By now we are all familiar with the promise and vision of the internet of everything (IoE) so I won’t dwell on how solutions are enhancing industries, societies, individual lives and the planet. But I will dwell on its impact on business, because IoE demands not only new business models, also largely heralded, but it also requires completely new thinking about interactions, market requirements, capabilities and shared risk and reward. No single organisation can deliver an IoE solution end-to-end; it inevitably needs to collaborate with a variety of partners if it is to take a place at the IoE table and get a slice of the multi-trillion dollar pie.
We’re talking here about the ecosystem economy. A new era that requires IoE stakeholders to eschew a lot of what they have known and done for the past.. well, forever! Companies each play a part in delivering a complex digital solution to an end user, each contributing their expertise, a certain capability or series of capabilities. Value is created together in true synergy where the sum is far more than the parts. It’s about interconnected, interdependent business and it’s the next step in the evolution from M2M to IoT to IoE and now, what we are calling Value Ecosystemsand which we define as a new business and operating paradigm in which value is created jointly by partners, innovation is unbound, and in which risk and reward are shared.
The big question now is: How do you create, integrate and manage these complex ecosystems of partners required to deliver sophisticated digital, connected solutions? Or, in other words, how do you architect a value ecosystem?
Ecosystem-based business implies developing new capabilities and deploying existing capabilities both at organisation and ecosystem levels, meaning that it must be clear to all value-adding participants who is responsible for what. Many IoT requisites have been broadly mastered including digital platforms, APIs, various new business and revenue models, etc. There are also areas that still need a lot of effort though, like partner onboarding (as well as full lifecycle management and offboarding), adopting a collaborative and innovative mindset and culture across an organisation, learning to share risk and reward, identifying new weak points and opportunities for revenue leakage and fraud, billing, charging and settlement considerations, addressing vast security and privacy threats, managing customer experience across an ecosystem, brand management, market positioning and marketing in such a context… All of these areas imply a new attitude towards transparency, open collaboration and rethinking competitiveness.
With the challenges of governance and business model interoperability for sustainable ecosystems looming, some have alluded to a role of ecosystem “orchestrator” or “curator” who would oversee interactions, provide overarching governance and resolve any issues arising. As a global non-profit neutral industry group, TM Forum has explored this idea across a series of workshops with stakeholders from every facet of IoT and digital ecosystems, and we’re keen to find our your views.
- Is this is viable?
- Which sort of partners would be well adapted and positioned to take on this role?
- Might be other solutions such as using distributed ledger technologies, automation and AI?
As the economy based on value ecosystems continues to evolve, grow and gather more and more participants, it will have to mature with seamless, frictionless transactions and predictable patterns and outcomes. The proof of concept phase of IoT is drawing to an end and scalability, or rather mass-market adoption is nigh, but this can only happen, and companies will only reap the benefits, once business model transparency and interoperability are assured, once transactions are harmonised.
To build and sustain this new economic paradigm based on value ecosystems, we believe a single view is vital, and an Ecosystem Business Architecture would form a vital foundation to sustain it. Stakeholders and partners must use a common language to avoid ambiguity and potential economically disastrous misunderstandings, so terms and concepts should be clearly defined and standardised. Roles and relationships should be documented and mapped in line with business capabilities. Along with these, value chains, value fabrics and value streams should also be mapped within the ecosystem of partners, as should data flows. Weak points should be identified and mechanisms accounted for to secure them. Stakeholder business models should be transparent and examined to ensure compatibility and sustainability of the ecosystem. And of course the underlying enablers must also be considered, the enterprise architectures supporting the business.
Along with members and the broader IoE community, we’ve begun building such an Ecosystem Business Architecture mapping out a series of real life business scenarios to later draw commonalities and provide guidelines and blueprints allowing all parties to facilitate entry to, strengthen and sustain the value ecosystem economy. McKinsey predicts that by 2025, 30 percent of global GDP will be represented by ecosystems – stakes are high and no one can afford to be disrupted and left on the side of this mega super highway.
If you’re interested in taking your place as a market- and thought-leader, being part of this pioneering initiative, can help you do that, so why not get involved by joining in TM Forum’s collaborative work?