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Digital Eco Systems …

Digital ecosystems as the basis for transformation

Dig­i­tal ecosys­tems are a real suc­cess mod­el for most com­pa­nies. They offer the oppor­tu­ni­ty to make prod­ucts and ser­vices acces­si­ble across bor­ders and cul­tures via a cen­tral plat­form. How do dig­i­tal ecosys­tems work and what advan­tages do they offer companies?

Accord­ing to the Fraun­hofer IESE Insti­tute, a dig­i­tal ecosys­tem is a socio-tech­ni­cal sys­tem in which com­pa­nies and peo­ple work togeth­er. Although the par­tic­i­pants are inde­pen­dent of each oth­er, they ben­e­fit from work­ing togeth­er. At the cen­tre of a dig­i­tal ecosys­tem is a dig­i­tal plat­form that enables cooperation.

Fundamental factors for the success of an ecosystem

  • The cus­tomer takes cen­tre stage
    Suc­cess­ful dig­i­tal ecosys­tems are cus­tomer-cen­tric. This means that the ser­vices offered aim to make the cus­tomer jour­ney as pleas­ant as pos­si­ble. Infor­ma­tion is per­son­alised. Larg­er com­pa­nies gen­er­al­ly have a slight advan­tage here because they have more dig­i­tal touchpoints.
  • Data as a deci­sive fac­tor
    In a well-func­tion­ing dig­i­tal ecosys­tem, large amounts of data are avail­able that can be used for analy­sis pur­pos­es. This data pri­mar­i­ly relates to cus­tomers, part­ners and busi­ness process­es. This ben­e­fits an improved cus­tomer journey.
  • High agili­ty
    Dig­i­tal mar­kets are devel­op­ing extreme­ly dynam­i­cal­ly. This makes it all the more impor­tant for com­pa­nies to react agile­ly to changes and flex­i­bly adapt their own dig­i­tal ecosys­tem. Oth­er­wise, there is a risk of los­ing cus­tomers to com­peti­tors. Agile work­ing forms the basis for rapid deci­sion-mak­ing in order to inte­grate new tech­nolo­gies and estab­lish dig­i­tal busi­ness models.

Dig­i­tal ecosys­tems now exist in many indus­tries. The large selec­tion of prod­ucts and ser­vices as well as the ease of use offer high added val­ue. This is the rea­son why suc­cess­ful ecosys­tems are grow­ing rapid­ly. The best-known exam­ple is prob­a­bly Ama­zon with its numer­ous sub­sidiaries and part­ner com­pa­nies. How­ev­er, the estab­lish­ment of a dig­i­tal eco sys­tem also rep­re­sents a prof­itable busi­ness mod­el with high devel­op­ment poten­tial for small and medi­um-sized companies. 

These sys­tems are based on dig­i­tal plat­forms. They com­prise a wide range of ser­vices that are devel­oped in a user-ori­en­tat­ed man­ner based on the data obtained. All stake­hold­ers involved are con­nect­ed via a com­mon plat­form. These offer great ben­e­fits through the inte­gra­tion of var­i­ous ser­vices. The col­lec­tion of user data offers eco­nom­ic ben­e­fits through key fig­ures for the com­pa­ny and the basis for cus­tomer reporting.

The typical phases in the life cycle of a digital ecosystem

There is still no sen­si­ti­sa­tion to the top­ic
The typ­i­cal start­ing point for many small and medi­um-sized com­pa­nies that have not yet dealt with dig­i­tal ecosys­tems is the impe­tus to look at how they work and the advan­tages and disadvantages.

A plan exists
The first thing to check is the fea­si­bil­i­ty of your mod­el. Many com­pa­nies that already have plans for a dig­i­tal ecosys­tem are work­ing with tech­no­log­i­cal or eco­nom­ic assump­tions that have nev­er been scrutinised.

The chances of suc­cess were analysed
The ecosys­tem should be reduced to the absolute­ly nec­es­sary func­tion­al­i­ties. Bring­ing the sys­tem online more quick­ly and thus receiv­ing rapid feed­back from users helps to run through sev­er­al iter­a­tions of the sys­tem in a short space of time and opti­mise the system

The ecosys­tem is live
In this phase, every­thing revolves around bring­ing as many new par­tic­i­pants into the ecosys­tem as pos­si­ble. This con­cerns end users on the one hand and part­ner com­pa­nies on the oth­er. Among end users, ear­ly adopters need to be won over, i.e. peo­ple who use new tech­nolo­gies much ear­li­er than the mass­es and thus act as opin­ion leaders.

The first growth phase is com­plete
Dri­ving growth and func­tion­ing, even if the sys­tem only has a few par­tic­i­pants at first, brings the first net­work effects, such as the acqui­si­tion of new part­ners who have been recruit­ed by exist­ing part­ners. Sim­i­lar­ly, end cus­tomers tell each oth­er about their pos­i­tive expe­ri­ences with their plat­form and thus pub­li­cise the project.

Aim of a digital eco system

The aim must there­fore be to large­ly auto­mate all process­es and there­by ensure the scal­a­bil­i­ty of your dig­i­tal eco sys­tem. The orches­tra­tor or oper­a­tor takes care of day-to-day oper­a­tions. They ensure that the eco sys­tem func­tions as it should and rec­ti­fy any faults prompt­ly. The col­lec­tion and analy­sis of cus­tomer data also falls under this area in order to improve under­stand­ing of cus­tomers and the company’s own users. Part­ners pro­vide cer­tain prod­ucts, ser­vices or tech­nolo­gies with­in the dig­i­tal ecosys­tem that are use­ful for both the plat­form own­er and its customers.

A well-func­tion­ing dig­i­tal ecosys­tem offers you as a com­pa­ny a wide range of oppor­tu­ni­ties. The more part­ners and cus­tomers become part of your dig­i­tal eco sys­tem, the more pos­i­tive net­work effects will result. The prin­ci­ple can be explained using the exam­ple of the tele­phone: With the intro­duc­tion of a sin­gle tele­phone, the device has no ben­e­fit. This only aris­es through the pro­duc­tion of a sec­ond tele­phone. Now two peo­ple can com­mu­ni­cate with each oth­er. The num­ber of pos­i­tive net­work effects increas­es with each addi­tion­al tele­phone. This ben­e­fits users, phone man­u­fac­tur­ers and net­work providers alike.

Sources:
AHD Proact, 2022
What are dig­i­tal ecosystems

Fraun­hofer IESE Insti­tute, 2020
Dig­i­tal ecosys­tems and plat­form economy

IT-Matchmaker.news, 2020
ERP as an enabler of dig­i­tal trans­for­ma­tion, Dirk Bin­gler

Dirk Bin­gler has been involved in the Bitkom asso­ci­a­tion since 2014. His top­ics are the future of ERP sys­tems and their impact on dig­i­tal­i­sa­tion. He has over 20 years of expe­ri­ence in the inter­nat. envi­ron­ment at Siemens AG.