Business out of data in urban environments

The role of local authorities and cities is undergoing a transformation, and it is becoming more common to regard them as service platforms. One enabler of such development is a transfer from closed to open systems, but also new modes of operation, such as the city as a platform thinking included in the Smart Tampere ecosystem, contribute to this.

It is possible to collect a lot of electronic data on the behaviour and needs of municipal residents. Using artificial intelligence (AI) or augmented reality (AR) tools, such data can be utilised in decision-making and the development of new services. With the help of refined data, the future service needs of municipal residents can be predicted, and services can be personified according to different life situations. When someone is moving, AI can automatically recommend him or her the best residential area and suitable day care centres with openings, or suggest the most sensible jobs etc. in accordance with the user’s personal interests. Cities know their residents increasingly well, and the data offers huge opportunities for different stakeholders to provide new services.

However, enterprises have been slower to seize the opportunities offered by open data than expected. The user data is dispersed between various public and private digital sources, and the creation of major data-based business would require integration of data from several sources. In other words, ground rules and bold initiatives for sharing data are also needed between operators. The creation of new data-based business activities requires examining services from the viewpoint of municipal residents instead of using the data sources as the starting point for service development. Turku with its ‘circular economy of data’ project and Forum Virium Helsinki, with user-oriented open innovation as its mode of operation, are excellent examples of trendsetters.

Use of open data from various sources in applications and services

Open data can be used in different service contexts. Most examples of such applications can be found in financial and taxation services, such as Budjettipeli budget game, with the help of which you can test different models for sharing the financing burden of welfare services between public communities and private citizens. It is based on the data resources of Statistics Finland, the National Institute for Health and Welfare and the Finnish Centre for Pensions. A lot of examples can also be found in map applications, such as the online and mobile service Aaltopoiju, which offers boaters and free-time seafarers exact observation and forecast data on different weather phenomena, such as water level and wave height. Aaltopoiju uses the open data material produced by the meteorological institutes of Finland, Estonia, Sweden and Germany.

The success factors of a business process based on open data

With a view to making business, it is important that applications based on open data have easy-to-use user and customer interfaces. The integration of data and information systems plays a key role in how utilizable the data is. Technological solutions must support the usability of the application. In addition, securing the information security of individuals is a prerequisite for creating profitable business out of open data. When collecting and using personal data of municipal residents, the delicate nature of such data must be taken into account in every stage of the data process.

Below, as an example, we have listed data initiatives related to parking and traffic, including light traffic, that are being planned, in progress or in their final stages in various cities. In the services of Helsinki Region Transport (HRT), the current issues include starting the operation of Länsimetro and the relevant changes, whereas in Tampere the construction of a tramline reforms the transport structure in the Pirkanmaa area and business activities related to that. Identifying the critical missing pieces in services from the point of view of those moving in city areas can serve as a basis when planning new data initiatives. This enables more efficient creation of new, data-based business operations.

tampere_smartcity  

Customer-oriented and comprehensive service solutions

In urban environments, services utilising open data must be based on the customers’ needs, and not only on the needs of individual data-based services. There is already a lot of data available from various sources, but identifying the critical missing data and its open provision may create new value-creation opportunities. Accumulation of data in the various phases of the use of services and business process may create new opportunities, when we learn to refine them to usable form. Therefore, the roles required for the analysis and utilisation of data (e.g. technical implementation and final use) and the operators in a comprehensive ecosystem must be identified to enable value-creation for the final user. It is also important to collect feedback on the use of applications to develop the services.


Antti Ruuska
Business Development Manager, VTT
antti.ruuska(a)vtt.fi
Twitter: @antti_ruuska

Salla Paajanen
Research Scientist, VTT
salla.paajanen(a)vtt.fi
@PaajanenSalla

Katri Valkokari
Research Manager, VTT
katri.valkokari(a)vtt.fi
@valkatti

Antti Knuuti
Key Account Manager, VTT
antti.knuuti(a)vtt.fi

If you want to read more about VTT’s vision regarding smart and sustainable cities, read our new white paper: Let’s turn your Smart City vision into reality. Smart City development is inherently multi-technological and cross-disciplinary, and as an application-oriented research organisation VTT is an ideal partner. We work with the public sector and private companies as well as technology providers in research and innovation activities that expedites the development of smarter cities.  We can guide you from the early phases of vision-creation and concept development to practical implementations of smart outcomes.

