• Iryna Manukovska

[Digital Service Platform] in 2021

What is a digital service platform? From a technical point of view, it is just a set of all tools and solutions for customers. In general, it is a mind-shifting approach - start to think about what additional services can be provided to the clients? How to make a customer's experience better? How to build sustainable relations with all business' stakeholders?

Digital Service Platform
"It's not 'us versus them' or even 'us on behalf of them.'… it has to be 'us with them'", Tim Brown, IDEO CEO.

The first digital service platform forerunners were branded marketplaces & one-stop-shops for relevant goods. Such kinds of solutions can be seen worldwide from utility service companies to manufacturers and suppliers. Platforms gained popularity from entrepreneurs and investors because they give the opportunity to build a successful, sustainable company around them. But it still was all about delivering what you have, not serving your customers.

The pandemic economy showed us the importance of being flexible with our business - from remote work to service design thinking. We all understood that grocery it's not a place where you buy milk; it's a provider of possibility to buy it. So you can buy it or pick up in a brick-and-mortar store, or order delivery it to your doors. Restaurants are not about the food itself; it's the possibility to eat fancy food without mess and need to clean up and buy all tricky ingredients. Even making an order in a restaurant is a service - you can do it via a waiter or make it with your iPhone by using a QR code.

QR menu application example

What is the Most Crucial Part of Any Service?

Usability and convenience for this particular customer are the right words for it. In previous days customers' segmentation was too generalized and was based on social demographics criteria. Now we know that it doesn't help a lot when you need to understand your client, increase LTV Lifetime Value or decrease CAC Customer Acquisition Cost. Client behavior and context data analysis will guide you to find your customer's micro-segments and what they are used to doing.

The big question is - how to satisfy customers? How to make customized services for them and to understand do they need any? Can digital transformation manage this particular area?

How to drive new revenues and increase real business value? Transform its business model!

A business model is a way a company creates, delivers, and captures value in economic, social, cultural, or other contexts. It's everything about making a profit. Digital platform-based business models are considered to be among the most profitable and sustainable ways of growth for a company. The digital service platform (DSP) - is a single ecosystem with a set of connected digital services that enable stakeholders to fulfill multiple needs. DSP can provide facilities for employees, customers, suppliers, partners, community, and government. One place to meet demands and wants for all who are valuable for business.

2021 has made migration to the platform economy and digital service approach even faster. Every business from billion dollar corporation like Amazon to SME is looking for any additional services to provide. Due to pandemic limitations we all are looking for digital services to launch on top of our products. Just like Amazon did with delivery of pharmacy goods.

Customers want valuable solutions for their problems and appreciate companies that deliver them with 75% higher loyalty. The bad news, clients are seeking fast innovations.

"It's no longer the big beating the small, but the fast beating the slow" - Eric Pearson, CIO, INTERNATIONAL HOTEL GROUP.

That's what business competition is all about in 2020. Airbnb, BlaBlaCar, Deliveroo, Google, TaskRabbit, Uber. All of these brands are based on digital service platforms - a technology-enabled business model with a network effect. It facilitates interactions between groups of suppliers and consumers on a common online service platform and connects end-users with producers for mutually beneficial transactions.

Today, almost every market has a leading digital service platform. These solutions have one thing in common - people like them and promote them voluntarily; it creates a friendly feedback loop; technology helps to make it work autonomously. It is all about ecosystem building - third-party firms and individual contractors can outflank the traditional supply chains and labor pools required by old-fashioned companies.

Digital Service Platform Ecosystem

Digital Service Platform Components

Technologies are developing fast; solution requirements are getting stronger. Digital service platforms need to have built-in business support systems (BSS), campaign management systems, digital contracting, customer interaction management and tracking, etc. It sounds like solid advice and a piece of a job for years.

According to Gartner basic digital service platform layouts are, and it's almost impossible to cover them all inside one organization:

  • Information systems platform. Supports the back office and operations, such as ERP and core systems.

  • Customer Experience Platform. Contains the main customer-facing elements, such as customer and citizen portals, multichannel commerce, and customer apps.

  • Data and Analytics Platform. Contains information management and analytical capabilities. Data management programs and analytical applications fuel data-driven decision-making, and algorithms automate discovery and action.

