Changing your business model

According to Gartner, nearly 40% of CIOs report that they’re the leaders of digital transformation in their enterprise, and 34% the innovation leaders. That’s no surprise. It’s a critical role, seeped in technology. And that’s especially true these days of widespread disruption. There’s never been more pressure on organisations to change the way they do business – especially by shifting over to a business platform.

So what approach should we adopt? Well, while infrastructure may be the great enabler, as we saw in our last blog, Doing more than you ever did, platform thinking only works when you start with a business problem rather than a technology problem. This means you should start by rethinking the business, not redefining the IT.

If you build it, will they come?

Michael Schrage in his MIT Sloan Management Review article, Rethinking the Value of Customers in a Digital Economy, says: “Successful platform companies and competitors see their customers and clients as assets worthy of innovative investment.” It’s vital to identify where your business opportunity lies. If you start with the customer in the spotlight, you can’t go far wrong. Look at your platforms as a way of making the most of your customer’s expertise and getting them to participate. Customer participation and the data those insights will lead to, is where the real business value lies.

What should you focus on?

If you can derive the right market insight from your business colleagues, use your leadership and team skills to get a collaborative culture, and motivate the key IT players to drive your platform development ahead, the result will be real business value.

Now let’s get down to the details.

1. Avoid platform for platform’s sake
   Work out why you need a business platform in the first place.

2. Building up your CRM capabilities is your priority
   Platforms are where customers congregate, and it’s this true north that should be the focus of most of your thinking.

3. Decide where the opportunities lie
   Discuss and brainstorm with a cross-business team of senior management colleagues. It’s the most effective way to get a grip on business challenges and see where you can take advantage of the gaps in the business/market.

4. Strengthen your brand, don’t weaken it
   Work with key decision makers to ensure that new revenue opportunities or business models fit in with your company’s core brand vision and value proposition.

5. Decide on what good looks like
   Once you have assessed the gaps, work out how to fill them and the measurable outcomes that you can expect as a result.

6. Enable simplicity and agility at scale
   Platform business models create vast opportunities, but they shouldn’t command vast budgets. Define a simple idea of how an area/revenue of the business model will change, put together a minimum viable product/solution and test it amongst employees/customers. The old concepts of agile and iterative should apply here more than anywhere.

7. Don’t monetise everything
   For most companies, platforms are a real opportunity to capture real-life data. If you place a financial value on everything, you may drive away customers and lose out on their data. So only monetise where it’s the best option.

8. Feed it back into the board
   After you have come up with the idea and can forecast the business benefit, share your findings with the executive leaders and get early buy-in.

9. Put together an A-team
   Your idea won’t come to fruition on its own. Pull a cross-functional team together to create a specific plan of action. Ensure that you’ve clearly defined their roles and adjusted their KPIs accordingly, with emphasis on the new platform’s success.

10. Be available
    Even with a following wind and the best will in the world, the team will come up against obstacles. That’s when they’ll need you there to steer them safely home.

11. Be the champion
    The rest of the business needs to understand why you’re doing this. Tell them. Along the way, make sure that the relevant functions are helping you with training materials, marketing the platform both internally and externally, and measuring its success.

12. Build momentum
    Once you’ve launched the platform, you’ll see opportunities for further changes in the business. Build on your success so that you can speed up your innovation when you need to.

What you can expect in the future

Over the course of these blogs, we’ve looked at why so many companies are switching to business platform models (if you were wondering, the top 15 public platform companies already represent $2.6 trillion in market capitalisation). We’ve considered the advantages of platforms compared to models and the ingredients that you need to blend. We’ve also introduced the twelve actions that will help you move towards a successful business platform on the cloud.

One other fact. When you move to the new platform business model, you won’t be on your own. At the moment, there are around 100 industry clouds. By 2018, IDC predicts that there will be over 500 – a 500% increase.

If you’re ready to join them, why not download our eBook guide today?