As the Connected Revolution continues to evolve, every traditional business has to start thinking of themselves as a technology company. Digital technology has penetrated almost every facet of people’s lives, and businesses have to keep up if they want to thrive. Enter, the mobile technology platform.
Fortunately, traditional companies aren’t at a complete loss for where to begin. They have an amazing legacy business that provides them with a goldmine of data. Part of the challenge is exposing and liberating that data. Then they need to figure out what to do with it. However, these are both problems that can be overcome.
Ultimately the biggest challenge for traditional businesses is that they need to detach their thinking from their existing business models and explore new models that will succeed in the Connected Revolution era.
To that end, we can and should start to look at what are usually called technology companies as traditional companies that have successfully embedded technology (and technology cultures) throughout the entire organization. The lessons from their success can be invaluable in helping traditional businesses figure out how to evolve.
Our September Connected Revolution report touched on this in terms of looking at Amazon as a retail company, Google as a marketing and advertising company and Paypal as a finance company – ones that also happen to be very good at technology and rethinking their traditional business models. One of the key objectives all of these “technology” companies have accomplished is to scale a platform. The role of the technology platform will be a significant part of every traditional company’s evolution in the Connected Revolution.
Think of a retail company. They have all built e-commerce platforms. But why is every retailer’s e-commerce platform limited to selling the same products they sell in their stores?
This kind of limited thinking can have big consequences for a business. Take two of the biggest retailers: Wal-Mart and Amazon. These two stores actually share similar qualities, just in different mediums: physical vs. digital. They both have a massive inventory and pride themselves on being the low-cost provider. But Wal-Mart didn’t make the leap on their e-commerce web platform to apply that same thinking. Instead, Amazon came into the picture and, at least initially, became the Wal-Mart of e-commerce websites. This is the difference that the right technology platform can make. The lesson for other traditional companies is that they need to make the evolution to a technology company – and fast. And that means figuring out the right platform.
So how can your business create the right technology platform? First, it’s important to understand what a technology platform really is.
A platform is not a product. A platform is more like an ecosystem. This is an important distinction to make. A platform is something that you need others to be a part of and build upon, whether those people are internal or external to your company, or both. A platform is also something that you need to invest in and continue to invest in without necessarily seeing immediate results. You also need to be able to view technology platforms as complementary to your existing business models, and, at times, as competitive. These ideas can be difficult for many leadership teams to embrace.
That difficulty points to one of the biggest obstacles to making a technology platform a reality. Ultimately, successfully implementing and growing a platform boils down to a company’s culture. Your leadership team is a critical part of every culture and change starts at the top. A company’s leadership needs to be actively involved in figuring out the strategy and overseeing the execution.
Finding and creating the right technology platform is just the beginning. After you have your initial platform, leadership’s job gets harder. The broader organization needs to view this platform as an asset and embrace innovation. They need to enjoy rethinking how they do their jobs through a technology lens. This culture of innovation is extremely difficult to cultivate. If leadership can’t create a broader cultural shift towards embracing technology, your platform will not be able to grow and flourish within the organization.
Looking for an example of a traditional business that has developed an effective technology platform? Look no further than GE, which is developing a platform to connect all of their products to the Industrial Internet. Called Predix, this technology platform will connect all of GE’s hardware to the cloud and enable them to quantify and benchmark their products’ performance. Predix will also help address major costs to GE’s customers like unplanned downtime by allowing engineers to check on how well hardware is performing and if components need replacing – before they break down.
This project was the outgrowth of an important shift in GE’s thinking. The company realized that in addition to manufacturing hardware, it was roughly the 14th largest software maker in the world. And now GE has over 700 people working on software like Predix.
Will GE’s leadership successfully instill the kind of innovative culture necessary for Predix to succeed long term? Time will tell. But it’s a good sign that its leadership was able to steer the company in the right direction so that it could capitalize on the newfound possibilities of the Connected Revolution.
Other traditional businesses would do well to reexamine themselves in similar fashion so that they can create the right technology platform to transform their business. (And if you need a little support, our expert strategy teams are here to help).
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