Sunday, June 30, 2019

Five-Pillar Framework to Develop the Platform Business

 In order to succeed in today’s fast-changing digital business dynamic, organizations must begin thinking about ways with dynamic planning and leverage the platform approach to scale up and broaden their ecosystem impact.

The digital organization is a dynamic system which needs to continue evolving and adapting. It can expand and amplify its influence with the ability to create new business models, run a platform business in a hyperconnected digital ecosystem - treat customers, suppliers, channel partners and industrial participants as active agents who can integrate the modular capabilities exposed in a powerful platform to create new experiences and expand its impact. Here are five essential pillars to build a solid framework for developing a powerful platform business.

Architecture and process: The enterprise consists of an amalgam of socio-systems, techno-systems, bio-systems, and Econo-systems. The business architecture tends to focus on current business state evaluation, gap analysis, capability assessment, and development of the business transformation roadmap to reach a reasonable target future state. Business architecture can be very valuable for performing a wide array of additional services, including process measurement and optimization, segment analysis, strategic positioning, and a wide array of other business functions. The rapid business model innovation, emerging digital technologies, IT consumerism, and many other factors are creating new challenges and opportunities for enterprises to grow and mature. They are also affecting business capabilities in many ways including but not limited to business relationship management, brand reputation, information management, and business competencies, etc. The emerging consensus is that Business Architecture has significant impacts on both business model evolution and business alignment. By aligning the outside view with the inside view, you can understand the needs of people but also the channels needed to support them. In fact, Business Architecture is one of the essential pillars to design and manage a platform business that can respond to a dynamic ecosystem with multi-dimensional factors impacting business model, business operations, and the company reputation for the long term success.

Information & Technology: Information is one of the most invaluable business assets and technology is a critical element of business competency. Information Technology provides a nervous system to improve organizational responsiveness, intelligence, and performance. Information Technology enables the business to access, consume and generate the necessary information to perform a range of business tasks. It’s the linchpin to develop a platform business by building close business relationship across the departments and integrating multiple business functions into differentiated business competencies. IT woven-digital framework leverages emerging digital platforms and tools, practices the art and science of engineering disciplines, and develops IT applications blended with current digital trends to deliver unique benefits to the business. IT-enabled full business potential is about getting involved in building great products, services or business models by relying less on silo functions and more on cross-functional collaboration and cohesive business competency Information Technology provides an important structure and a strong pillar to build a powerful platform business.

People & Culture: People are always the most critical business asset and human capital investment to catalyze business transformation and drive long term business advantage. The part of the building a platform business is to achieve people-centricity by solving customers’ problems and unleashing employees’ potential. Effective workforce management focuses on attraction, engagement and performance alignment. The traditional “command & control” style of management gradually lose its steam, the highly effective digital workplace is where collaboration and sharing are the norms, helps people at all levels within an organization to identify and develop their creative capacity and motivates them to think and do things differently. Regardless of the nature of the organization, you will also find some similarities in culture such as strong vision and leadership, outward-looking rather than insular. willing to accept a degree of risk and experimentation, etc. These forward-thinking businesses provide excellent platforms for people to explore who they are, keep their creative energy flow and then, align the energy to work at hand and inspire creativity. People-centricity is actually the very purpose of running a platform business.

Principles and Practices: The digital principles are not some out-of-date cliche or overly rigid processes to stifle innovation. Instead, they are based on the set of digital philosophy behind the methodologies and they help to shape the digital fit mindsets behind decisions, behaviors, and actions at all levels of the organizational hierarchy. Every company should also strive to explore "best practices" throughout their organization to either scale up innovation or accelerate performance. But the business management needs to keep in mind that "one size doesn't fit all". Markets change and shift, and for each company attempting to deal with these changes, there is a different path to follow. By striking the right balance of the best and next practices, setting the right principles but breaking down the old rule; the business lifecycle could be viewed as resulting in emergent means of reorganizing, refocusing, rebalancing resources, and redirecting people to understand the whole, in terms of its inner processes and strength, its interactions with external systems, its components, the specific interaction among them, etc., to build a powerful platform business with seamless digital flow and accelerated business performance collaboratively.

Governance & Risk Management: If a modern organization is like a vehicle, then, governance is like a steering wheel; risk management is like a brake pad and compliance is like the set of traffic rules. Thus, the purpose of GRC is not to stop the business vehicle, but to ensure it is driven smoothly with the safety control. This is particularly important to operate a large-scale platform business. In reality, though governance is one of those concepts that have received lots of “lip service.” The factors of governance effectiveness include - the organization’s risk appetite, regulatory environment, the business nature, size, and stage in the lifecycle, market environments, and current conditions, the Board's attitude to risk and reward, core business systems lifecycle, or the maturity of the Information Systems team & processes. The thing that the management would like to see is how the implementation of the strategy proposed will affect the existing business processes, roles, and responsibilities, and how much it will cost to change the processes in order to establish good governance and risk management discipline, and of course, what exact benefits it will bring to the business at the end. It doesn’t matter what the drive is, in a well aligned and architected organization, governance must be assessed at the enterprise level and managed holistically because it’s one of the most critical pillars to run a platform business.

Nowadays things are interconnected and the business ecosystem becomes highly interdependent nonlinear, complex, and dynamic. In order to succeed in today’s fast-changing digital business dynamic, organizations must begin thinking about ways with dynamic planning and leverage the platform approach to scale up, broaden their ecosystem impact and increase revenue streams, in order to harness the power of ecosystems, unlock business performance, and enforce people centricity.