Suomesta alustatalouden globaali veturi – Suomi2.0

Alustatalous, ekosysteemi, MyData, tekoäly, data, Suomi2.0… siis mitä, häh?

Alustatalous tarkoittaa uutta talouden alaa, jossa yritys tarjoaa teknologisen alustan, jonka päälle yritykset, yksityishenkilöt tai yhteisöt voivat luoda jotain, joka tuottaa lisäarvoa. Hyvä esimerkki on Airbnb (https://www.airbnb.fi/), jonka alustaa hyödyntämällä tavalliset ihmiset voivat vuokrata omaa kotiaan. Uber (https://www.uber.com/fi/) tarjoaa alustan, jossa auton omistaja voi tarjota kyydityspalveluita muille ihmisille. Alustan käyttäjät muodostavat teknologisen alustan päälle ekosysteemin eli yhteisön, joka hyödyntää alustaa.

Suomi on linjannut tavoitteekseen lähteä vetämään globaalia alustataloutta. Suomella on hyvät edellytykset nousta alustatalouden veturiksi. Meillä on erinomaista esineiden internet (IoT) -osaamista, sekä 5G-teknologiassa olemme edelläkävijöitä. MyData (https://julkaisut.valtioneuvosto.fi/handle/10024/78439) -konsepti ollaan viemässä ensimmäisenä maailmassa käytäntöön Suomessa. Suomessa on myös poikkeuksellisen pitkiä aikasarjoja terveysdataa, sekä korkeasti koulutettu hieman teknologiaan vinossa oleva kansa. Niinhän se Linux-käyttöjärjestelmäkin syntyi Suomesta. Luodaan yhdessä teknologiamyönteinen alusta nimeltä Suomi2.0, jonka päälle syntyy vahvojen teknologisten alustojen ekosysteemi.

On todella mielenkiintoista seurata, kun maailma ja nyt myös Suomi kääntyvät suuntaan, johon me olemme jo pitkään kulkeneet. VTT:llä on muun muassa Otaniemen alueella mm. energia-, rakennusautomaatio- ja  sähkönkulutus -dataa keräävä alusta, jota vahvistetaan meneillään olevassa Otaniemi Smart Energy Pilot Platform (https://tapahtumat.tekes.fi/uploads/af21d1105/Reboot_workshop_slides_Smart_energy_pilot_platform_public-3566.pdf) -projektissa. Olemme myös mukana vahvistamassa useiden suomalaisten kaupunkien alustoja. Suurin osa tulevaisuuden alustoista, datalähteistä ja sensoreista keskittyykin kaupunkeihin, joten kaupungit muuttuvat eturintamassa digitaalisiksi ympäristöiksi. Näin ollen tulevaisuuden suomalaiset digitaaliset älykaupungit luovat meille suomalaisille alustan, jonka päälle voimme alkaa rakentamaan vahvaa tekoälyä – auttamaan meitä ihmisiä.

Seuraavassa blogikirjoituksessa paneudun tulevaisuuden alustatalouden yhteen tärkeään teknologiaan, eli lohkoketjuteknologiaan. On mahdollista, että lohkoketjuteknologian päälle rakentuu tulevaisuuden Googlet, Facebookit ja Amazonit – mieluiten Suomeen.

 

mikko_tuomisto

Mikko Tuomisto
Research scientist, Interactive Buildings
@MikkoTuomisto
@digimurros

(kuva: Timo Riihimäki)

Platforms do not appear from thin air!

Towards new radical business opportunities: There is no single journey towards success in digital platforms– there are many ways to do it!

