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AUTHOR

George Achillias

CDO

2017-03-01

| George Achillias

INSIGHT

Beyond the buzz words

In our days, companies are wrestling with how to engage with their customers differently.

Customer segmentation and what are known as customer journey maps are common ways to engage with customers, enabled by mobile, social and so-called big data insight into what customers care about. 

An ecosystem perspective extends how to engage with customers; it places the customer in a broader context of interaction – of the various types of ‘blurring’ that a combination of technology evolution, business model innovation and behavioral expectations create.  

There are different types of ‘blurring’ that exist: between products and services, consumers and producers, virtual and physical presence, as well as across industry boundaries.  Each of these ‘afford’ new opportunities to engage with customers in new ways, from *their* rather than *your* typical perspectives.  At the same time, we live in times where we observe a strong fusion among traditional verticals. Banks start acting as a marketplace, trying to copy and adjust what Amazon did in retail, Telcos focus on elements used to be parts of the insurance vertical and logistics become a blurry thing between industries and various stakeholders.

The implications of these new ways of engaging are significant on the capabilities – what we call ‘the new 20%’ of critical capabilities critical to capture the new sources of value and consequently, which business ecosystem to engage in and how to do so.  

Insight into business ecosystems and how to engage, if not architect them, is as relevant for small and medium-sized businesses as it is for larger ones. 

The reason has to do with the need to build these businesses in such a way to take advantage of the new sources of opportunity – and wide range of capabilities – that business ecosystems catalyse, orchestrate and execute. 

A simple analogy is to consider why the vast majority of small businesses never get off the ground.  Even though they may have a great idea, they have no sense for how distribution works. The result is a great idea and a great product with no way to make it to the marketplace.

Similarly, but with far greater complexity, a business ecosystem provides myriad points of entry, and roles to perform, where small businesses can tap into and become part of much larger sets of capabilities and opportunities.  If the small business is not built in a way to take advantage of the ecosystems model it will quickly die off, as though it were cut off from its oxygen.

The phenomenon will be not being unlike that of the industrial revolution, mass manufacturing, the advent of utility grids and centralized power, or even the emergence of the Internet. In each of these cases the laggards who dismissed the new trend were left in a position where they simply could not compete in a cost-effective manner in anything other than small niche markets.

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