What drives digital transformation? Sometimes, it's something as simple as considering technology news and re-imagining processes as platforms.
A recent Harvard Business Review gives an example. A company wanted to optimize its ordering system to give its customers more and quicker information on out-of-stock and unavailable goods.
The solution? Put notifications about out-of-stocks and unavailability up front, where the customers saw them first, rather than going through the entire order process and realizing only at the end that the products they wanted weren't available.
Realizing the Limits of Optimizing Process...
But the user experience team quickly realized both practical and business strategy limitations in that idea. If customers saw out-of-stocks before they had begun ordering, it was more convenient for them, yes. But it also raised the possibility of customers going immediately to competitors to fill the order - or not making purchases at all.
It was a dilemma because most businesses believe that more information delivered more accessibility will improve results. In this case, it had some potential to improve results for the company, but it also had a manifested potential to impact results negatively.
A solution did exist, however. It was to conceptualize the complete information as part of a platform, rather than part of process optimization. As the HBR puts it, the order process needed to look more like amazon.com. Amazon.com is a classic platform, serving as a middleman between consumers and want they want to purchase, with a great deal of information on what's in stock, prices, available discounts, and the estimated time to deliver the products.
...and Conceptualizing Process as Platform
As a result, the company began to conceptualize what had once been process optimization as an innovative platform. To quote the HBR: "challenging people to visualize processes as platforms completely changes how trade-offs between innovation, optimization, and user experience are debated and discussed."
The differences can be profound. Under a product business model, value is created by differentiated products targeted to specific customers. The model runs on the revenue charged for those products.
Under a platform business model, on the other hand, companies create value by connecting users with suppliers of the products they want. Revenue is gained by charging for access to a digital platform.
Platforms, as a result, can be spaces where users give feedback on what they want and how they felt about the goods or services. This is rarely a large part of a product business model, but one has only to think of amazon.com, Apple's app store or Netflix to realize how much it is part of platforms.
Revenue is gained by charging for access to a digital platform.As a result of the shift from process to platforms, customer fulfillment becomes quite different. With a process, it may be shipping, packaging, and receiving. As platforms, it may become a study of how clients can best receive value from suppliers - and how suppliers can best receive value from their clients.
While not all companies can shift to the platform model, a surprisingly high number can. It takes stepping away from business as usual and literally "re-viewing" what is supplied to customers, why, and how.