The Digital Platform is important for your business
The new requirements and expectations from users and businesses require us to develop and future-proof our digital platforms so we can meet these expectations and to develop our own businesses further.
One might state that many industries do not have comparable requirements to what we see in industries such as finance, entertainment or transportation. There will of course be some slowness in how industries adopt technologies, but my point is that regardless of industry, we are all retail consumers of these highly digitalized industries. We expect better user experiences, better response times and a smooth and easy life cycle of all services we use, in all aspects of life – at work as well as in our private lives. The new requirements and expectations from users and businesses require us to develop and future-proof our digital platforms so we can meet these expectations and to develop our own businesses further.
To have a sound digital platform for a business today is more critical than ever. This is because of the tight correlation between the technical capabilities of the digital platform and the business capabilities. You need a digital platform to support the business vision and goals. This implies that we need to have a digital platform to support the vision. In this article I will try to describe what a Digital Platform is and why it is so important to continuously develop the platform you have.
Digital transformation
Digital transformation is talked a lot about these days and is very important to ensure existence in the future for any business. In its essence, it is creating new income streams on new business models based on digital solutions. Services based on existing business models will often be pressed by falling margins. This means that you either need to be more cost efficient in delivering those services by digitizing and optimizing them, finding new complementary business models or even disrupt your current business models. Regardless of the path that is chosen, or paths, the business will need a digital platform that has the necessary capabilities.
Digital transformation is, in many organizations and industries, also known as digitalization. Digitization is also a term being used, but this really means converting something from analogue to digital. The latter is what we most commonly have done; moving a manual process to a process that is supported digitally by electronic forms and automated processes. Digitization is a very important step for a traditional business to succeed in. This is a way to deliver services more efficiently, but also enables a business to deliver them digitally.
Delivering value
Delivering value using the digital capabilities of the digital platform is of course the goal. Value is given when the platform enables the business to:
Deliver new or improved customer experiences and journeys – solving the customers’ “jobs to be done”
Develop new products without spending a lot of effort in technical development (programming)
Automate processes to avoid manual processing and improve efficiency of these processes
Shorten the time-to-market when releasing new products and services
To quickly test hypotheses in production
Get business intelligence, predictions and data to support the business and customer relation management
Integrate with partners and be a part of ecosystems and even be a platform for an ecosystem
Value in this context is customer value either directly or indirectly. Prioritization between projects that give direct or indirect customer value is probably the most difficult activity, but one should prioritize projects that in its core have values that retain and/or attract customers. One aspect that is easily overlooked is that it is easy to forget that building, improving and maintaining the platform is very important to keep the digital capabilities and enablers that lie therein.
The Digital Platform
The Platform term is used in many contexts within information and communications technology, and of course in other contexts as well. The Internet itself is a platform, a platform for communication. On top of the Internet-platform, platforms for e.g. e-mail and web have been built.
But what is a digital platform in the context of this article? It is not a single system or application, but the sum of all applications, core system, components, integration engine, infrastructure and platform services that support the business models of a company. This sum then represents the digital platform, the technical capabilities therein and thereby also many of the company’s business capabilities. The figure below depicts a conceptual presentation of a digital platform with its capabilities. These capabilities are not exposed directly to partners or the outside, unless done so through APIs (Application Programming Interfaces is a way for systems to communicate with each other) or other means of integrations.
The platform enables a business to deliver new customer experiences and journeys, products, services, automated processes, improving time-to-market and testing out new business models and products in a timely manner.
But creating such a platform isn’t straight forward, and it is impossible to buy a platform that fits your organization perfectly. The digital platform must be developed and tailor-made, but a couple of difficult questions arise that must be addressed. Where should we start? Which capabilities are most important to deliver customer value? How do we measure the success of these different initiatives?
Important characteristics of the platform
The digital platform must have some important characteristics to be viable on a long-term basis for the business. These characteristics are both in terms of how the business can evolve on the platform, but also technical maintainability over time.
The platform must be flexible, maintainable and easy to adapt to new business cases and business models
The cost of doing transactions must be low, especially in high volume-based industries
The platform must enable low response times and in general a good performance – this is tightly coupled to the user experience
The components and systems being used in the platform should be loosely coupled – this enables the exchange to new components, better load balancing of load and better fault tolerance
The underlying platform must be carefully evaluated and selected – it must be a viable choice for the future. E.g. selecting a cloud platform that has a good and growing range of platform services, evaluate open source versus closed etc.
Mainstream technologies are easier to get resources for than niche technologies – this should be considered when selecting platform technologies and setting competence requirements
The platform must support end-to-end process automation and workflow support
The most successful services that are launched today are usually based on real-time support. The platform should there for support real-time events and notifications. An Event Driven Architecture is also highly recommended.
It must be easy for partners to integrate with your platform and for your platform to integrate with others based on standard and open protocols. Good APIs and a good integration engine is of essence to achieve this.
Conclusion
Maybe the most important point to take away from this is that there is a tight correlation between the business capabilities you can expect to build and develop on top of your platform, and the technical capabilities of your digital platform. A business must invest in these capabilities to future-proof their digital existence – and therefore their existence.