Wednesday, February 27, 2013

The Digital Ecosystem is Beyond a Business Buzzword

A business ecosystem is just like the natural ecosystem, first, needs to be understood, then, needs to be well planned, and also needs to be thoughtfully renewed as well.

Due to accelerated changes and digital disruptions, organizations today need to behave as organisms living within ecosystems. An organism is an assembly of systems working together as a whole, often thought of as a self-organizing being, to react in a controlled, agile, and measured way. Therefore, mastering the business ecosystem is more crucial than ever.

1. Management Ecosystem 

The ecosystem is controlled by both internal and external factors, the principles of ecosystem management suggest that rather than managing individual pieces, resources should be managed at the level of the ecosystem itself.

  • Dynamic Ecosystem: Management systems and processes are gradually moving away from a static, unidirectional, and time-bound avatar to a more dynamic, continuous, and interactive state, such dynamic ecosystem explicitly seeks to create agile environment where people can grow, and business focus on dynamic resources, long-term perspective, scalable performance, and harmonized relationship. 
  • Dynamic leaders to adapt to the digital ecosystem: When organizations orchestrate a broader ecosystem beyond functional or business borders, culture clash as much more different management styles are required to move to higher-performing dynamic ecosystems. The dynamic leaders can bridge the difference and connect the dots, more tolerate ambiguity and uncertainty, such open leadership inspires the democratic culture, collective wisdom, and analytic decision process.  
  • Purposively plan the ecosystem: Companies operate within ecosystems to deliver value to their customers, however, for many, the ecosystems have evolved without much attention or planning. To effectively respond to these new dynamics, companies must begin thinking about ways to broaden their ecosystems and revenue streams while becoming more responsive and agile. 

2. Digital Ecosystem 

Today’s business leaders are capitalizing and operating on digital ecosystems that are expanding due to the confluence of social networks, mobile computing, analytics, and cloud computing (SMAC). SMAC also provides unprecedented opportunities for enterprises to take advantage of digital disruptions.

  • Multi-Industrial Collaboration: Instead of being rigidly grouped around a specific business, ecosystems draw together mutually supportive companies from multiple industries that collectively seek to create differentiated offerings and capture value they could not reach alone. Many companies have never been better positioned to engage in multi-industry collaborations. But few have broken out of the static industry box. 
  • Companies need new ecosystem partners to pursue benefit: Understand the competitive landscape, find partners that can help the business succeed, and demonstrate benefits to the entrepreneurial ecosystem in ways that might have happened in the past but at a much faster rate with much broader impact at the digital era. 
  • The ecosystem alignment: Align the different parts of the ecosystem to adopt more points of integration and incorporate the use of "stacks"— modular, layered, industrial designs topped by a peering community with the digital infrastructure, loosely coupled modular capabilities—Internal capabilities and processes are broken into modular service components that have standard open interfaces. Loose coupling makes it possible to change the components without affecting the system, as long as the interface is kept stable.

3. The innovation ecosystem 

Information systems play a fundamental role in deploying and operating these new ecosystems. An open information platform enables companies to integrate the critical components of a smart platform, which is “open” not only because it allows information exchange and participant involvement but also because it ensures that interdependencies and loyalties between partners are taken into account and build up a strong innovation engine.

  • Industry experts identify four evolutionary ecosystem stages: pioneering, when the basic paradigm of the ecosystem is being worked out; expansion, when the community broadens its scope and consumes resources of all types; authority, when the community architecture becomes stable and competition for leadership and profits within the ecosystem gets brutal; and renewal, when continuing innovation must take place for the community to thrive.
  • The ability to co-create in a digital ecosystem: A co-creation strategy treats customers, channel partners, suppliers, and industry ecosystem participants as active agents who have permission to combine the modular capabilities exposed in a platform to create new experiences. Talent-empowered organizations also embed the multiplier mindset and best practices into their strategies, processes, operations, and governance, talent multiplication moves from a key competitive mindset to an important and distinctive source of competitive advantage-Innovation capability.
  • Emerging markets offer particularly fertile ground for developing cross-industry ecosystems and innovation opportunities: It is in part because ways of doing business and customer expectations both tend to be more flexible than those in the developed economy, companies need new ecosystem partners to pursue them. Today’s technology enables companies to leverage their various environments, or ecosystems, to chase innovation and accelerate performance.
Therefore, in order to succeed in today’s fast-changing business world, harnessing the power of ecosystems is critical. Are businesses at the tipping point to embrace a sociological, digital and global ecosystem yet?


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