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How digital ecosystems are transforming tech businesses

ClientSide’s latest episode rounds up all the best bits from our recent webinar. Featuring Chris Brown, Ash Mohd and Dona Haj, our expert panel is made up of globally recognised stakeholders and specialists in how digital ecosystems can transform businesses. Dominant players in the digital world, such as Amazon, Apple, and Facebook are just a few examples of how digital ecosystems can multiply a company’s value.

Transcript:

Speaker 1:

This is ClientSide from Fox Agency.

Speaker 2:

Hit it. That’s what I’m talking about. Wait. Okay. Now from the beginning.

Nathan Anibaba:

My name is Nathan Anibaba, and you are listening to ClientSide by Fox Agency. On behalf of everyone at Fox happy 2022 and we hope we have a fantastic year ahead. Thank you so so much for listening to our podcast last year, we’ve had a great lineup of guests and this year is no exception. We will be talking about the future of work, the metaverse, and how the technology landscape will change as we learn to live with the pandemic, as well as all of the topics that you loved from last year, including digital transformation, cyber security, as well as go to market strategies for the best tech firms in the world.

Nathan Anibaba:

However, before that, we thought we’d revisit a topic that was really very popular in 2021, ecosystems. This is the recording of our latest webinar with Chris Brown Transformation Lead at IBM, Dona Haj Head of Ventures and Tech Ecosystem at MathWorks, and Ash Mohd People Engagement Leaders at Accenture. This is the audio recording and we explore what ecosystems are, how they create value, and how the best businesses in the world are capturing that value at the moment. Ecosystems will be a huge way that companies create and capture value in the future. So please enjoy this fascinating conversation on creating business value from digital ecosystems. Thank you. Thank you very much for being here. So let’s jump straight into our first question ecosystems, as we all know, have the potential to change the way that most businesses operate today. So question to Chris first and foremost, what is the ecosystem, and why are they emerging now?

Chris Brown:

Yeah, sure pleasure. So I think the first thing to say is in my view, the game-changing and I say that in the same way as mobile phone and the internet have changed the way society allows us to connect and reach, interact and create an expectation around the connectedness that we all have. I think ecosystems are the same for enterprise and I say that because they allow enterprise to move away from creating value only within their own integrated value chain, but towards creating value with lots of different enterprises in a more holistic value chain. They are moving relationships beyond the transactional or the tactical to a basis of continuous collaboration, co-creation, and open innovation with partners within that ecosystem network of enterprises.

Chris Brown:

It’s creating new ways to organize, to create value. That value is greater because it’s drawing on the collective intelligence, the capability, the technology of all of those enterprises within that network and as a result can create much greater value. I’d also say that they are fostering cooperation and trust amongst enterprise in a way that allows the network effect to take hold. What I mean by that is the ability to scale and grow in terms of the opportunity that’s available because of that network.

Chris Brown:

I think the second part of your question was, so why are they emerging now? I think for me the answer is they’re emerging because of the competitive advantage that they give. If I refer to some of the recent IBM research that was done during the pandemic those ecosystem leaders outpaced other organizations five to one in terms of revenue growth. So for me, why wouldn’t you, therefore, embrace an ecosystem if it’s going to give you that competitive advantage? Then I think there are just some hygiene factors that have also allowed ecosystems to become much more permanent and prominent. The fact that industry boundaries are blurring, but also the fact that development and technology and openness of technology is allowing organizations to collaborate in a trusted and secure way through digital platforms. For example.

Nathan Anibaba:

Thank you, Chris. Dona, anything to add?

