Platforms are becoming the “de facto” operating model of many companies that are transitioning from a traditional mass customer approach to targeting customer networks. While every company is at a different stage in its transformation journey, the market is constantly evolving, and new entrants are launching digitally-native businesses that offer better value at lower prices. Finding a way to quickly adapt, innovate and scale will give businesses a competitive edge to evolve, retain market share and accelerate their resilience.
Pay for consumption services have triggered a wave of start-ups in virtually every industry the same way “no frills” airlines disrupted the travel industry. Building a business powered by the most up-to-date technologies makes them much more efficient and flexible in establishing and expanding their customer reach and launching new services. A key element of their models is the adoption of cloud technology, platforms and managed services for specific business functions (e.g., IT, marketing).
This puts incumbents up against tough competition from these new entrants that target customer networks with more relevant content and offer better engagement, experience and support. While this may not have led to a significant drop in turnover for market leaders (which were therefore reluctant to make changes to their operational model), the pandemic has dramatically highlighted discrepancies in many players’ resilience and responsiveness to new circumstances. The incentive to invest in cloud services and “go digital” is more compelling than ever.
Digital transformation drivers, objectives and challenges
For virtually all of today’s businesses, digital transformation is an absolute must. Whether the priority is cutting costs, speeding up the time-to-market or launching new products, how efficient you make the execution will have a significant impact on achievable results.
According to a recent study by HCL, customers invest in digital transformation to:
- Improve the customer experience
- Increase operational efficiency
- Create new business
Each business has to choose its own methods and timelines when it comes to meeting those objectives. The pandemic has changed the game and forced many companies to speed up the pace of change to stay in business. This has given rise to challenges in terms of resources/know-how, compliance with local regulations, security and scalability that are prolonging the transformation timeline.
For example, low-code/no-code platforms allow business users to create and distribute simple apps with no coding experience, but they may not have access to every data source or the deeper expertise required for more complex apps. Legacy backends are not set up to package data for easy consumption, and they require dedicated connectors and skills. So, what can organizations do to leverage the full potential of their solutions, drive faster adoption, seamlessly use the Cloud and generate profit?
The age of assistance for B2B
In the so-called age of assistance, businesses are looking for ways to offer their customers superior experiences and to put customer interests at the core of what they do (i.e., assist them). What if companies themselves obtained assistance in terms of simplifying, scaling and accelerating their mission as well? Companies have created a huge range of assets (e.g., APIs, business logic, containers, AI models) that they want to adopt and/or monetize more broadly. One way of doing this could be to create solutions (e.g., developer portals or a marketplace) that facilitate access, re-use and billability of assets between divisions and other third parties. This approach gives companies more flexibility, while also typically requiring dedicated resources to manage the transformation.
By contrast, companies that do not have the time, resources or budget to manage the migration on their own could use a service (e.g., SaaS, managed service) offered by an aggregator through a platform. They simply upload their assets and receive assistance in:
- creating new MVPs, products
- leveraging the power and scalability of a secure cloud infrastructure
- managing APIs and API products
- controlling access to the assets, data security, etc.
- searching, listing and monetizing assets
- accessing assets from other companies
A platform can streamline and facilitate adoption while providing data to demonstrate compliance with local/industry requirements as well as providing controlled access to resources, data separation/integrity, a catalog of assets to be (re-)used and a community to foster innovation.
There are some clear advantages to participating in such a platform compared with in-house development:
- shorter time-to-market (or to production)
- risk delegation for the availability and security of the underlying infrastructure
- dynamic and immediate expansion capabilities (e.g., tailored use of resources)
- limited need of in-house skills to create new value
- better cost planning (typically multiple plans are available)
- support of SMEs/expert team
- structured approach to sharing, scaling and monetizing assets
While it may not be an organization’s long-term goal, becoming more agile and responsive to market dynamics makes the platform option quite appealing, especially in uncertain times like the recent pandemic. A company can activate or cancel each service based on actual demand, and there is no need to budget for resources, skills, processes or solutions that are time consuming, costly and may ultimately fail to meet all the original expectations.
Market dynamics are pushing companies to change at a faster pace and make their digital assets available to third parties to create new revenue streams. While they may want to produce the core building blocks (e.g., APIs, AI models, business logic) in-house, companies should consider joining a platform to accelerate their ability to scale, innovate and be sustainable (asset reuse) as opposed to building custom processes and services to meet these objectives.
The author: Anna Marino is Head of Partners and Alliances for Business Application Platform at Google Cloud. With over 22 years of experience in the IT industry, she has held leading positions in large corporations, serving customers across all industries and enabling business growth through the adoption of technology. Anna Marino is currently focused on helping companies lead in their industries by creating new business models, increasing agility and leveraging the “digital era” as well as cloud solutions to better compete.