If you’ve read my previous post and found the time to review my latest report, “Europe’s Digital Imperative,” you’ll know just how much money digital means for Europe. (In fact, one of the reasons for undertaking the research in that report was to provide the net/net of digital transformation.)
However, as one of my previous mentors at Forrester would say, “Nice forecast. So what?”
Well, the report does show you the money (lots of it), and it walks through the major pitfalls that could spoil the digital party (see the figure below). But the real “so what” is found in the guiding principles proffered for the work ahead in Europe. The report lights up the opportunities both for organizations and for our own careers.
These principles start with the “platform” as a construct for digital innovation and how platforms are used to capture and organize the startling waves of innovation now washing across many industries today. So if I had to identify the prime factor for Europe’s digital success, it is this: Ideas and money flow around platforms. Successful digital business models pivot on this fundamental truth.
But What Exactly Is a Platform?
The problem is, while everyone talks up the platform, no one really knows what it means (trust us, we’ve been asking). The platform is, quite simply, layers of software that gather and connect multiple data sources together and synthesize them with meaning to improve a commercial outcome.
The platform can take many forms, like a car, a home, a jet engine or a toothbrush. Wrap it around a process, and the platform prescribes a much more fluid approach to innovation. Platforms are the building blocks of digital success, as they link together digital assets, products, partners and customer demand to make new services available and enable new markets (like the connected car).
LinkedIn, Google Play, Spotify and Uber are the easiest platforms to understand and the most visible because we see and use them every day. Spotify’s platform captures data (music tastes) and drives the “next best action” by using algorithms to mine the data for meaning (“based on your preferences, you should listen to this”).
An Opportunity for Everyone
The good news is, the world of platforms doesn’t belong only to digitally native companies like Spotify or Google with no real legacy stretching back decades. Established companies are now working their big-company advantages and starting to build and organize knowledge work around a platform to drive lots of value, money and innovation around them:
- General Electric: One of the best places to look for this in real life is GE, a huge industrial economy pioneer. GE is radically reinventing itself to become a software powerhouse. The company is pivoting its research and development, production, marketing and sales around the data that its engines, turbines and smart assembly lines generate, and has built an instrumented platform around those digital assets to drive new levels of insight for its business. GE is re-tooling itself for the future by turning itself into a software powerhouse. Is your company doing something similar?
- BBVA: Closer to home, Spain’s digital banking supremo BBVA is another legacy company using the power of its platform to “co-create” with fresh, energetic start-ups in the thriving fin-tech scene. Its goal: to drive social media functionality into the retail banking experience. Like GE, BBVA uses “open architectures” in its platforms, meaning that third parties are able to plug in simple lines of code to more complex apps via open APIs (interesting to see my alma mater Forrester catch on to the power of APIs). The continuous exchange of data and information to create value empowers both BBVA and its partners to iterate and experiment with product innovation or upgraded customer experience much more quickly and with higher impact than either could do on their own. This is why the platform counts.
PS. If you understand the platform, you “get” digital. Lots of new tech is dumped into the digital bucket. (What? You don’t use drones/virtual reality/automation/artificial intelligence?) But at their root, all this new tech and new ways of working create data, and it’s the data flowing in and around a platform that provides the catalyst for innovation. Watch this space …