In the core of platforms are the products and services that link the actors together toward seamless experiences. This seamless service experience generates data from users, which can create new business opportunities for the platform owner or its partners when shared, integrated and analyzed.  Over boundaries of several platforms and their digital interactions, there is more data– wide data– allowing for integrating variety knowledge. And the sought-after, radically new business opportunities lie at the intersection of different data sets and sources. This is the plan, right? But how to get there?

Digital platforms are places for digital interactions where there are different value-creating building blocks.  These building blocks need to work together! So-called boundary resources need to allow for seamless technical and cooperative collaboration. For example, if your seamless customer experience benefits from microservices, those need to be accessible via APIs (application programming interfaces) that can function with your APIs.

checklist_platformeconomy_VTT
If you have not explored the importance of interactions and boundary resources in your organization, the check‐list based on the insight of academic, industry and other stakeholders can be a first step for you!

More details about it can be found: http://tutcris.tut.fi/

We all have to understand that the logic of the game has changed, and that all actors can’t be platform owners or providers. There is no single journey towards success in digital platforms– there are many ways to do it!

 

See also our previous posts on platforms:

The platform ecosystem canvas defining the core elements of new economy

Openness is the key to the platform economy

When everything is about platforms and platforms are about everything

Katri Valkokari
Katri Valkokari
Research Manager, VTT
katri.valkokari(a)vtt.fi
@valkatti

 

marko-seppänen-3
Marko Seppänen
Professor, TUT
marko.seppanen(a)tut.fi
@DrSeppanen

 

kaisastill
Kaisa Still
Senior Scientist, VTT
kaisa.still(a)vtt.fi

Alustat eivät ilmesty tyhjästä!

Kohti uusia ja radikaaleja liiketoimintamahdollisuuksia digitaalisilla alustoilla: Ei ole olemassa yhtä ainoaa tietä menestykseen vaan reittejä on monia!

Alustojen ytimestä löytyvät tuotteet ja palvelut, jotka liittävät toimijat yhteen – kohti saumattomia asiakaskokemuksia. Nämä saumattomat palvelukokemukset tuottavat tietoa, joka voi jaettuna, integroituna, tai analysoituna luoda uusia liiketoimintamahdollisuuksia alustan omistajalle ja liiketoimintakumppaneille.  Useiden alustojen ja niiden digitaalisen vuorovaikutuksen rajoja ylitettäessä syntyy lisää tietoa – laajaa dataa – joka mahdollistaa monimuotoisen tiedon integroimisen. Haluamamme radikaalisti uudenlaiset liiketoimintamahdollisuudet odottavat eri tietoaineistojen ja tietolähteiden yhtymäkohdassa. Mutta kuinka tavoitteeseen päästään?

Digitaaliset alustat ovat paikkoja digitaaliselle kanssakäymiselle ja ne koostuvat erilaisista arvoa tuottavista rakennuspalikoista.  Näiden rakennuspalikoiden on toimittava yhdessä! Niin kutsuttujen rajaresurssien täytyy mahdollistaa saumaton tekninen ja yhteistoiminnallinen vuorovaikutus. Jos siis tarjoamasi saumaton asiakaskokemus hyötyisi täydentävistä mikropalveluista (microservices), niin niiden tulee olla käytettävissä ratkaisuunne yhteensopivien ohjelmointirajapintojen (API) kautta.

Tarkistuslista

Jos et ole tutustunut alustaratkaisujen vuorovaikutuksen ja rajaresurssien tärkeyteen, ota ensimmäinen askel oheisen tarkistuslistan avulla! Se perustuu tutkimustyöhön, teollisuuden ja muiden sidosryhmien näkemyksiin ja kokemuksiin sekä Suomessa että muualla.

