DIGITAL PLATFORM.
TRANSFORMATION OF
DIGITAL PLATFORM
A digital platform is an established device erected on
present-day cloud technology that makes the evolution of
software or programs easy. It is, nevertheless, not a product in
itself. The services, applications, and solutions on the platform
are the products that you as a customer will interact with and
pay for.
As of today new business opportunities in a digital platform
are emerging rapidly which opens up new job opportunities. All
entities regardless small or a large organization is considering
this opportunity to jump to digital platform as soon as possible.
AI, block chain, cyber security and data analytics together brings
a new and big on the practice of accounting. These new
technologies have become prominent as must haves’ in modern
business by using cloud technology that will change the way
they interact with clients.
Digital platform can separate the professions current life
from a potential new one filled up with possibility and untapped
potential and they are transforming finance functions and the
role of the accountants and provide a lot of job opportunities.
Digital platform can ease the work of labors as everyone is going
digital to do everything. An increased use of digital platform
changes the fundamental nature of works. Digital labor platforms
will increase the global Gross Domestic Production by
enhancing productivity and providing job seekers to jobs easily.
Digital platforms are creating new opportunities where
professionals are authorized to work together in a hasty way like
never before as digital platform drives constant changes. They
are brimming with fresh ideas and bring the best result at
minimum cost & risk with increased efficiency, safety, and
convenience. Gradually, but firmly all accountants are learning
these advance digital platform technologies to stay relevant to
the competitive market and perform as per their client
requirement.
Block chain is the new emerging technology which is
secure on digital platforms and could verify transactions between
ecosystems on a digital platform and eliminates the need of
lawyers and notaries. This digital platform and new technologies
in it would reach deeper in the accountancy profession. This
might increase the chance of employment in all businesses.
Digital platform is the key to your business growth and it
works worldwide. It will improve and increase product services
which will further create new clients. This technological
advancement have changed both business owners and
accountants for better, and it would give easy report creation and
sending, centralized access to tax information, document storage
and uploading, a single portal that you and your accountant can
view. Using digital platform saves a lot of time and efforts on
accounting like a burdensome task can now be easily completed.
How platforms disrupt the incumbents
Platforms create very intense competition for legacy
products, which just can’t compete with the near-zero marginal
costs that platforms offer. The authors provided two examples of
this competition: newspapers and the Internet; and SMS
messaging and WhatsApp.
Newspapers and magazines struggled with the rise of the free,
perfect, and instant Internet in three ways.
1. Online classified services like Craiglist (free, perfect,
instant) crushed newspaper’s classified revenues.
2. Alternative content platforms fragmented and siphoned
away their audiences. “A huge number of content platforms,
spanning every medium, topic, industry, and contributor type,
from professional journalists to freelancers to unpaid
enthusiasts, emerged as alternatives to mainstream print
media.” Content and news was now available in a free,
perfect, and instant way.
3. The growth of online advertising platforms (Google,
Facebook, ad exchanges) provided much better targeting and
ROI and reduced the transaction costs of creating and running
ad campaigns.
This triple-threat was what caused the decline of print
newspaper revenues by 70% between the mid-90s and 2013.
Another example that McAfee and Brynjolffson discussed
was WhatsApp — the smartphone app that lets users send
messages to each other via WiFi/data networks, rather than via
SMS. WhatsApp provided a much less costly way for users,
particularly in developing countries, to exchange messages with
each other. As a result, users flocked to WhatsApp which
provided free, perfect, instant messaging — and the global
mobile carriers saw their SMS messaging revenue decline
drastically.
Network effect
With the WhatsApp example, McAfee and Brynjolffson
also pointed out another important property of digital platforms
— the network effect that they often create. Even beyond lower
cost, users began switching to WhatsApp because many of the
people in their networks were already using WhatsApp.
Network effects create “demand-side economies of scale”
— meaning that bigger networks gain a significant advantage in
acquiring new customers than smaller networks.
In WhatsApp’s case, the network effect grew out of an early
architectural decision that the founders made. WhatsApp made
the decision early on to not be interoperable with SMS, a
decision which required users to install and use WhatsApp in
order to send and receive messages from other WhatsApp users.
As a result, you couldn’t simply go into your SMS inbox to
receive WhatsApp messages — you had to go into the app itself.
This created a powerful network effect for WhatsApp — the
more users in your network who used WhatsApp, the more
valuable it became for you and the more incentive you had to
download it yourself. Hence, the decision not to be interoperable
with SMS created the network effect for WhatsApp.
A touch of economics: demand and supply curves
To understand the true power of digital platforms, we need
to dive into microeconomics a little bit. You are likely familiar
with the concept of demand and supply curves.
Digital governance is a framework
for establishing accountability, roles, decision-making, and
change management authority for an organization's digital
presence. Having a well-designed digital governance framework
minimizes effort and cost and ensures digital business maturity.
It's about technology, data, process, and organizational
change. Over the years we've participated in, advised on, or
studied hundreds of digital transformations.
The six pillars of digital transformation are experiences,
people, change, innovation, leadership, and culture.
