The Transformative Effect of Platforms in Businesses

Some of the most well-known tech companies have one thing in common. They are all hugely successful, paradigm-shifting companies that have substantial market values and they keep growing. Apart from that, they are platform-based businesses that have made a lot of money because of how quickly they can change and adapt to new opportunities.

As part of McKinsey’s Technology IT conference, some of the best CEOs talked about how they’re making their companies digitally mature, which means they use technology to make their businesses more profitable. As soon as they learned about platforms, the people in the meeting quickly moved on to what they didn’t know: the value of platforms comes from connecting them to the business strategy and having a good idea about how all of their parts need to work together.

Multiple industries were represented in the roundtable including banking, automotive manufacturers, pharmaceuticals and airlines. They were all intrigued by the possibilities of platforms. 

Even though everyone agrees that platforms are essential, conference presentations and discussions showed that companies that use platforms in their enterprise architecture do so differently. Some of the best companies, like the tech giants, used the following three elements to make their platforms better.

1. Building the relevant ecosystems

The first type of platform transformation is about changing the business model to use platform elements like ecosystems in one industry or across traditional industry boundaries or setting up marketplaces that connect customers and providers. A banking CIO said that the customer journey is an excellent place to start when moving to a platform-based model. He talked about how his company built a network of partners integrated into their banking service. He made sure that “we’re not seen as a banking brand, but as a lifestyle brand.”

It is becoming increasingly common for people who shop at a store to use a platform-based model rather than a bricks-and-mortar one. Using artificial intelligence personalization, its CIO demonstrated how the firm could compete in a highly competitive and crowded sector.

It has a flexible app platform that allows both the customer and the business to value its apps. A feature on the platform showed that people who chose the “prepaid” option made a lot more money. “So we now give rebates to customers who use this feature,” he said in an interview, which is suitable for both the customer and the store.

2. Using platforms as a service

IT and business stakeholders can also be rearranged around a series of modular platforms, each with a distinct cluster of operations and technology that helps accomplish a specific business objective. This new perspective on technology significantly impacts how companies employ it. In addition to being technology, platforms are also a service that businesses may utilize to their benefit.

The transition to a modular platform model begins with assembling a world-class team of engineers. As part of its overall human resources strategy, this multinational pharmaceutical business has created a unique career path for engineers that rewards self-motivated effort. To put it another way, “excellent engineers” want to build code, not request time off.

A well-known bank has also taken steps to ensure that it doesn’t run out of good employees. It screens and hires people in-house instead of hiring outside recruiters to do this vital job. A company leader told us, “We need to be better than them, or else our competitors will be able to hire our employees, too.”

To fully digitize the customer experience, an airline needed to update both its business strategy and technology at the same time. Efforts were taken to guard against the legacy company from compromising the platform concept. A new team, or “digital embryo,” has been formed in a separate location that is close to the company’s headquarters but far enough aside so that “we don’t always eat lunch along with coworkers who may divert us from our aim of radicalizing all areas of business and technology,” according to the company. The smooth transition to a new platform is dependent on well-organized platform governance.

3. A robust technology backbone

Finally, a platform transformation is usually based on technology platforms, the foundation for new digital ideas. There were a lot of stories about how people first “clean up” their IT architecture to make way for new digital ideas. This is how a well-known pharmaceutical company set the stage for its transformation: They used six target platforms and cut down the number of applications from 4,000 to 1,000.

Companies have embraced platform transitions in more significant numbers in the previous two years, and as that number expands, so will the implications of what that entails.

All platform selections must be made with a long-term plan that considers the whole enterprise architecture of the organization.

Cooperative Computing can help you with the platform transformation. Our experts have acquired the industry knowledge needed to make big things happen. Let’s begin with your digital maturity assessment today!