Digital ecosystems and IoT will help you unlock real business value, allowing you to achieve the future you desire for your company.
Ecosystems are nothing new or revolutionary. What is new is that new waves of digitalization are forcing entities of all sizes and strategies and operate together in an rapidly-changing and complex environment. In today’s digitally enabled markets, the concept of a social, business ecology, as outlined back in 1985 by organization consultant Peter Drucker, has become a full-blown reality.
Harnessing Data in New Ways
It is the notion of “digitally enabled” that makes the drive to ecosystems so relevant. To benefit from digital ecosystems, you need products that generate and share data within your network of contacts (eg, customers, prospects, and partners). In doing so, you can compete not just with products but by getting value from the data your products generate. At a basic level, by infusing digital connectivity into your value chain and production ecosystems, you strengthen your prevailing competitive position.
The word “digital” is not a new term either, as its applications go back to the era of mainframe computers. Neither is the topic of data new; most enterprises are accustomed to capturing and utilizing data from markets, products, or operations, and integrating it within their value chain.
What is new is that modern technologies enable real-time and archived data to be combined and strategically harnessed in fresh ways. Modern technologies allow you not only to unleash historical data from silos but also to mash these historical views with real-time data—providing completely new real-time insights. These new insights can provide business with strategic advantages and allow them to be more competitive than before.
Take, for example, a smart elevator. The sensors on the elevator provide the manufacturer with insights specific to every time the elevator is used. Archived data, on the other hand, accumulates insights over time to develop profiles of each elevator. Archiving these insights and refining each elevator profile with continuing streams of real-time data helps the company to gain intelligence.
Over time, the manufacturer can develop more intricate insights on individual customers, allowing R&D to develop products that are more customized to the user’s preferences. Knowing how often a customer uses the elevator and how continuous that usage is, for example, can help the manufacturer develop elevators that more closely meet the needs of the owner/user of that elevator.
Data is the key element. So, what are the kinds of technologies enabling the digital ecosystems that allow you to take advantage of the data? Of all the technologies, I want to specifically highlight IoT.
The Potential of IoT
As we know, IoT has the potential to offer business value that goes beyond operational cost savings. IoT allows you to monetize largely unexplored opportunities by developing compelling solutions. The ability to collect and analyze disparate data, both in real time and across time, is truly transformational. It is often not easy to see how these developments will play out within and across their enterprises, offering opportunities for sustainable value creation. You need some imagination to see them.
IoT allows for greater visibility and control of the enterprise itself but also allows you to understand and begin to shape your relationships with customers, business partners, and your own workforce. What you can do with this intelligence depends on the industry and your company.
IoT and Improved Performance
Considering ecosystems, it is especially exciting to see what IoT can mean for performance improvement. Digital ecosystems offer opportunities but also implied risk to the status quo in every industry. Simply put, digital ecosystems add data-based competition into the mix of product-based competition, leading to new competitive scenarios and dynamics.
Traditional margins associated with dominant product-market shares may also erode if new data-driven digital ecosystem services commoditize product-based offerings. Tesla is a good example of a company that is forcing the German car manufacturers to rethink how to produce and sell cars. The example of Tesla also underlines the fact that dominance through products may not be enough when competing in digital ecosystems. You have to seek new kinds of dominance through data orchestration.
Creating Sustained Value
While the term “ecosystem” has been around for decades, the implication of adding digital technologies to the mix is exciting. New technologies such as IoT will help companies to create more sustained value through moving from a one-time-transaction focus to a continuous-relationship focus with customers, suppliers, workers, and assets.
Unlock value and leverage the real digital ecosystem power. Then, you can achieve your future goals.