The last couple of decades was the exponential growth of the internet era which got extremely pervasive. Now the whole world is well-connected thanks to digital. Historically businesses used to believe that they were the sole creators of value and it was a very linear value proposition that the business used to generate. It was a ‘pipe’ based value proposition because the value was created through raw materials, products, and services. With the internet and everything getting connected, businesses started to realize that they are no longer are the sole creator of value. You now have consumer getting connected to producers and consumers are getting more empowered than ever. So this ecosystem outside the organization that is really creating value has been formed. Suddenly we are witnessing traditional organizations getting disrupted by companies which they have not even thought of. So the industry in the industry segments is getting blurred. People are manufacturing industry could get disrupted by technologies and every company is becoming a technology company or have technology at the core of its operation. Hence we are witnessing these born-digital unicorns disrupting the traditional industry segments. For example, the largest taxi company that does not own a taxi and we have a company that does not want a single property but still, it's the largest hospitality accommodation company. So the impact of these born digital companies are for all to see.
Why these companies have been so successful? What is the secret behind their exponential growth?
For start, these companies are completely asset light. They're not physical asset heavy like the traditional counterparts. They have created a very unique approach to business based on the platform model.
What does this platform model really mean?
It's really about value creation and exchange between the producers the consumer in a nonlinear fashion. Here the ‘pipe’ based business model is being replaced with a ‘platform’ model that engages the larger ecosystem at play. So platforms are really an interplay between the value network and the value creation. Then you've got a very sophisticated technology layer that is orchestrating this value equation. Then the third one is all about data. The ability to make use of the underlying data that the business generates is really making this platform more intelligent and more self-learning.
Can traditional companies take a platform thinking approach to digital transformation?
As much as digital transformation is all pervasive, it's also very fuzzy at times. Everyone wants to go digital but not everyone is sure how to go about it. Every enterprise is focused on one or the other digital technology, but is there something more holistic approach that can be taken? Where to start? Is there a meaningful approach to digital?
We see that customers are really struggling with a meaningful approach. If you need to be a truly digital company then you have to look at how the true digital enterprise's functions. True digital businesses are those businesses that help you orchestrate value not just within your enterprise but can orchestrate the ecosystem in the right way. Enterprises need to ask some hard questions while creating a digital agenda. Can you be connected both internally as well as to your ecosystem? Can you be scalable right across businesses across locations across users? And can you be really intelligent? So that you can apply self- learning and harmonize those learnings onto your platform that engages your customer, suppliers, and partners.
This is still an evolving process and still, there is a lot of room for improvement and a lot of research that is going in. For example, at Sonata we have taken a deep dive approach through Platformation™ to make a practical value proposition for our customers. Depending on where our customers are on their digital journey, we have a very structured approach. We help our customers think like a born-digital company measure and harmonize with their digital strategy and where there are in the digital journey. We help our customers understand their digital maturity. Sonata has developed a unique digital maturity framework that analyzes where they are in the current digital journey and what are gaps. The first step to that is the maturity assessment that can be taken here – check Sonata’s Digital Maturity Assessment. We not only consult but also have strong execution capabilities as well where we help our customers build these digital platforms and the ecosystem at play.
It becoming very evident that in order for traditional enterprises to accelerate their digital journey, a platform thinking is the only way to succeed.