RESEARCH REPORT
Level up: Elevate your business with a platform strategy
5-MINUTE READ
March 01, 2024
In brief
- Businesses don’t need to be born online to realize the value in a platform strategy.
- Platform adopters exhibit higher levels of resilience, have a more detailed view on how to create value, and are more likely to form new partnerships.
- A platform strategy changes the game when executives use it to imagine how they can reinvent every aspect of their business.
The moment of (re)discovery
When we decided to explore the impact of platform strategies, we knew it was well-traveled territory. There are many companies who started their business on the strong foundation of a platform strategy, and their successes are well documented.
The more intriguing insights emerged when we focused on the cohort of “platform adopters." Rather than starting their business with a platform, these are companies who have used a platform strategy for a specific purpose: to launch new business opportunities or provide completely new customer experiences. What we’ve discovered is that these adopters can effectively realize the benefits of a platform strategy at a pace that tracks that of their digitally native peers.
We spoke to executives such as Chris Kasten, senior vice president, Common Platforms at PayPal. And we validated our findings with an in-depth statistical analysis of 375 of the world’s largest 2,000 companies from 12 industries. The 152 platform adopters in our analysis generated, on average, 2.1 percentage points higher margins in the 2019 to 2022 period, compared with non-platform companies. Furthermore, when measured by the enterprise value to invested capital multiple, platform adopters enjoyed an average market premium of 2.4x, surpassing the 1.5x premium of non-platform companies.
However, these financials are just the tip of the iceberg: a business that didn’t start life on the internet is more than capable of rapidly adapting a platform strategy. Platform adopters exhibit higher levels of resilience in nearly every measure of Accenture’s research on resilience, including financial discipline, technology, sustainability, sales, and supply chain and operations. They have a more sophisticated view on how to create value for their enterprise and for their whole ecosystem. And they are more likely to form new, beneficial partnerships year-on-year. Finally, as a critical component of a company’s digital core, enterprise platforms and a platform approach are imperative for companies on a reinvention journey.
A platform to reinvent everything
A platform strategy changes the game when executives are ambitious enough to use it to imagine how they can reinvent every aspect of their business.
Of course, any company can introduce technology into a business process and get improved results. The most valuable platform players, though, are those that use platform technologies to reimagine every step of their supply chain, their customer journey, their decision-making: a well-designed platform strategy can help improve every interaction and every cog that whirrs to make your business work better. A great platform strategy is a way to look at every control and decision point that happens in a business and think: what should happen next?
Three targets that great platform performers focus on
Of course, not all companies are ready to commit to a platform trajectory and our research explores the reasons why. But for those ready to begin their launch sequence, we’ve identified three stages that will help get the maximum lift from their platform strategy.
Steps to maximize potential
Analyze your organization and consider how you can connect different parts of the company and its stakeholders with a laser-like focus on value.
6,000
people in Nike were reorganized around a platform model. It created a single catalogue of its capabilities, which allowed it to deliver new services and shorten time to market.
Successful platform adopters use their unique combination of technology and strategy to develop hard-to-replicate customer experiences, business models and capabilities.
15
years ago, the LEGO Group launched a new ideas platform to interact with customers. Now it’s a thriving community that fans use to submit design concepts for new sets
Business and tech leaders should collaborate to ensure a platform supports every aspect of the business, from driving revenue to improving operations and customer experiences. They also need to prepare their company for the changes ahead.
2.3x
Successful platform adopters invest 2.3X more in tech than non-platform companies, with cloud investments making up a huge part of this spending.
It’s game time for platforms
Platform business models have proven their value for many years in digitally native companies. Now, they are gaining traction among companies that historically would not have been considered “platform businesses.” As companies have improved their digital core–realizing that a strong digital core is how the world’s leading organizations will build, apply, and integrate their technology estate to position themselves for success in the coming years–platform strategies have gone beyond the preserve of the few to become the opportunity for the many. And now generative AI–which both accelerates and enables reinvention–is offering to unlock entirely new levels of value and new performance frontiers for companies with the ambition to explore them.