Dona Haj:

From my end, I can say in terms of my definition in terms of how ecosystem operate and what are they, they’re basically a group of companies and organizations and entities that come together to collaboratively offer a product or a service. I think on the basis of that, there is like Chris said is the win-win aspect. So it wouldn’t be about only gaining value to my organization and operating in my organization in a silo. It’s more about creating a win-win partnership. The ecosystem doesn’t succeed if every participant in this ecosystem provide value and feels that they’re getting value back. Of course, ecosystems come in many shapes and sizes. It could be two companies, three companies coming together, or it could be more. If we take Amazon, for example, they have I believe around close to 70 partners as part of an ecosystem. So it could come in any shape and size, but the core of it is the win-win aspect. Who’s coming together, identifying the stakeholders’ map that I operate in, and thinking how I can add value and gain value from that ecosystem.

Nathan Anibaba:

Thank you, Dona. Ash?

Ash Mohd:

It’s hard to follow from both of them, but the key thing to say here is that clients and customers are having disparate needs and there’s multiple transformations happening. So as we move more from the digital era, which is what 10 years ago, and to the next one, which is more of an exponential era, what’s happening is for clients to deliver what they need to their customers and for customers to actually get their whole thing, transformations and everything require these large digital companies to either build their own ecosystem or develop partnerships, to run the transformations at scale. Also, make sure that you deliver the right kind of value as we move on to the next stage.

Ash Mohd:

Why is it more important right now? It’s not that ecosystems are new. They’ve been around for a while because Salesforce is like 20 years old for instance. But it’s just with COVID the need accelerated. Companies needed to run their whole digital transformation a lot quicker. So these ecosystem companies are able to deliver at that speed and scale and companies have just literally started the whole transformation thing. Like things that everyone on this panel have been advising and saying, “Hey, you need to start doing this.” They’re just like, “Right. We need to do it right now.”

Chris Brown:

And I was just going to add, I think COVID highlighted the fact that actually having an ecosystem in place, it gives increased operational resilience. I think that’s why I was seeing those strong ecosystem players drive good growth over the COVID period.

Nathan Anibaba:

Thank you, Chris. So that prompts me onto the next question, which is how does it change the nature of business as it has been done? How will ecosystems change the way business is currently today? How does it change the way new products are created? How does it change the way we go to market? How does it change the way that we run our organizations? Could you give us an idea of how fundamental businesses will change as a result of the way that we implement ecosystems? I’ll go with Ash to start this one.

Ash Mohd:

All right. So when you think about partnerships coming together, they’ve existed. You may have a massive SAP transformation going on when you also are moving and migrating things to the cloud. So you find these partners working together quicker to deliver things to clients without stopping the existing work that’s going on. So what essentially is happening is it’s more about the speed-to-scale aspect here that’s going on. How does it change the nature of business? It’s more to do with how can you deliver value to the customers while giving them customized and tailored solutions to drive these transformations? I’m speaking about the bigger players, of course, but that’s generally the game there.

Nathan Anibaba:

Dona, have anything to add?

Dona Haj:

Yes, of course. So, for us, if I take example, the startup ecosystem that I operate in, so it’s an ecosystem that we’re very active in, and for us in order to be part of this ecosystem or to have our foot in the door, we need to think about the main purpose, which is supporting startups. So what defines startups? Defines them speed and agility and flexibility and we need to be the same. We need to try to be the same in return. We have to adapt ourself as an organization being part of this ecosystem to set the standard and be in the same level of other players as well.

Dona Haj:

So for example, in terms of on a concrete level, what we do, because we know that startups operate in a specific speed and they have limited resources as well. What we do in order to be part of the ecosystem, we provide our products and tools, and technical expertise in a discounted price and offer free. This is an order, and this is a big step for us because we’re not used to this business model, but for us, in order to be part of this ecosystem, we try to be adaptive and adapt our business model to this ecosystem and to this nature of business.

Nathan Anibaba:

And Chris, how will ecosystems change the nature and the fundamental way that the business is done today?

