As the urge to make new markets takes hold, is an open, ecosystem approach the answer?
CEOs are twice as likely to say new business-building is a top priority than in the past two years, according to a new report from McKinsey. In fact, 80% say these future endeavors will help them respond to shifts in demand — largely to sustainable products and services.
By 2026, then, leaders expect half of their revenues to come from businesses that haven’t been created yet, states the report. So urgent is the pace of digital transformation that plans might exist on a paper napkin (or perhaps not at all).
With future business-building now a priority, what’s the first step to planning for business creation and market-making? Collecting and sharing data-derived insights about customer needs can help these future endeavors respond.
Don’t make a market alone
New ideas don’t exist in a vacuum. Collaboration is a favorite method for generating new ideas and solving problems, and organizations are looking outside their walls and building ecosystems to bring ideas together, achieve success and make new markets. According to recent research from IBM’s Institute for Business Value, this idea is getting traction, with participation in new partnerships growing three-fold. What’s more, some 63% of executives now encourage new ideas from outside their organizations.
Much like a coalition, the ecosystem is an idea that separate organizations or groups can come together in a web of partnerships; but rather than having a political aim, they exist to share data and resources in exchange for providing a service or value.
Today’s ecosystems are looking to seize new markets as massive challenges demand a deeper alignment with major players. State Bank of India, for instance, partnered with over 100 e-commerce sellers to address the needs of a dynamic market. Together, they’ve grown their YONO (You Only Need One) platform to include a digital bank, an online marketplace for third-party offerings and a digital financial store for joint venture offerings — which together see over a million daily logins.
Ecosystems can turn to hybrid cloud to help drive open innovation
Once ecosystems form, members need to build trust and share data, and to make that work, they need to embrace degrees of openness. Hybrid cloud can help smooth out co-creation across all the players in an ecosystem by making data they need for accelerating discovery more accessible to all. In fact, compared to peers, IBV research shows 40% more open innovation leaders see hybrid cloud as driving future innovation.
For example, technology company Schulmberger turned to a hybrid cloud solution to overcome data silos in the largely transnational oil and gas industry and help customers share data and more easily collaborate across borders. With full interoperability now available for global energy operators, Schlumberger’s customers will be able to access DELFI, its collaborative platform for energy exploration and production — even from in locations where local data requirements can impact use of public cloud.
It’s crucial for partners to be able to trust each other, especially if they compete in other endeavors or want to make international commerce less cumbersome. A blockchain consortium such as We.trade Innovation, a joint venture of financial institutions and other partners, is aiming to make international trade more trusted, secure and seamless for their customers in 16 countries. Participating merchants gain the extra security of knowing each other via platform entry granted through their banks.
The cost of shutting the door
Taking an open approach to innovation might require a cultural shift for some organizations but avoiding it altogether could have consequences. The same IBV research showed open innovators with strong ecosystem engagement had a 59% revenue growth rate premium over organizations that go it alone. Conversely, those that lack open innovation were behind their innovative peers in employee productivity (67% less), new products and services (76% less) and customer satisfaction (78% less).
Businesses everywhere have entered a new era of digital re-invention, fueled by innovations in hybrid cloud and artificial intelligence (AI). IBM is uniquely positioned to help our clients succeed in this radically changed business landscape by partnering with them to deliver on five levers of digital advantage: predict and shape data-driven outcomes, automate at scale for productivity and efficiency, secure all touchpoints all the time, modernize infrastructures and transform with new technology-driven digital business models.
Learn more about how market-making platforms and ecosystems combine innovation with openness. Get the new IBV report: The Virtual Enterprise: The power of market-making platforms and ecosystems to explore three ways they succeed through connectivity, partnerships and open technologies.
The IBM Institute for Business Value delivers thought leadership and insights to drive business value.