procure green energy from renewable sources and reduce the CO2 footprint across the entire value chain gives real future value. Thirdly, to equip sites with a decentralized energy approach in storage, solar generation reduces dependencies and potentially smooth out price and energy demand to meet your specific needs. Finally, fourth to get to a 100% carbon neutral point.

Matching ambition with financial prudence

To take on new equity or debt needs the consideration of many parties and balancing out all the projects needing business or public institution attention. For example, energy is often not the business’s core; the product or service is. The building or plant are assets needed to produce or deliver those products and services. That core needs consistent investment in upgrading equipment, continuing the digitalization upgrades, upgrading employee skills and learning, etc.

The list of financial demands goes on and on. We have all been in meetings on budgets where the jockeying for money or resources takes up time and energy. So somewhere down the list is finding money for switching energy, improving building efficiencies or shifting to different approaches when the existing ones seem presently adequate.

It is against this competing background the financier of energy system change has to compete. Municipalities, universities, schools, hospitals have to consider the society they serve, show prudence on spending public money and think of budgets as always in very tight situations. For commercial or industrial customers, shareholders or financial providers are constantly looking at the effectiveness of the “spend” against the return of increased sales or improvements in the bottom line.

The balancing of budget allocation, Opex and Capex, cash flow and risk management are the decision pain points that the energy financial provider must find answers to.

Three approaches to bringing energy change and decarbonization to realization.

Siemens are a renowned technology provider. To sell new solutions needs a buyer willing to listen. Having financial options within the same room does make for a different selling/ financing proposition.

New technology is built on extensive research and testing. Existing solutions that have been tried and tested for many years builds a clear reputation and narrows choice. Any customer nearly always wishes to have the latest solutions, the best configurations or ways to optimize and maximize what they have. Therefore, solution providers are essential partners if they want to grow and sustain the mutual business over time.

Siemens are clear on their sustainability pathways.

The fostering of collaborations over time becomes an ecosystem of mutual dependence. To add financing solutions as possible solutions adds to the strengthening of these ecosystems. The panel outlined financial solutions around three broad approaches.

1. Customer financed projects where milestone payments are agreed during any implementation period and performance and saving guarantees built-in from the Siemens perspective to bring a mutual financing package. This is taking in a phasing recognizing financial constraints in each project or customer circumstance, with the return value flowing in from the performance improvements and saving offsets overtime periods as agreed between the parties.
2. Deferred payment performance contracts structured similarly to the 1st but clearly an option considered perhaps due to greater financial constraints.
3. Energy-as-a-service. This is rapidly taking hold where pre-defined service payments, saving, and cash flow positive methods are worked through over agreed times. The asset stays off the customer’s books, and ownership is with Siemens until the contractual terms have been achieved. The asset ownership versus cash flow payments has clearly high engagement of accountants and auditors here.

So, each customer has different financial pain points.

These pain points could be public or private budgetary concerns on where to spend the limited money. The considerations need to balance multiple investment projects with different financing options, the recognition that energy or asset use and the cost is getting close to being inefficient, or an escalation in operating costs. Then you are faced with the decisions to take any new costs either on the balance sheet vs the P&L.

Consideration to reduce these pain points can also include the need for fiscal flexibility in extensive upgrading of infrastructure demands to overset changing market conditions (switch of energy fuels or automation changes) or changing demands in regulatory or environmental needs. Or simply the inability to take on more upfront capital burdens, restricted options to create new revenue on existing approaches, or have multiple locations needing solutions that become financially restrictive.

The panel provided some great examples of how they looked at individual needs and addressed challenges collaboratively with what I feel is the underlying tenant of “Siemens as your partner”. Having the technology to solve the issues and reduce the worries over bringing equipment, infrastructure or solution into ones that move the decarbonization pathway along in more efficient and effective ways, through imaginative financial mechanisms, gives the supply and buyer real options.

You will gain a good understanding from this one hour panel of considering financial options.

Clearly, as financial packages or instruments continue to get defined in the decarbonization of the energy system to bring about change, financial institutions and banks will recognize and accelerate their provider value. Large infrastructure projects are clearly different from individual ones to be scoped, agreed and implemented.

Siemens Financial Services helps with the speeding up to low-carbon technology solutions with a pragmatic approach to encourage switching, creating savings as the primary result, integrating with the existing or partnering in the new, and finally supporting the speeding up transition in our Energy Systems that is undergoing such a massive transition in the next decades.

This was a good panel to gain a sound understanding of financing options that Siemens provide. I recommend it.

You can still register here as the Grid Edge event is available for some time to view and explore.

Main Siemens Financial Services link:

https://new.siemens.com/global/en/products/financing.html

Grid Edge Summit link page to Finance solutions and background (need to register for this)

https://grid-edge-summit.expo-ip.com/stand/1143

Siemens Smart Infrastructure:

https://new.siemens.com/global/en/company/topic-areas/smart-infrastructure.html

The post Financing Decarbonization in Energy and Infrastructure first appeared on Your Ecosystem Design Hub.