In part one of this blog series, we examined what Digital Reinvention is, what’s driving it, and the importance of proactively changing an organization’s business model. In part two, we delved into two key changes required to successfully compete in the digital ecosystem. In this blog post, we’ll explore the emerging digital ecosystem and what it might herald for current organizations.
Defining Digital Ecosystems
Gartner describes the Digital Ecosystem as “an interdependent group of enterprises, people and/or things that share standardized digital platforms for a mutually beneficial purpose, such as commercial gain, innovation or common interest. Digital ecosystems enable you to interact with customers, partners, adjacent industries ‒ and even your competition.” Participating in these ecosystems is a key indicator of an organization’s success. According to the 2017 CIO Agenda report, 79 percent of the highest performing digital organizations participate in a digital ecosystem. Conversely, less than 50 percent of mean performers participate.
Establishing a Digital Ecosystem
When creating a digital ecosystem, there are three key aspects to establish and one area of concern to address.
First, it’s vital to clearly and specifically define goals for each participating member. Defining these goals from the outset ensures that the ecosystem will be beneficial for all involved.
Next, ensure that the customer experience is at the forefront – and determine how the partnership will provide what the customers need. By partnering with companies who complement their customer offering, organizations can enhance the customer journey.
Third, standardize and streamline platform and data sharing. It’s crucial to be able to collaborate with ecosystem partners and having intelligence operations facilitate that process. Additionally, organizations can leverage additional learnings from their collaborator’s customer data.
This raises a potential pitfall, however: IP security. While data sharing and collaboration is important in achieving synergy with digital ecosystem partners, companies must remain vigilant to protect their inherent competitive advantage.
Benefits of Digital Ecosystems
Establishing, or joining, a digital ecosystem will allow organizations to compete in the digital marketplace. This is increasingly important, as industry lines blur and converge. By 2025, McKinsey predicts there will be only 12 major ecosystems within which each company will be contained, and legacy companies that don’t adapt will be left behind.
Companies that become customer-centric and employ agile internal operations can be proactive, not reactive, to the new digital marketplace. They will identify new business moments and opportunities by deeply understanding their consumer’s needs, which will, in turn, allow them to optimize for new customer journeys and improve internal efficiency.
Bringing it all Together
Throughout this series, we’ve established that organizations must proactively undergo a digital reinvention to survive. We’ve examined the key changes required to successfully complete that adaptation, and we’ve explored the emerging digital ecosystems.
Digital reinvention is a daunting task, but not an optional one. The pace of innovation is quickening, and by the time organizations notice their competition it’s too late to adjust. The most successful companies today have embraced the digital marketplace: placing their customers at the heart of their organization and developing intelligent operations.
Making these changes will allow your company to not just survive the digital revolution, but to thrive within it.