Framework to Build Digitally Connected Software Platforms, by Veejay Jadhaw




Building blocks for transitioning from Product to a Digitally Connected Platform across any industry vertical
While Cloud, SaaS, PaaS, Machine Learning, IoT, Social Network, OpenApi’s, Big Data etc. are the underpins to building a connected digital platform, the intent of this article to share the underlying framework and how to approach building a digital platform.
Successful businesses are those that evolve rapidly and effectively. Yet innovative businesses can’t evolve in a vacuum. They must attract resources of all sorts, drawing in capital, partners, suppliers, and customers to create cooperative networks. Much has been written about such networks, under the rubric of strategic alliances, virtual organizations, and the like. But these frameworks provide little systematic assistance for managers who seek to understand the underlying strategic logic of change. Even fewer of these theories help executives anticipate the managerial challenges of nurturing the complex business communities that bring innovations to market.
In this article I intend to attempt simplifying this complexity, and provide a more practical approach to building a digital plaform connected to the relevant ecosystem.
In construction, a platform is something that lifts you up and on which others can stand. The same is true in business. By building a digital platform, other businesses can easily connect their business with yours, build products and services on top of it, and co-create value. This ability to “plug-and-play” is a defining characteristic of Platform Thinking.
The success of a platform strategy is determined by three factors:
  • Creates connection by making it easy for others to plug into the platform. This enables interactions between participants. For example, Apple provides developers with the OS and underlying code libraries; YouTube provides hosting infrastructure to creators, similarly any industry specific software platform must offer connection points and associated code libraries to create content or value added programs relevant to the industry {aka co-creation}, be it Financial Services, HealthCare, Ecommerce etc.
  • Creates a pull that attracts participants to the platform, you can leverage various form of analytics, e.g. social network to create the gravity. For transaction platforms, both producers and consumers must be present to achieve critical mass. Apple needed to attract both developers and users. Similarly, any industry vertical need to plug into the right audience channel to create attractions towards the platform. Big data and machine learning can play a big role in building this framework. Platform builders must pay attention to the design of incentives, reputation systems, and pricing models.
  • Connecting the producers and consumers fosters the flow of value by making connections between producers and consumers. Data is at the heart of this connection and distinguishes platforms from other business models. This requires capturing rich data about the participants and leverages that data to facilitate connections between producers and consumers. For example, Google matches the supply and demand of online content, while marketplaces like eBay match buyers to relevant products, similarly Financial Institutions can connect with the consumers to sell relevant products, or HealthCare technologies firm can connect patients with relevant help.  
Not all platforms should place the same emphasis on all three building blocks. Firms need to evaluate the business objective and leverage one or more block to build the platform for their industries.
We will see more and more companies shifting from products to platforms. Every business today is faced with the fundamental question that underlies Platform Thinking: How do I enable others to create value?  

Bibliography
·      Harvard Business Review
·      Wired

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