Any attempt to understand the limits and harness the
benefits of the digital era in a coherent strategy should be built
on four pillars: ethics, social fabric, the economy and security.
We all know that digital platforms are disruptive to
industries (Windows, Internet, iPhone) — but many of us have
wondered why, and how?
Andrew McAfee and Erik Brynjolffson have done a fantastic
job of explaining why digital platforms are so disruptive.
1. Free, perfect, and instant. Digital platforms take
advantage of the fact that networked information goods are
free, perfect, and instant. These properties make it difficult
for incumbent players to compete in a market. Examples
include the impact of the Internet on the newspaper industry,
or the impact of WhatsApp on mobile carrier SMS networks.
2. Network effects. Digital platforms can produce network
effects, where the value for each user in the network increases
with every additional user who joins. These “demand-side
economies of scale” mean that larger networks have a
significant advantage in acquiring customers than smaller
networks.
3. Complements. Most digital platforms have applications
that are built on top of them. These apps are complements to
the underlying platform. As the number and variety of free
apps grow, it increases the demand of the underlying platform
in two ways. First, the variety of apps increase the chance of a
user finding his/her “killer app” on the platform, which would
make the platform more valuable to the user overall. Second,
each free app nudges the demand curve of the platform out a
bit. The cumulative effect of all these apps mean greater
consumer surplus, as well as greater demand for the platform
at the same price.
Digital transformation is not only about the technology.
Sure, technology is involved, but it is only a part of what digital
transformation is about. Instead, digital transformation is more
a paradigm than a technology, and one that could just as equally
have been called business transformation, except that the
pandemic taught us that it is indeed the digital in digital
transformation that is the driver of the transformation.
Ultimately, digital transformation involves understanding
how digital technology — as a component of the organisation’s
operating model — facilitates the organisation’s business model
in such a way that it results in an enhanced customer experience
that in turn positively impacts the organisation’s relevance and
sustainability.
In other words, if a supposed digital transformation has not
created a positive impact for the customer and consequently a
benefit for the organisation, then it is just another technology
deployment that has incurred operating and capital costs but
with no customer benefit. With due consideration for cost, risk
and incremental revenue streams, the ultimate test of digital
transformation success is how it is seen through the customer's
eyes, as measured by the extent to which adjectives like
‘easier’, ‘quicker’, ‘more integrated’, or ‘more convenient’ are
used by the customer after the intervention.
Transformational oversight
Digital transformation by its nature involves (emerging)
digital technology, which can make heavy demands on the
board’s technology skills matrix as suggested in the previous
section. However, before an organisation even tackles digital
transformation, it needs to establish whether it is in a state of
readiness to integrate the new technology. Forbes magazine put
it this way:
‘A problem afflicts many companies undertaking
transformation: they aren’t ready for innovation. But they need
innovation to change their competitive positioning in the
market. Today, many companies want their IT organisations to
partner with the business to create opportunities for innovation
and supportive services that drive transformation.’
In this short paragraph, Forbes captures the challenges of
the need to transform, the state of not being ready for it, and the
need for IT to partner with business, emphasising what has been
said so far.
So how does a board assess the readiness of the
organisation for d igital transformation? Irrespective of
whether the proposed transformation is for a business unit, an
operating division or an entire organisation, readiness across
each of the three pillars of digital transformation need to be
assessed.
Operating model considerations
There are other areas of the operating model besides
people, process and technology that are impacted by digital
transformation, but let us constrain the conversation to only
considering the impact of these three components of the
operating model.
First, common to any IT intervention, be sure that there is a
common understanding of your core operating process, in other
words, ensuring there is a common understanding of how value
is created for the in-scope area. If there are gaps in the
understanding, these will need to be closed.
Next, be sure of the relationship of the functionality of the
proposed technology to the process. They will often be
mismatched. The easier way to address the mismatch is to
modify the process to suit the workflow inherent in the new tool.
The hard way to close the gap is to customise the tool. Both are
complex in their own way, and more importantly, can take
considerable resources address.
Finally, understand what changes will be required to the
capacity and capability of the team that will be impacted, noting
that having the right culture has elsewhere been identified as the
most critical success factor of any IT intervention. In particular,
the gaps will be in capability, capacity and culture, and plans
will need to be instituted to close all of these.
Business model considerations
The business model concerns the way the organisation
makes money. This usually occurs as the transfer of cash from
the customer in exchange for a product or service. The issue
here is to identify shortcomings in the application of the
business process, the supporting technology and the supporting
staff across the organisation in facilitating this exchange of
value. If not identified in advance, the transformational initiative
could amplify the impact of any or all of these gaps.
Customer experience considerations
Finally, how would the customer experience change as a
result of the transformational initiative? If it can’t be
demonstrated that the customer is better served through the
transformation as measured through the customer’s eyes, then
questions need to be asked about whether the transformation is
indeed sufficiently meaningful to the organisation.
After all, the goal of digital transformation is to increase
the relevance and sustainability of the organisation to its
customers, and if the transformation is not able to create greater
relevance, and therefore to enhance the sustainability of the
organisation, then the efficacy of the proposed transformation
initiative should be questioned.
