Can you picture $1 trillion dollars? In $1 bill terms the stack of cash would stretch almost three times around the Earth’s equator. In $100 bills, it would fill 4.5 Olympic-sized swimming pools.
Now imagine how huge $100 trillion is. That is the combined value of digital transformation to society and industry that will be realized over the next 10 years. This astonishing value would be reached through the combination of digital technologies – mobile, cloud, artificial intelligence, sensors and analytics among others.
These are accelerating progress exponentially, said the World Economic Forum, but will only grow if there is collaboration between business, policymakers and NGOs. Collaboration. The trillions can only be achieved by working together in ecosystems that can leverage digital.
In the past, companies used to build a competitive advantage into their businesses to gain control of pricing power. That philosophy is changing as ecosystem-based platforms, sparked by the likes of Google and Alibaba, make a living by linking others together. Sure, some profit margins will be left on the table, and it takes a strong will to resist that initial urge to grab them. But, the benefits of the ecosystem creates a flywheel effect that propels your platform to whole new levels of revenues and margin.
The born-digital ecosystem strategy is driving a wedge between the producers and their consumers by linking them on one platform – becoming the self-declared aggregator for over a decade now – but few companies were concerned until the wake-up call that came with Covid-19.
Explicitly designed digital ecosystems
Lockdowns on the high streets cut off traditional sales channels overnight and companies started to realize how much the aggregators were benefitting from their customer relationships. They saw the real danger of no longer being in touch with their own customer base, watching as the aggregators got all the feedback – the data, the reviews, the related purchases, the profits.
How could they get their customers back? Only with explicitly designed ecosystems. And, once you add “digital” to the explicitly designed ecosystem the potential for growth is exponential – this is the $100 trillion opportunity.
But there is the danger of defining digital in the narrow sense – in other words, thinking you can just automate and integrate the interactions that are already going on. For example, by using APIs to transform your interactions electronically. The better way is to think of the ecosystem as an advanced infrastructure from production to outlets and beyond. True digital transformation not only automates, but also turns your infrastructure into an “infostructure.”
What does this mean? In the past, companies focused on production quality – as soon as the product left the shop the job was done. Little was known about – nor did they care – how the customer experienced the product through its lifecycle.
Now, with a digital ecosystem, you can extend that conversation all way to the ends of the earth. By using the latest technology – converting your infrastructure to an infostructure – you can learn what your customers do, what your customers’ customers think and what makes your partners tick.
All are deeply connected so you benefit from the data, the insights, the relationships. When your customers are part of your ecosystem, you can respond and give them the right experience, the rich interaction they desire.
The infostructure journey
By embedding sensors into your products, they will be made smart, IoT-enabled and connected – allowing you to stay in touch with the product throughout its lifecycle. Now envision the customers’ premises becoming the outpost of your organization becoming the edge as it were.
IoT edge computing will extend your territory so that you continue to own the relationship with the customer, no matter where they are. In other words, IoT integration will allow you to grow the customer experience into a connected customer experience.
But no experience stops at the edge – and the true value will come out of how your wider ecosystem partners will use the infostructure. To stand a chance, it needs to have a solid foundation in B2B integration. This means using not only the latest API integration technology, like microservices gateways, but also application and service mesh technologies, to solve complex interdependencies between those continuously evolving relationships.
Drag, drop, done
To keep up with the pace of change, these technologies need to move across to the business side, allowing them control through visual drag and drop interfaces that create the digital fabric of the ecosystem.
Technology will not be the only hurdle in the new digitally driven ecosystem economy. The approach is inherently more stressful and chaotic than more traditional approaches, and it attracts a lot of challenges.
But the prize is clear, exponential growth – tapping into the $100 trillion opportunity. The race is on to become a software-first company in a rich, bespoke digital ecosystem.
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This article was originally published in Big Data Quarterly’s Spring Issue 2021.