Wednesday 17 July 2019

Almost half of executives surveyed said they are actively
seeking ecosystems and new business models.
Image: Bigstockphoto

Cornerstone of future growth: Ecosystems

WASHINGTON, July 10, 2018

Businesses must pursue innovative, agile business models to remain competitive and grow outside of their traditional core business—and many perceive ecosystems as a strong opportunity to do so, said global management consultancy Accenture in an analysis.

Every industry is susceptible to disruption by ecosystem plays. Those who aren’t ready are at risk for value degradation. More than 40 per cent of companies across 20 industries—accounting for a combined enterprise value of $26 trillion—are highly susceptible to future disruption.

Seizing the full potential of ecosystems

Accenture Strategy surveyed 1,252 business leaders from diverse industries across the world to better understand the degree to which companies are capturing ecosystem opportunities. Companies are pursuing new business models to navigate, or even lead, disruption, the survey found.

Almost half of executives (46 per cent) surveyed said they are actively seeking ecosystems and new business models. However, executives often don’t have the experience and capabilities to design and execute market-leading ecosystems.

Many of those surveyed aren’t seeing the revenue growth they had predicted from ecosystem participation, said Accenture Strategy. While 58 per cent of companies targeted a growth rate of 3-4 per cent, only 40 per cent are achieving it. Just 12 per cent of companies are seeing growth of 5 per cent or more from ecosystems.

A plan for forming ecosystems

Leading executives achieve performance targets and disrupt their industries by focusing on three major pillars as they form ecosystems:

Ecosystem strategy

Executives believe that ecosystem participation allows businesses to innovate (63 per cent), increase revenue growth (58 per cent), access new markets (55 per cent) and access new customers (55 per cent). Yet companies struggle with their strategic intent and goals for the ecosystem. Many executives (84 per cent) say ecosystems are important to their strategy of disruption, but 37 per cent are unable to balance the current business while exploring the new. Ecosystems require new mindsets and resource allocation.

Ecosystem business model

New business models accounted for just 1-5 per cent of 2015 revenues, but are expected to be responsible for 30 per cent by 2020. New business models thrive in an ecosystem. But to cultivate value, companies need a strong ecosystem business model that clearly identifies customers, markets, channels and the revenue model.

Ecosystem operating model

Many business executives are uncomfortable ceding control, which must happen for an ecosystem to be successful. Company leaders must fundamentally shift their mindset—relinquishing control and allowing others to do what they do best. One area where many keep the reins tight is data. Yet data sharing is essential to sustaining an ecosystem. Half of executives surveyed say they are using platforms to share data and/or information across businesses. Many are concerned about sharing intellectual property data (34 per cent) and about cyber security (35 per cent).

Execute the ecosystems vision

The executives we surveyed see a strong future in ecosystems. In the next three to five years, they believe ecosystems will create new competitive advantage (56 per cent), allow them to use data and analytics to better serve customers (50 per cent), create new customer experiences (46 per cent), and drive innovation and disruption (44 per cent). These are the steps to executing an ecosystems vision:

Shape the market play

At the centre of the ecosystem are market plays, disruptive growth opportunities with significant revenue potential for ecosystem participants. Ecosystem players should have a clear strategy for these plays: Define the vision, business case, prioritization and roadmap for the market play(s). The roadmap should outline how the ecosystem will incubate, launch and scale ecosystem products and services.

Claim your role

Every business can determine where it fits in the ecosystem by asking: Who are our customers? Who are our partners? What are we selling? How will we monetize? Will the business choose to be the innovator that proactively defines and leads innovation? The aggregator that plays a transactional role in the ecosystem? Or the orchestrator that builds the platform and assembles the partners?

Having a strong and clear role in an ecosystem allows companies to pick the right teammates to make a powerful market play.

Pick your partners

A variety of partners—from social to solution to infrastructure partners—can complement the ecosystem strategy. But those partners must be carefully selected. Ecosystem partners should bring complementary capabilities, a collaborative mindset, domain expertise, customer relationships and data that will help bring the market play to fruition.

Orchestrate the ecosystem

Once leading companies with distinct capabilities join together with a shared vision and clear plan for the market play and desired outcomes, they can launch and operate their ecosystem. This process will involve planning and testing the ecosystem design and piloting the market play. Key activities also include designing the architecture, risk matrix and vendor landscape to ensure the market play can scale.

In today’s competitive business landscape, companies cannot go it alone. They need the help of partners that bring unique capabilities, data, customers and industry knowledge that can be a source of innovation. Industry leaders are recognizing the power of ecosystems—a proven construct that can drive growth. – TradeArabia News Service

Tags: ecosystems | Accenture |

calendarCalendar of Events