Conclusion
Digital transformation is not an easy journey, but if the
lockdowns under COVID-19 have shown us anything, it is that
without a sound digital capability, organisations can close and
go out of business forever. In this way, digital transformation
has just as suddenly become an imperative. While boards may
not quite be ready for digital transformation, several things can
be done to increase their skills in this respect.
The first is to realise that digital transformation must start
with a readiness assessment, and the plan should be to address
these gaps before piling on the impact of an initiative of as great
strategic significance as digital transformation.
The next is to realise that the technology component
consists of three major areas – IT, data and technological
innovation — and that each of these will need the appropriate
oversight to be sure they are all aligned with the strategy of the
organisation, and that current and emerging privacy and security
concerns are appropriately addressed in the process.
Finally, realise that the IT component is actually but a part
of the overall digital transformation scope, and that appropriate
oversight needs to ensure not only that the technology is a good
fit within the organisation’s operating model, but that the digital
transformation intervention increases the enablement of the
organisation’s business model to such an extent that the
customer is delighted by the transformation, with consequent
benefits for the organisation.
Ultimately, digital transformation involves the entire
organisation, and that the technology component is but a part of
it, albeit an important part. If the director can increasingly
articulate strategic questions around the three technology
dimensions raised, as well as provide the appropriate oversight
of the impact of that technology on the end customer (through
the impact of the technology on the organisation’s operating
model and its business model), then the board will have
exercised its duty of care to ensure the success of their digital
transformation journey, and ultimately its increased relevance
and sustainability.
Platform Design is the death of inside-out strategies:
never start from your capabilities, your assets, or your identity in
designing a strategy, think instead how these can help you in
creating a strategy that serves an existing ecosystem, exchanging
value. In the ecosystem lies the center of your strategy.
A natural step of this process, is to continue to unbundle
this model of thinking, renouncing to the temptation of
“bundling” it in more complicated procedures, one-size-fits-
all solutions. The key here is to avoid creating an ever more
specialized “hammer”, because “if all you have is a hammer,
everything looks like a nail”
Interestingly, by developing this method(ology) in the last
few years, we’ve been able to get back to the essence of
principles, and here’s what we share with you today, a (first
iteration of a) list of 7 Platform Design Principles: you may
want to keep these principles handy when designing strategies
for the modern, complex, interconnected and digitally
transformed world of the XXIst century.
Consider this a first version of your Organizational
Revolutions: a short course on Market Realness, to quote, and
freely iterate, on the amazing work of Oli Anderson that I’m
digging into these days.
“Digital Platform Conductor tool” is the term Gartner is
using to describe the rise of tools that enable I&O leaders to
strategically manage across their infrastructure, regardless of
environment or location. This is a trend we are seeing emerge
from many different markets. Vendors in segments/subsegments
such Cloud Infrastructure & Service Providers, Experience
Management, Performance Analysis Tools, Data Center
Technologies and Managed Service Providers, and Delivery
Automation are all adding features for managing infrastructure
outside of their traditional scope. While many of these vendors
may want to become the “one tool to rule them all”, the breadth
and depth required to play this role for all infrastructure now and
in the future makes this impossible. Furthermore, the I&O
leaders we talk to have heard those promises before, and they
also realize a “magic tool” can’t save them.
What I&O leaders do need are tools that will work with
what they already have, can meet them at their current level of
maturity, and are flexible enough to adapt as they improve and
as their needs change. I&O leaders need a coherent view of
infrastructure across all lifecycle stages. They need to enable
workloads to flow to the right environments to meet business
needs with minimal costs and risks. Finally, they need to
demonstrate the value of infrastructure investments and have a
fact base for guiding future improvement efforts (see figure
below). While this is a lot to ask, digital business is demanding
this of I&O leaders, and vendors that can best answer the call
will be richly rewarded.
While no vendor can deliver the full scope of DPC tools in
a single product today, the capabilities needed do exist in
various forms across different markets. We expect this vision to
become reality as strategic technology trends like Distributed
Cloud and Anywhere Operations put more pressure on I&O
teams to respond quickly at scale to digital business needs. I&O
leaders are already trying to get all the different players in the
digital business orchestra to create beautiful music in the form
of compelling customer experiences. DPC tools will play an
important role in helping them do so. Please do not hesitate to
set up an inquiry with myself or my coauthors, Dave Cappuccio
and Dennis Smith, to explore this emerging space further.
A computing platform or digital platform is an
environment in which a piece of software is executed. It may be
the hardware or the operating system (OS), even a web
browser and associated application programming interfaces, or
other underlying software, as long as the program code is
executed with it. Computing platforms have
different abstraction levels, including a computer architecture,
an OS, or runtime libraries. A computing platform is the stage
on which computer programs can run.
A platform can be seen both as a constraint on the software
development process, in that different platforms provide
different functionality and restrictions; and as an assistant to the
development process, in that they provide low-level
functionality ready-made. For example, an OS may be a
platform that abstracts the underlying differences in hardware
and provides a generic command for saving files or accessing
the network.
