Value creation in the platform economy

Published on 23/11/2018 in Inspire

Value creation in the platform economy

Today, every business transformation is a digital transformation. With the hype surrounding blockchain and APIs it is vital for companies to understand their value. Wat do you need to be mindful of?

Software is eating the world. A digital variant of virtually every conceivable process and every conceivable service now exists. “These days, the cloud is used not only for processing power and storage space,” says Jan Manssens, Director Strategy, Growth & Innovation at Proximus, “but also for complex applications such as blockchain and machine learning.” That makes it possible to build new solutions very quickly. “Things that once appeared on the market as a product are now available immediately as a software service. What's more, this service often interacts with the physical product as well, so that the whole exceeds the sum of the parts.” The development towards software services has given rise to various IT ecosystems fairly quickly, including IBM Cloud, SAP HANA, Microsoft Azure and Amazon Web Services, to name only the best known in the market

What about this blockchain hype? Frank Verhaest, CEO of Isbael Group, explains.

The blockchain hype explained

What is the technical story behind blockchain?

Verhaest: “A blockchain is a distributed, open data register, containing data that cannot be altered or deleted. Distributed means that the data register is not located in a single place. A blockchain is literally a chain of blocks of data, spread over different computers – often thousands of devices. Open implies that no single party is the exclusive owner of the blockchain. As an individual user, you cannot modify or delete the datablock. So a blockchain is really a big database, open to everyone, but at the same time also monitored by everyone.”

The platform economy works in all directions: you can use services, but you can also build solutions yourself and then offer them to others via the platform.

Jan Manssens, Director Strategy, Growth and Innovation at Proximus.

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The whole value chain

“We see companies coming to the realization that a great deal of value still lies hidden,” Manssens goes on. “By optimizing the available corporate data and combining them with information from other sources, new opportunities are created.” And this is where the biggest challenge lies for platform players: they have to keep the threshold as low as possible. “A company that decides to adopt a platform model is making a strategic choice. It’s important that all the links in the value chain are on the platform and that the value ultimately also flows back to the various links and players.” This is an exercise that goes much further than the digitalization of existing tools and services. “Stand-alone digital solutions – each with their own separate delivery route – will ultimately not make the difference. Digitalization needs to penetrate to the very core of a company. Bringing digital products and services together on a platform gives rise to a whole new story.”

Down to work with APIs

Proximus EnCo supports this development. On the platform, developers gain immediate access to the technologies of Proximus and its partners, provided via APIs or programming interfaces. Using APIs, it is possible to build new solutions quickly and easily by combining existing blocks with one another. What's more, you can respond faster. What the CIO is proposing is too expensive and comes too late: this witty remark is often bandied about. The traditional IT approach only offers solutions to yesterday’s problems, as it were. “By thinking in terms of APIs, IT places the ball firmly in the business camp. On a platform like Proximus EnCo, you can then move in various directions. You can benefit from solutions, but you can equally well build applications, not just for your own use but possibly also to offer to external parties via the platform.”

In search of value

The API economy is creating a new type of freedom from restraint and greater agility. That provides new opportunities but, at the same time, it is also a challenge for those offering existing, integrated solutions. “With the platform model, you no longer have to purchase a complete software suite for logistics, for instance,” says Manssens. “Instead you just take a very specific functionality, such as the API for the estimated time of arrival.” This example immediately shows the obstacle facing service providers. “In the platform economy, they are moving away from their familiar business model. In short, they need to understand very clearly where the value lies and only then think about what they put on the platform.” Just waiting to see what will happen is not an option here. “Every business transformation is a digital transformation today,” Manssens concludes. “In the ideal case, a company makes the result of this transformation into a spin-off and, that way, it sells the service to other companies – again via the platform.”

Jann Manssens is Director Strategy, Growth and Innovation at Proximus.

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