Why Platformization Is Key to Successful Digital Transformation

The concept of platformization is taking the world of enterprise IT by storm. As digital transformation is on the agenda of every organization’s strategic plan, businesses are realizing that platform businesses deliver higher revenue growth, profits, and value as exemplified by digital-native businesses such as Facebook, Google, Amazon, Apple, Microsoft, etc.

In simple terms, Platformization is when you create a marketplace as your service, then charge people to use it. And to keep people around, you add value through transaction facilitation, user experience, and integration.

Platformization has gained momentum over the last decade following the expansion of broadband, networks and the Internet of Things (IoT), – and requires the enterprise to reimagine their business across multiple dimensions – organization, business models, customer engagement, ecosystem, technology and data.

Assessing Readiness

Enterprises embracing the Platformization journey should assess their readiness against several factors that we largely classify under three pillars – Organization Readiness, Technology Readiness and Ecosystem Readiness.

1. Organization Readiness – Transformation to platform business demands more than new technologies. It also requires changes to culture and process in the organization. So, it is necessary to assess the platformization readiness of an enterprise on factors such as culture, process, availability of digital talent, governance and team structure.
2. Technology Readiness – Right technology capabilities are very important for transformation to digital business through platformization. So, platformization readiness should also be assessed based on factors such as the current state of the existing systems and applications for customer engagement and monetization, need for ecosystem and IOT platforms, openness of existing systems and applications, the availability of data and insights for sharing within and outside the organization
3. Ecosystem Readiness – To transform to platform business model, it is important to have a suitable strategy, business model and operating model. It is necessary to assess the readiness in terms of opportunities in the ecosystem for platform business model, how to monetize those opportunities and create revenue, how to orchestrate and scale the platform for sustainable digital business.

Best Practices

When enterprises embark on platformization, they should focus on the following to maximize the likelihood of success:

• Create separate digital organization with leadership to champion the top-down planning and implementation of platform
• Assess the internal teams on agile maturity and coach/enable them to adopt agile mind set and agile engineering practices. Bringing an external partner to provide outside-in view on agile maturity level within the organization would help in this process
• Train the internal teams on digital technologies and bolster the overall capabilities of the organization in digital technologies
• Explore the opportunities in the ecosystem and create a vision for platform business in terms of platform strategy, platform business model and platform operating model, business success criteria and KPIs. Bringing an external partner to explore the current business and assets, existing ecosystem and strategic market plays that can deliver a unique value proposition to both producers and consumers will accelerate this process.
• Reimagine the UX design by gaining a deep understanding of user behaviour and needs, user journeys of the different personas (producers and consumers) on the platform. Bringing an external partner specialized in user experience design will greatly help in validating the UX vision
• Create a cross functional team of experts with knowledge of legacy applications, modern architecture and next gen thinking to conceptualize the high- level architecture of the platform. Bringing an external partner to finalize the platform architecture at this stage can drastically reduce risk
• Build POCs for specific platform capabilities to validate architecture and design assumptions. Later, build MVP to validate assumptions and get early feedback from the ecosystem. Bringing an external partner to build POCs/MVP will accelerate the process
• Roadmap for platform implementation in terms of interim and end state architecture
• Organization Change Management process to drive and reinforce cultural change, training on new platform systems

(The author is Associate Vice President, GlobalLogic)