Digital platforms are two a penny and every business has one, if you believe the hyperbole surrounding this latest facet of the digital economy. Gartner Group describes them as the mechanism to bring together a clutch of subsidiary platforms, which enable organisations to interact with their customers, things, people, ecosystems and intelligence. In short they are the mother of all platforms and a must for digital success.
Not so easy to accomplish in reality, then, and they go way beyond a website that simply automates processes and makes these accessible by putting them online. Crucially, digital platforms entail collaboration, and the analyst group cites them alongside artificial intelligence and transparently immersive platforms in its briefing Three Megatrends that will Drive Digital Business into the Next Decade.
Digital giants aside, such as Amazon and Google, smaller players and entrepreneurs are recognising the opportunity and jumping on digital platforms fast. Sport:80 is a platform for international sports federations and unites the common interests of the community, explains chief executive Gary Hargraves. “It enables them to access commercial opportunities that wouldn’t otherwise be available, allowing a minority sport, such as fencing, to combine forces and pitch for major sponsors in the adidas league.”
Smaller players are jumping on to digital platforms, embracing the chance to play with the big boys
Some components of a digital platform, such as customer relationship management or CRM systems and IT infrastructure, have been around for a long time, while other technologies, including artificial intelligence, are grabbing mindshare in the boardroom. It’s little wonder that business chiefs have not yet clocked the urgency of acquiring or joining a fully fledged digital platform, says Don Scheibenreif, vice president and distinguished analyst at Gartner Group.
The biggest blocker to operating a digital platform is the mindset and an organisation must first identify its digital ambition, says Mr Scheibenrief. He asks: “Does it want to optimise existing systems to increase efficiency or wish to participate in ecosystems to create new kinds of value?” The next big question is how to actuate it. “CEOs need to work out whether they want to create their own platform or join one,” he adds.
Complicating matters further for those who opt to invest in a digital platform, the decision is often a leap of faith. “When we talk to companies, there is an assumption that they will know the services and returns it will yield in advance,” says Mr Scheibenreif. Often this is not the case, and value flows from the process of knowledge-sharing and the discovery of new ways of doing business.
Skywise, the open aviation digital platform launched by Airbus, is an example of how working together digitally can unearth hidden treasure. The platform was devised to enable Airbus engineers and maintenance crew from airlines to work together to improve fleet operational reliability through predictive maintenance. The parties stumbled upon extra value in the shape of reduced time to complete statutory forms.
Further evidence that being part of a shared digital platform can open up a fresh approach to problem-solving comes care of Amazon, DHL and Audi. For the past two years, Audi owners have been able to request that their Amazon package is delivered by DHL to the boot of their car. A one-off security token allows the courier to pop open the boot, one of the surprising outcomes of companies sharing their capabilities.
Audi Connect Easy Delivery is a neat example of players from disparate sectors joining forces on a shared digital platform, but many current endeavours come from vertical sectors. Germany is spawning several digital platforms in an attempt to capitalise on its lead in Industry 4.0, a connected manufacturing initiative that joins factories, supply chains and the internet of things.
Virtual Fort Knox (VFK) is one such initiative, a secure manufacturing marketplace that was created as part of an open federated platform by the Fraunhofer Institut in partnership with DXC. Johannes Diemer, Industry 4.0 adviser to the German federal government was a protagonist in the prototype and flags up the technology and governance issues that must be addressed to ensure broad participation in platforms.
“We have built an ecosystem secure enough to reassure and attract potential users who are asking questions such as, ”Why should I use the platform Virtual Fort Knox?” and “Is my commercial knowledge and intellectual property sufficiently protected within the framework of co-operation?” A design principle of VFK is the strict separation of data shared for the purpose of collaboration from data that the company wants to keep confidential.
Mr Diemer points out that such questions need to be satisfied not only in a technically sound manner, but also answered by taking into account socio-emotional aspects. “Achieving acceptance calls for a clear value proposition for each participant, a convincing security approach, including the organisational set-up, and finally trust. We call it the triangle of acceptance and trust is an essential third factor, built upon transparency,” he says.
Mindset and governance certainly have a part to play in validating digital platforms, but it’s a big integration job that calls for enabling technologies too. Application programing interfaces (APIs) enable capabilities to be cobbled together in building blocks, rather like LEGO. APIs are driving the Google Venture-backed Currencycloud’s payment platform, giving companies the building blocks to create payment innovations for their clients.
Blockchain is another technology that promises to secure and democratise digital platforms, with its ability to provide an immutable ledger of public record. Its authentication of large-scale small-volume transactions appeals to entrepreneurs and social enterprises, but has not been embraced yet. “Blockchain could verify transactions between ecosystems on a digital platform,” says Mr Scheibenreif.
As with many emerging models in the digital economy, wait and see is a risky posture for large enterprises. While they sit on the fence, smaller players are jumping on to digital platforms, embracing the chance to play with the big boys.