  • Mikä on se ongelma, jota olette ratkaisemassa alustoilla?
  • Millaiseen vuorovaikutukseen haluatte osallistua?
  • Mikä on vahvuutenne?
  • Oletteko valmiita globaaliin toimintaan?
  • Missä kohtaa digitaalista evoluutiota olette tällä hetkellä?
  • Oletteko määritelleet tekniset ja yhteistoiminnalliset resurssinne?
  • Miten osaatte tarttua ohjelmointirajapintojen tarjoamiin liiketoimintamahdollisuuksiin?
  • Miten osaatte tukea ei-teknisiä rajaresursseja?
  • Mikä on skaalattavuustavoitteenne?
  • Onko teiltä datastrategia?
  • Millainen on alustanne ekosysteemi?
  • Millainen toimija haluatte olla perustuen resursseihinne ja verkostoasemaanne?
  • Oletteko miettineet asemaanne alustaekosysteemissä?
  • Tiedättekö mistä lähteä liikkeelle – ja kuinka edetä?

Lisätietoa aiheesta löytyy julkaisusta: Platform Economy Interactions & Boundary Resources

Ajattelun muutos

Digitaalisten alustojen myötä pelin logiikka on muuttunut, eivätkä kaikki toimijat voi omistaa tai tarjota alustoja. Ei siis ole olemassa yhtä ainoaa tietä menestykseen!

Tutustu myös aiempiin alustoja koskeviin postauksiin:

Alustaekosysteemi määrittelee uuden talouden keskeiset tekijät

Avoimuus on avain alustatalouteen

Kaikki liittyy alustoihin – ja alustat kaikkeen

 

Katri Valkokari
Katri Valkokari
Tutkimuspäällikkö, VTT
katri.valkokari(a)vtt.fi

 

marko-seppänen-3
Marko Seppänen
Professori, TUT
marko.seppanen(a)tut.fi

 

vttblog_kaisa_still_marko_seppanen_katri_valkokari_crop
Kaisa Still
Erikoistutkija, VTT
kaisa.still(a)vtt.fi

The platform ecosystem canvas defining the core elements of new economy

Google, Facebook, Amazon, Apple and many more. The success of platform owner companies has created the hype around the concept. It is often forgotten that the platform owners are not doing the business alone.

The new platform economy is based on interaction of many involved actors. Platforms will give companies new opportunities by changing how they interact with each other, oftentimes also disrupting the traditional business rules. Therefore, configuration of platform ecosystem is one of the key tasks in a platform economy.

How to support identification and understanding of a win-win-win model that is beneficial for all platform ecosystem actors? Based on the broad literature review (Sorri et al. 2016), we have built a platform canvas with eight key elements describing the critical characteristics (see Figure below).

Platform ecosystem canvas

Figure. Platform ecosystem canvas.

To create the integral interactions, a platform needs to attract, involve and interconnect value creators on both the supply and demand sides. The core three elements – value and participants including both users and producers – describe the most important activity of the platform: the core interaction. Each and every interaction in a platform starts from co-creating value, and the platform has to manage the exchange of value by using the filters. In digital platforms the filtering is typically based on algorithms. Those software-based tools enable the proper and relevant fit of the exchange between producers and users.

After understanding the core interaction and the value the participants need or want to exchange, it is relatively easy to define the key enablers of platforms’ network effects. To put it short, direct network effects explain how a platform attracts others to participate whereas indirect network effects arise from attracting others to contribute to in value creation. Then, technical and co-operative resources are closely linked to network effects as they set the rules of participating and sharing within the platform. At the same time, overall governance practices define in more detail how the collaboration within the ecosystem is orchestrated. Open interfaces and integrated filtering of data can enable network effects and create new interaction, which may not be directly controlled by the platform owner.

Finally, the last and crucial element is the value capture, i.e. monetizing as it a critical question from the viewpoint of business model. At the moment, most of the platforms have rather traditional earning logics such as subscription or transaction based models. The transparency in benefit sharing is critical, although the earnings within the platform economy are not or neither will always being shared equally. Each actor should take account of this in their business model.

