Platforms on Platforms: Innovation by subtraction

One of the competitive advantages of Digital Transformation is that it empowers an organisation to rationalise (or subtract) processes to innovate the customer and employee experience. So as organisations face new economic and competitive challenges how can adopting such capabilities benefit them?

Disruptors like Amazon and Uber have transformed markets using a global approach that removes the need for customers to use locally based, often more expensive incumbent competitors. This advantage is generated by their high volume, fast turnaround digital platform services that enable them to achieve economies of scale that drive greater choice and better prices for customers.

One wonders what further opportunities could emerge for “innovation by subtraction” delivered using Digital Transformation

In response, we have seen incumbents imitate this platform model such as Sainsbury’s intended integration of Grocer and Retail Catalogue propositions through its acquisition of Home Retail Group (that owns Argos). Such a move not only increases the level of choice Sainsbury’s can offer to match Amazon but also offers it other advantages in terms of more efficient logistics and faster deliveries (Argos, like Amazon, offers same day fulfilment).

Yet one wonders what further opportunities could emerge for “innovation by subtraction” delivered using Digital Transformation to disrupt sectors further – not just for engaging more demanding customers, but also to capitalise on increasingly fluid labour market dynamics like the Gig Economy.

Such a model potentially confers a range of co-opetitive benefits including deeper engagement in the Sharing Economy

Could the next disruption be “Platforms on Platforms”? This is where a disruptor creates a digital platform that enables a customer to consume personalised services from any competitor through one channel, effectively removing or subtracting the inconvenience or restrictions of engaging only a single retailer? Price comparison websites, for example, are an established form of the “Platform on Platform” concept, yet they arguably lack the ability for a customer to pick and mix offerings from different retailers into one truly personalised shopping basket.

Such a model potentially confers a range of co-opetitive benefits for contributing retailers – including opportunities to sell to previously unreachable customers, logistics efficiencies and deeper engagement in the Sharing Economy popular with millennials.

Organisations creating “Platforms on Platforms” to further disrupt their sectors or markets could become a key strategic trend over the coming years

Low skilled and temporary workers could also benefit from using a “Platform on Platform” service that pulls together in one place shift opportunities or short term assignments available during the same week (or even day) from different – potentially competing – organisations. Given the anticipated impact of automation, high wage costs (like the National Living Wage in the UK) and greater demands for labour flexibility, such a service could materially benefit these workers in the emerging Digital Economy (while also removing the need for employers to search and procure such flexible people resources independently).

Organisations creating “Platforms on Platforms” to further disrupt their sectors or markets could become a key strategic trend over the coming years. But to master this new form of competitive advantage will require innovation by subtraction using Digital Transformation.

If you would like more information about how digital transformation can benefit your organisation please contact the Sopra Steria Digital Practice.

Published by

Mark Howard

Mark advises on user centric digital service design & transformation with a focus on tangible business benefits realisation. His passion is helping organisations to transform how their people use digital ways of working to interact with users to deliver an seamless, integrated customer experience. Mark’s recent private sector experience includes delivery of a mobile application prototype for a European business services company and advising a major UK high street retailer about using enterprise social media tools to drive competitiveness. Mark has 10+ years consultancy experience advising blue chip Telco, FMCG, Retail and Pharma clients as well as UK Central Government. Mark holds an MBA from Open University. www.linkedin.com/in/mark-howard-mba/

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