Many companies, whether they realize it or
not, have already taken steps to embed themselves into the digital ecosystems
that will drive their growth in future. However, the pace of adopting new digital
platforms for doing business needs to increase – especially in Africa. These
platforms are business models that create value by facilitating exchanges
between two or more interdependent groups, usually consumers and producers.
According to the Wall
Street Journal platform companies are
major drivers of innovation as the top companies set the standards for the
digital transformation taking place around the world. Traditional companies are
challenged to keep up or risk being left behind. As platforms become the new
normal for how business is done, African companies must seize this opportunity
to begin to build a new digital value chain.
Already, more than a quarter (27%) of the
executives Accenture
recently surveyed report that digital
ecosystems are transforming the way their organizations deliver value. And we
found that 81% of executives say platform-based business models will be core to
their growth strategy within three years.
The mandate for leaders is to
capitalize on new relationships, building a network of digital partners that
will not only enhance their existing business, but also allow them to forge
their way into newly emerging digital ecosystems.
What we are seeing is that entire ecosystems
of customers are aggregating around several new digital platforms, and
businesses are more motivated than ever before to take advantage of these entry
points.
Communication platforms like WeChat and WhatsApp, and Artificial
Intelligence intermediaries like the Google Assistant, Alexa, and Siri
represent distinct ecosystems delivering unprecedented access to customers –
and businesses are flocking to them. A couple of examples include Hyatt Hotels,
which uses Facebook Messenger to let guests do everything from booking and
checking existing reservations to ordering room service during a stay, while
Capital One bank developed a ‘skill’ for Amazon Echo’s Alexa, allowing people
to check their accounts and pay credit card bills via the Echo device.
It is little surprise that the trend
two of our Tech Vision 2017 study highlights
that in the State of the Cloud survey 95% of respondents reported using public,
private, or hybrid cloud technology, while the CIO Strategic Partner Index run
by the IDC reports that 29% of IT leaders are spending more than half their IT
budget on external providers. Each platform commitment means easier future engagement
with other companies on the platform using the same infrastructure.
However, of the 176 platform companies
included in a recent report, The Rise of the Platform Enterprise: A
Global Survey led by Peter Evans and Annabelle Gawer and sponsored by the
Center for Global Enterprise, Asia has
the largest number with 82, 64 of which are in China. North America has 64,
with 63 in the US. Europe is a major consumer of platform services, but it’s
home to relatively few platform companies –27 spread across 10 countries, 9 of
which are in the UK. It is concerning Africa and Latin America have a number of
small platform companies, only 3 of which have met the $1 billion valuation
threshold for inclusion in the survey.
More African companies need to decide which
ecosystems to join and which roles to play as the technology changes are only
the beginning.
How do African companies begin to close the
gaps? An important way to get moving on this journey is to conduct an audit
identifying how many internal and external platforms you are using and the
goals for their use. Identify and address unnecessary overlaps. Determine the
platforms your organization most relies on, as well as those that most depend
on you. These are the ecosystems where your organization should hold its strategic
and market strengths.
Over the next 100 days, look to essentially
develop a comprehensive strategy to establish the foundation for your platform
business model and ecosystem. During this phase you should appoint a C-suite
sponsor to oversee a team that is responsible for championing your new
ecosystem and digital partnership strategies.
Then ever the next year,
leadership should have achieved comprehensive understanding of the new rules of
business, developed a platform business model strategy, and started to test it
with the launch of a small pilot program.
Companies should keep expanding the
conversation: for instance, in the first 100 days have a strategy summit with your
closest partners to understand their goals for the future. Uncover shared goals
and commit to developing a strategic plan for achieving them together.
Consider your organization’s future through
the lens of the biggest disruptions shaping your market, from inside and outside
your industry. Craft the ideal role of your company in this future, and develop
a shortlist of partners who can help make it a reality. And remember to develop
metrics to quantify the results of ecosystem participation.
Many global brands are already taking the bold
steps needed. The digital ecosystem is, for instance, totally redefining what
automakers do. Rather than just building cars, they’re engaging with customers
throughout the vehicle lifecycle, directly managing software upgrades,
diagnostics, and safety. In the insurance industry, pulling down driving data
from connected car platforms has enabled new services such as pay-per-mile insurance
with newcomers like Google and Metromile to challenge the industry status quo.
The opportunities are endless, no matter what industry you are in.
General
Motors kicked off 2016 with a $500 million investment into ride-share platform
Lyft. The move gave GM the inroads to launch
their Express Drive service, an exclusive offering for successful, but
car-less, Lyft driver applicants to rent a car directly from GM and get to work
right away. The program was remarkably successful in the short term, opening a
new line of business for GM: by July, 30% of new Lyft drivers were requesting
an Express Drive vehicle in their sign-up.
In addition to partnering with Lyft, GM also
made a $1 billion-plus acquisition of the autonomous vehicle software company
Cruise Automation, and another billion-dollar investment in building an autonomous
vehicle testing facility in Detroit.
This shows how platforms are rapidly becoming
the central hubs for the rich and complex digital ecosystems that companies
want to access. Consider the fact that 70% of ’unicorn’ startups (over $1
billion!) are platform companies. Other companies such as personal car-rental
app Turo and group dining experience Feastly have introduced their own
offerings, as have dozens of start-ups, each with their own angle and offering.
LiquidSpace, which lists offerings in more than 500 cities across the US,
Australia and Canada, offers a platform for renting workspaces and meeting
rooms by the day or hour.
In South Africa, a good example of a company
embracing the platform economy and reaping rewards is Discovery Vitality, while
Discovery’s proposed bank is another example of the evolution of this concept
into other exciting sectors. The retail market for consumer goods in SA
received a shot in the arm in 2015 when Kalahari was merged with Takealot, with
the technology platform cleverly harnessed to drive growth since then.
Remember the sharing economy brings people together
through technology to exchange or rent access to goods and services, so
entrepreneurs are building this economy by leveraging emerging digital
technologies to meet customer needs in new and disruptive ways.
Digital and mobile technologies have combined
with public support to create a host of opportunities to transform the way
government manages the infrastructure it has already acquired. For instance,
through MuniRent, six local governments in Michigan are already renting
equipment to and from each other.
How African companies and governments react
to this change brought about the platform economy will define their prospects
going forward. The platforms they use will serve as the pathways to the new
digital economies that will drive growth and jobs across the continent. They
will form the pillars of entire value chains in the future and so African
companies need to ensure they make these decisions wisely – and fast because there
is no doubt that the digital partnerships African companies make today will
determine how successful they will be tomorrow.
Platform economy is one of the topics to be
discussed at the Accenture Innovation Conference taking place on 17 October in
Johannesburg.
*Contributed by William Mzimba, Chief Executive of Accenture South
Africa and Chairman of Accenture Africa
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