The canvas is intended to be used in guiding the platform ecosystem participants – platform owners, complementors, infrastructure and service providers – through eight key elements, ensuring reviews of all critical perspectives. The platform canvas helps to challenge the platform by opening their thinking towards multi-dimensional value co-creation between ecosystem members. We have tested with seven industrial case companies, and based on their feedback, it was viewed useful for business managers’ in their platform based business model innovation.

See also our previous posts on platforms:

Openness is the key to the platform economy

When everything is about platforms and platforms are about everything

vttblog_kaisa_still_marko_seppanen_katri_valkokari_crop

Krista Sorri TUT

Kaisa Still, Senior Scientist, VTT

Marko Seppänen, Professor, Tampere University of Technology
Twitter @DrSeppanen

Katri Valkokari, Principal Scientist, VTT
Twitter @valkatti

Krista Sorri, Project Researcher, Tampere University of Technology

Openness is the key to the platform economy

The platform economy is based on interaction, and calls for the sharing of the co-created value. Openness and interface transparency are at the core of a successful platform economy.

platformeconomy

Ecosystems and platforms continue to triumph: while integrating users, service providers, producers and complementors they are blurring traditional industry boundaries. The examples of Apple and Airbnb demonstrate how digital platforms cross sectoral boundaries and traditional controlled market mechanisms. Such platforms are also enabling global connections and interoperability.

Digital platforms provide greater accessibility, speed, efficiency – and sometimes an improved user experience, service and greater convenience compared to existing ones. In value creation, there is a shift towards networked structures crossing organisational and industry boundaries, enabling new kinds of business models in place of traditional value chain structures.

Value is created through interaction, but are the benefits shared?

It is often forgotten that the platform economy is based on interaction of many. Still, the focus is often on the single entity of the platform owner. This so-called platform company manages the key platform components (both the technology processing the data and the business logic built on this). Most examples suggest that it also takes the lion’s share of the revenue (see Harvard Business Review: What Airbnb, Uber, and Alibaba Have in Common). The ‘winner takes all’ thinking has encouraged many companies around the world to develop their own platforms.

As a result, many platform companies have created new kinds of ground rules and integrating services that combine, analyse and interpret the information passing through the platform – while highlighting the benefits of the platform company. Unfortunately, though the value of each platform depends on the participation of partners, in many cases these so-called boundary resources are not genuinely open. According to a recent study by ETLA (The Research Institute of The Finnish Economy), out of a sample of 51 companies none had published their­ collaborative or technical boundary resources.  (See: ETLA, “The lack of boundaries resources hinders the growth of industrial internet”, in Finnish.)

The new type of value creation is based on joint activities within the ecosystem formed by a set of actors, with the provision of suitably filtered data and value for various users. This means that a company providing individual services that are seamlessly connected to the creation of customer value and to a platform, can win in the platform economy.

Towards transparent value sharing

To create the integral interactions, a platform needs to attract, involve and interconnect value creators on both the supply and demand sides. Open interfaces and integrated data create new interaction, which is not directly controlled by a single actor, such as a platform owner.

The greatest change needs to take place in our way of thinking: success in the platform economy will mean taking account of the perspectives of network actors – often several players – and openly building participation opportunities. Openly laying out the benefits and investments involved for all parties would provide a starting point for understanding the functioning and dynamics of interaction within an ecosystem. This would enable the mobilisation and compatibility of everyone’s resources and expertise – while meeting the customer’s needs.

Therefore, a win-win-win model, beneficial for all ecosystem actors, and replacing the “winner takes it all”- model, requires transparency in value sharing, as well as a change of mindset. This applies to both direct and indirect benefits. The benefits of the platform economy are not or neither will always being shared fifty-fifty. Each actor should take account of this in their business model. Thus, openness is the key to the platform economy – in which there can be multiple winners.

vttblog_kaisa_still_marko_seppanen_katri_valkokari_crop

Kaisa Still, Senior Scientist, VTT

Marko Seppänen, Professor, Tampere University of Technology
Twitter @DrSeppanen

Katri Valkokari, Principal Scientist, VTT
Twitter @valkatti