This article is the third in a series on the Accenture Technology Vision for Oracle. The series explores five key trends discussed in the vision: Intelligent Automation, Liquid Workforce, Platform Economy, Predictable Disruption and Digital Trust. This article focuses on the Platform Economy trend, and the use of Oracle technology in adapting to that trend.
As a music lover, I often encounter the ‘Like us on Facebook’ button or personalized Google Ads on my favorite music blogs and websites. When I order records on Amazon, I get product suggestions, I can review ratings, and I can share my purchase via Facebook.
These actions are made possible by the platform economy, which may well be one of the biggest transformations for business since the Industrial Revolution.
|What is the Platform Economy?|
Digital platforms support broad communities of customers, providers and innovators, enabling them to come together to create, launch and run new businesses and revenue streams. The platform links an ecosystem of partners that can provide product extensions and enable the integration of customer data into products or services. So, the platform helps to increase the value of products and services over time. A good example would be Apple’s iPhone, which relies on its ecosystem for ongoing improvements and enhancements.
In short, platforms provide a way to drive ongoing value creation—making them an increasingly important engine of business performance.
A decade or so ago, renting a movie was like shopping for groceries. You would go to the store, look through shelves of products and pick out what you wanted. Today, you are more likely to simply stay home and watch a film via Netflix or iTunes. The traditional video rental shop has been replaced by a digital platform that not only delivers the basic content, but also offers trailers, ratings, playlists, discussions and feedback opportunities.
Netflix is a prime example of how the platform economy can transform a traditional business. The company started out a as mail-order video rental business. By creating a digital platform, it was able to integrate third-party devices such as DVRs with a “Netflix button”, thus enhancing its market penetration, and giving consumers greater ease-of-use. For their part, device makers reaped the benefits of having their products be the interface to multiple content providers..
With a platform-enabled ecosystem, innovation is no longer limited to one company—it is pursued jointly by a number of companies. This broadens and accelerates innovation. For example, under its Friends of Hue concept, the Philips Hue smart lighting company has collaborated with Apple, Logitech, Nest and Amazon for light-related innovation, such as voice-controlled lights and lights that turn off when people leave the premises.
|The Platform Economy Imperatives|
Companies that want to benefit from the platform economy will have to adapt their technology, services and processes. Ultimately, they will need to heed four key imperatives:
Be “liquid”: Companies will need to adapt quickly on both the organizational and technical levels. That might mean using agile and scrum software development techniques, or implementing cloud technologies that can be updated quickly and regularly. It is also important to have the right type of workforce—ideally, a highly adaptable “liquid workforce.”
Be scalable: It is important to keep up with growing numbers of users and connected devices—and if a platform is successful, such growth could be rapid and exponential. This can lead to platform overload, something that the Australian Taxation Office has experienced for example. To avoid becoming victims of their own success, companies can use Oracle Cloud solutions that have the capacity and scalability to cope with large numbers of users and large fluctuations in demand.
Apply data analytics: With a platform, companies will collect large amounts of data. This can be used to enable additional features in products and services. (A separate blog post discusses the value of data analytics and the trend toward “predictable disruption.”)
Security first: With an open platform, configuring security to prevent unauthorized third parties from accessing the platform is critical. (See the related blog on Digital Trust.)
|Building the platform|
Picture a retail company that supplies office equipment to companies all over the world. To meet this global demand, it uses subcontractors. In order to work efficiently and provide fast delivery, those subcontractors need to plug into the company’s ecosystem (platform) so that they can receive and process customer orders directly. How can that office supply company go about building such a platform? One approach might look like this:
The foundation of the platform will be a Software-as-a-Service application, such as Oracle Sales Cloud. By using accelerators from Accenture Foundation Platform for Oracle (AFPO), the company could set up this foundation in a few days. It could also use Accenture Cloud Connect for Oracle to automatically move data from legacy applications to Oracle Sales Cloud.
To enable subcontractors to plug into the platform, the company could publish ready-made web services from Oracle SOA Cloud Service, making those services available immediately. It is also possible to create and publish custom-made services.
The company would then have large subcontractors confirm that the connection to the platform and web services is in place from their side, enabling them to see the latest status and history of customers and orders.
For smaller subcontractors, the company could create a self-service portal using Oracle Application Builder. This portal would let them receive the same information provided to larger subcontractors, but without their having to develop software and connection on their side.
This is just one possible approach—there are numerous other ways to develop a platform. The right path forward will depend on the company and its situation.
Does your company operate with a platform or participate in the platform economy? What have you learned? What advice would you have for others? Share your thoughts with Christian at firstname.lastname@example.org.