Ecosystems, Automation and Interdependent Capabilities

Ecosystem business strategies involve emerging, changing, and evolving patterns of interdependence between businesses, which are designed to maximize the value of working together. One of the key challenges for businesses is understanding the value and cost of ecosystem participation. For example, Amazon provides the following illustrative list of value drivers to participating sellers in their ecosystem:

• Marketplace for B2C and B2B

• 300 million active users (potential customers)

• 1.5 million active sellers (vibrant market)

• 353 million listed products

• Instant and automated website

• Storage of inventory

• Shipping services

• Customer service

• Returns management

• Shipment tracking

• Marketing services

• International product sales

• Secure payment systems and processes (B2C/B2B)

• Banking services (credit/debit cards, corporate line of credit, expense management)

• Web Services

All of these services have value and can be added up and compared with the costs and benefits of alternative ways of receiving services. Leaders will need to understand the aggregate value they are receiving from every ecosystem they participant in. This is a challenge as many businesses are participating in dozens of ecosystems, but having this clarity is critical.

Ecosystems and interdependence also have costs and associated risks. The recent privacy policy changes that Apple unilaterally implemented costs ecosystem members approximately $280 billion in lost market value — at least temporarily. The fact that ecosystem participants are “interdependent” means that the value, cost and the risks are shared.

Increasingly, ecosystem participation may not be an option for businesses that cannot support a sophisticated level of automation, integration, algorithms, and artificial intelligence capabilities. The phrase “We are only as strong as the weakest link,” is relevant in this context. To maximize the value of the ecosystem, the ecosystem orchestrator will need to find value in the automated delivery, intelligence, and speed of services. This means that the real definition of interdependence in many ecosystems is: codified and automated processes, integration, ML and AI.

A holistic view of an ecosystem’s health and value considers the sum of all value participants bring to the ecosystem. If some participants support automated AI-driven processes while others can’t, then the entire ecosystem suffers as all are interdependent. To maximize the value of an ecosystem, all members must be integrated, aligned and able to support automated and unified processes so process specific decision-action loops (ability to make decisions and act) are compressed to their maximum efficiency level.

The bottom line is that an increasing number of business opportunities will require companies to join ecosystems to take advantage of them. These ecosystems will be competing with other ecosystems. This competition will push ecosystems to embrace automation, integration, and the use of algorithmic decision-making capabilities across all participants. If a business is not able to support them, they will lose out on opportunities that require this level of interdependence.

It is no longer just about your enterprise. It is about supporting sophisticated, intelligent and automated processes across an entire network of interdependent businesses to maximize the value for all participants in the ecosystem.

Read and watch more on ecosystem strategies:

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Kevin Benedict is a thinker, futurist and writer. He serves on the Future of Business team at TCS, and meets with executive teams globally.

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Kevin R Benedict

Kevin R Benedict

Kevin Benedict is a thinker, futurist and writer. He serves on the Future of Business team at TCS, and meets with executive teams globally.

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