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

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