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

When everything is about platforms and platforms are about everything

vttblog_kaisa_still_marko_seppanen_katri_valkokari_crop

Has anyone not heard of Uber, Facebook, LinkedIn or AirBnB? That platforms are the way to be successful? Our analysis makes some of this hype visible, as it reveals many ways to describe and define the concept of platform.

There is a definite hype around platforms on-going, and many companies are building their own platforms or platform strategies to find their way for success. In our research project IPLATE, we are gearing toward understanding the competencies related to platforms, i.e. ingredients needed to build a winning cake in platform economy. We approach platforms as interactive, collaborative multisided marketplaces with possibilities of networks effects for value-creation.

In order to find the best recipes we go to explore the concept of platform – so that we can understand the resources and capabilities for success – we find that platform has been defined with multiple words. Toward addressing these complexities, we analysed 12 relevant and rather highly-cited journal articles and reports about platforms (list at the end of the blog). In these, the word “platform” was mentioned altogether 1791 times, which correspond to the average of 149 per publication (with a range of 35 to 309 per publication).

With the analysis we found 31 words that were used as a prefix to define platform and 39 words that were used after the word platform. Figure below presents the words in alphabetical order. We can see that supply-chain platform but also platform supply-chain get mentioned. Similarly, technology platform and platform technology as well as market platform and platform market were mentioned. Accordingly, both business and technology are present: the terms related to technology are highlighted in red, the ones to business in blue. The roles mentioned in this platform economy include: platform partner, platform sponsors, platform owners, platform leaders (or leader wannabes), platform entrants, and platform complementors (in green).

Figure: Summary of words describing platforms.

With this analysis, we want to highlight some of the semantics of platform from car platforms and global platforms to platform licencing and platform wars. The breadth of platform approaches is also evident in a recent HBR Insights (from April 2016), which presents 18 articles about the Platform Economy – how online marketplaces are changing the face of business.

So yes, we did find the term platform competence presented as an element of a platform. Still, more interesting and challenging is that these platform competencies should be able to support such as wide arena of platform concepts. In other words, instead of one platform cake there are many different patisseries and therefore there are also many different recipes for success in the platform economy. Moreover, as platform economy is built on network effects and calls for collaboration, companies cannot bake the cake alone.

Kaisa Still, Senior Scientist, VTT

Marko Seppänen, Associate Professor (tenure track), Tampere University of Technology

Katri Valkokari, Principal Scientist, VTT 

List of publications:

  1. Yang, C., & Jiang, S. (2006). Strategies for technology platforms. Research-Technology Management, 49(3), 48-57. (platforms mentioned 220 times)
  2. Gawer, A. (2011) What managers need to know about platforms The European Business Review, July, pp. 40-43. (73 times)
  3. Sawhney, M. S. (1998). Leveraged high-variety strategies: from portfolio thinking to platform thinking. Journal of the Academy of Marketing Science, 26(1), 54-61. (110 times)
  4. Gawer, A., & Cusumano, M. A. (2014). Industry platforms and ecosystem innovation. Journal of Product Innovation Management, 31(3), 417-433. (309 times)
  5. Parker, G. & Van Alstyne, M. W., (2014) Platform Strategy Boston U. School of Management Research Paper No. 2439323. (169 times)
  6. Gawer, A., & Cusumano, M. A. (2008). How companies become platform leaders. MIT Sloan management review, 49(2), 28. (120 times)
  7. Parker, G., & Van Alstyne, M. W. (2009). Six challenges in platform licensing and open innovation. Communications & strategies, (74), 17. (120 times)
  8. Zoric, J. (2011). Connecting business models with service platform designs: Exploiting potential of scenario modeling. Telematics and Informatics, 28(1), 40-54. (35 times)
  9. Basole, R. C., & Karla, J. (2011). On the evolution of mobile platform ecosystem structure and strategy. Business & Information Systems Engineering, 3(5), 313-322. (147 times)
  10. Smedlund, A. (2012). Value cocreation in service platform business models. Service Science, 4(1), 79-88. (123 times)
  11. Kenney, M., & Zysman, J. (2015). Choosing a future in the platform economy: the implications and consequences of digital platforms. In Kauffman Foundation New Entrepreneurial Growth Conference. (159 times)
  12. Accenture Technology Vision 2015 Stretching your boundaries in the digital era. (206 times)