  • IoT platform. Connects physical assets for monitoring, optimization, control, and monetization. Capabilities include connectivity, analytics, and integration to core and OT systems.

  • Ecosystems platform. Contains all functions of the predecessors and supports the creation of, and connection to, external ecosystems, marketplaces, and communities. API management, control, and security are its main elements.

Our 15 years of business automation experience showed that the most effective way to deliver a highly complicated solution - to start from Minimum Valuable Product (MVP). Implementing the core business process and customer-oriented add-ons, which will generate more value for your clients, and modern fast-code automation platforms can decrease solution delivery time up to 47%. This will help you gain customer loyalty and develop your relations during the whole life.

4 Key Moments to Pay Attention at While Choosing a Digital Platform Architecture

#1. Omnichannel Business Process Management

The client can start to communicate on Facebook, make orders and payments, pick up the delivery in the brick-and-mortar store. We are getting to use such simple, convenient and fast solutions. But for the digital service platform, it's essential not only to provide a fancy toolbox for clients' services creation but connect all client's interactions and history in joined storage - CRM-like components.

#2. Microservice Orchestration

Scalability and third-party applications freedom of choice are good companions when you are starting something valuable and huge. Microservice applications are created as a set of components. This architectural style perfectly fits large-scale systems and makes changes and product updates and extensions for programmers less time-consuming. It is much easier to understand, test, and maintain them. Time-to-market decreases and flexibility are growing.

#3. Real-Time processing

Instant inquiries and events management. What we all value the most of its time. We can buy it, and we need a lot of it to cover all our needs from business activity to friends and family relations. Digital platforms allow a variety of instant services, from campaign management to omnichannel communication. Most importantly, all transactions are stored and are easy to access.

#4. Decrease human involvement in service providing

AI, Robotic Process Automation, and Chatbots relieve stress from routine queries response, leave the space for social relations, and communicate where they are still needed. The next challenge for artificial technologies - become assistive and deeply personalized to imitate people better.

The potential of AI still doesn't work in full - the area of improvement lies in a connection between end-users and their transactional data to different digital services and functions.

Platform-Based Business Examples by Industries

  1. Aggregation Platforms (information, products, or services). and those who need it to provide a service under one brand. We know them as marketplaces and broker platforms like eBay, Alibaba, Uber. The last one unites people who want to earn money on their vehicles and those who prefer comfortable transport at an affordable price. Since 2009 it has covered 300 cities and got a place among the most valuable companies in the world.

  2. Social networks. They started with connecting people of common interest; now, they provide a variety of business facilities. This year Facebook launches e-commerce solutions for small businesses, gives access to data analytics, advertising, and business knowledge.

  3. Mobilization Platforms. Help to focus on moving people to work together to achieve a long-term shared goal. It can be used as a basis for processes like supply networks or distribution operations. One of the early examples of this kind of platform is Li & Fung — a company that provides a global supply chain by connecting suppliers/vendors with brands and retailers to meet consumer demand.

  4. Learning Platforms. They bring participants (teachers, learners, parents, etc.) to both beneficial information exchange and cooperation to grow their knowledge and skills. Udemy is a great example with its 30 million students and 50,000 instructors teaching courses in over 60 languages. This marketplace doesn't own the products or services provided by instructors on the website but charges a commission for a vast audience. This idea brings Udemy $28 million in revenue annually.

Digital Service Platforms Future Insights

Today, almost every market has a leading digital service platform. These solutions have one thing in common - people like them and promote them voluntarily; it creates a friendly feedback loop; technology helps to make it work autonomously. It's only a starting point for platform-based businesses. So what is going to be next?

Mixed Business Models

Digital technology power, data, and market competition can turn more and more platform companies into hybrids. Digital competition is responsible for it. Unlike in the traditional economy, companies require expensive physical assets to create their business models. In the digital world, companies can multiply with a clever combination of data, software, and ecosystem strategies.

High-Level Innovations

Advances in big data analytics, machine learning, and artificial intelligence help organizations to do more things with less investment, including building businesses that were impossible in the past. Although AI is still in its initial stage. IBM, Google, Apple, Amazon, and others are no longer treating the technology as fully proprietary. Now they offer their AI capabilities as-a-service that third parties can access and use for their applications. A mix of platforms with higher data capturing possibilities and ongoing progress in cloud computing will allow future platforms to enable a wide range of new applications.

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