Being part of an ecosystem has its complexities too, due to difficulties in identifying the right ecosystem partner, balancing valuable insights with customer data privacy, overlaps in operations, and determining who owns the end-user relationship.
Companies should ask themselves if they want to become the platform where other players connect or join an existing ecosystem or platform orchestrated by another player.
First, companies need to understand the orchestrator opportunities available in their respective industries or regions. Not all companies can orchestrate an ecosystem; some must partner with the largest ecosystem or incumbent. The decision to build a platform or join an existing one should be taken after a comprehensive due diligence exercise.
Regardless, companies should increasingly keep an open mind in digital ecosystem thinking to keep their business strategy agile.
Boards and CEOs should ask the following questions:
- Do you have a holistic digital strategy that carefully considers buying versus building capabilities?
- What is your capital strategy to invest in digital and platform initiatives for the next two years?
- Do you have a clear long-term divestment strategy as part of your digital transformation?
- Are you making investments to build or tap into a digital ecosystem?
- How are you reviewing your operating model and integrating acquired digital assets to maximize value creation?
The pandemic highlights that those slower in the digital journey may perform well in the short term, but will find themselves on the back foot, or out of the race soon enough. Yet, simply incorporating digital technology into business processes is not enough. For continued success, companies need to critically review their business strategy, and assess how gaps can be overcome by organic investments, strategic alliances, or tapping into the broader digital ecosystem. Now is a good time to do so — with the pandemic comes uncertainty, but also opportunities for a first-mover advantage.
