Over the years, platformisation has become the go-to tool for market disruptors. It connects key players – customers, business partners, suppliers and regulators – across ecosystems, enabling organisations and businesses to exchange information/products and integrate resources/services, giving them greater analytical and data insights, resulting in faster growth. Here, Gibson Nascimento from API specialist Sensedia explains how platformisation works and outlines how to build an ecosystem that gives users greater agility and resilience
Platformisation, or building a marketplace where transactions happen, with software providing the communication and data-sharing tools and Application Programming Interfaces (APIs) connecting them, has been given a huge boost by broadband and the Internet of Things (IoT). People, devices and companies are connected constantly, while analytical technology provides those all-important user insights.
Platformisation allows stakeholders, such as partners and customers, to share data and processes, expand their digital capabilities, merge services/business models, co-create products, develop new marketing opportunities and increase customer participation and profits. It facilitates event monitoring and trend identification, orchestrates resources and triggers co-ordinated actions among ecosystem participants.
American marketing author, consultant and professor, Philip Kotler, says ‘Competition is no longer between independent companies; it’s between business ecosystems that compete with one another to obtain the best customer service and lower costs’.
Platformisation, however, is only beneficial to business leaders who are platform thinkers. And this requires a change in the thought process from:
*Resource provision to resource orchestration;
*Internal optimisation to external interaction; and
*Client-centric values to valuing the ecosystem as a whole.
The theory works in practice when a flexible and programmatic IT system, running an event-driven platform with service-based (microservice) architecture is in place. It must also be capable of supporting legacy system integration (alongside new technologies), dynamic offers, omnichannel experiences and orchestrated actions.
Platform thinkers who are confident their IT can transform their digital business must decide what they want the platform to do. Gartner identifies four platform strategies that are not mutually exclusive and which all have different degrees of openness e.g. internal, restricted or open API use. These are:
*Collaboration – to enable new ways for ecosystem partners to integrate and collaborate;
*Orchestration – to enable ecosystem partners to share resources and processes;
*Matching – to pair up those who offer particular services with those who demand them; and
*Creation – to enable partners to create their own apps, products/services, capabilities and business models.
Industrial firm Caterpillar has various platform strategies far removed from the linear format associated with its sector: Cat Connect is an IoT platform for dealers to help client teams be more productive while keeping operators safe; Uptake is a collaboration platform that uses algorithms to analyse mass data on IoT platforms, detect issues and prevent unplanned downtime; and the CAT Rental Store connects people who own and want to rent equipment left idle.
Platform success hinges upon three fundamentals: connection, gravity and flow.
Connection is about the ease with which others can connect to the platform to share data and services. Apple, for example, provides developers with its underlying operating system and code libraries; YouTube has a hosting infrastructure for creators; and Wikipedia has tools that enable writers to collaborate on articles.
Gravity is about how well the platform attracts participants, providers and consumers; platform builders should pay attention to the design of incentives, reputation systems and pricing models.
Flow is about how well the platform stimulates the flow of value and co-creation among ecosystem participants.
APIs are intrinsic platform elements and often described as the glue that holds everything together. An API Management system reduces complexity, governs the platform, gives integration agility and opportunities to repurpose components and develop new business models within the ecosystem.
These agile and scalable connectors communicate between internal services, client applications, analytical applications, cloud technologies, IoT devices and the external partner ecosystem. They also apply control and security mechanisms.
APIs make it possible to distribute data/services through new channels (different interfaces and IoT devices), offering omnichannel experiences. They quickly transform data/services into new products and expand existing offers/market products with different forms of monetisation.
They develop new event-driven IT architecture, using microservices and mesh apps to encourage greater agility, component reuse, decoupling, flexibility and responsiveness. In addition to facilitating new business models, APIs enable new technologies to become service providers (e.g. integrating AI with legacy systems) and create innovation initiatives, such as hackathons and joint partner/start-up projects.
In this increasingly competitive world, businesses that are not ready to move to a platform strategy must at least imitate platform thinkers: create more agile IT environments; connect to partners in ecosystems; and focus on the value it gives them.
Gibson Nascimento, based in Dublin, has over 14 years’ software development, agile methodology and architecture experience and is Head of Solutions, EMEA at API management platform provider Sensedia. He is an expert in Application Programming Interfaces, supporting multiple industries including retail, pharma, health insurance and banking. With offices in Brazil, Peru and the UK, Sensedia is recognised as ‘visionary’ in Gartner’s Magic Quadrant and as a ‘strong performer’ by Forrester Wave.