Chris Brown:

So I think we’ll see a couple of shifts and I think we’ll see businesses starting to think beyond business process towards how do we create extended intelligent workflows. I think we’re seeing businesses move from thinking about internal governance to, okay, how do I orchestrate an ecosystem, and what open management styles do I need? I think we’re seeing a shift from organizations and enterprises thinking about how do I just control my assets and skills to how do I share those capabilities, collaboration through different platforms. I think we’re seeing a shift from what was historically a four-wall infrastructure to much more open digital architecture. Then as Dona mentioned there’s a big part of ecosystems is the change in the business model and therefore a shift from how do we reduce risk and have clarity on the reward to how do we create business models that have shared risk and reward and deliver value in the long term.

Nathan Anibaba:

So if the business model is changing and this leads us onto our next question. If the business model is changing, talk us through how value is created, how value is captured by all of the players in the ecosystem, and talk about from the consumer’s point of view or the end user’s point of view. What is the value that they’re getting from this new business model that’s that has been created? Considering that you’ve just answered that one Chris, I’ll start with you for this one. Where is the value created? Where is it captured assuming that we have these new business models?

Chris Brown:

So it’s a great question and I think you’ve got to first be clear in terms of what type of ecosystem are you looking to establish, and what’s the driver behind that ecosystem. On one hand, are you looking to drive cost out the business? And therefore it’s all about reducing your OPEX through IoT and a much better supply and integrated value chain. Always about growing new sources of revenue and if it’s about growing new sources of revenue, then those leaders that are doing that very, very successfully, they’re the ones that are owning and controlling and orchestrating that customer relationship in finding ways to constantly innovate, to delight the customer and give additional value, additional offering capability.

Chris Brown:

So that it’s much easier for them to interact with you rather than with many. But I also think it’s worth recognizing that within that ecosystem, there are still different value levers to be had for all that are involved in the ecosystem, such as access to data and the ability to make better decisions through that data, as well as access to better technology or processes within that ecosystem. I think it’s important to think of that value in the holistic sense because it’s only through thinking of the value in a holistic sense that you create that win-win environment, where everybody within that ecosystem is finding additional value. As a consequence, therefore, the ecosystem and the network will grow and the value that can be created and delivered becomes even greater.

Nathan Anibaba:

Ash, anything to add?

Ash Mohd:

When you look at this, there are multiple errors, actually. Some of the solutions providers on one level could be partners with the delivery and with the delivery guys to deal with the clients. Sometimes they can be competitors. So there is that level, but when you look at ecosystem systems as well, you also find things like, say you’re running a customer service aspect. You may have one partner taking care of that while you’ll have yet another partner bring in the AI element and then delivering this across scale. That’s just an example and if you want to talk about the customer area, which you brought up earlier, I think customers have really… Let’s take the consumer industry, for instance, customers have really specific tailored needs.

Ash Mohd:

You might say, I want this particular block of cheese with specific peppers or something like that. Now, when you think about large transformation, large manufacturing companies, they’re not really built for these kinds of things. So when ecosystem partners come in, they can actually deliver client value by helping them with these modular transformations, both digital and physical, depending upon the partner solutions. Also, the customers who are looking for these tailored products can get that. That’s just one of the examples I’m just throwing out there.

Nathan Anibaba:

Great. Dona? Thank you.

Dona Haj:

I think in terms of the main impact that ecosystem create on the end consumer, it would be around expectations. I think end users now have higher expectations from companies and they have higher expectations from the service and the product and that translates and replicates in from segment to segment and industry to industry. I think industries that operate under a strong ecosystem, they end up providing better products. If you take, for example, the finance sector, the digital transformation that happened in the past few years with finance and financial services, we, as a result, as consumers get much better services. And that came from the fact that regulatory bodies came together, tech companies, startups, investors, research institutions, they came together, worked together in an effective manner, added value, and gained value in order for us to get at this service at the end. I think that’s definitely an example in terms of how an ecosystem can impact the end result or the customer at the end of the way.

Nathan Anibaba:

And that’s a great example that you share from financial services because I think all our lives have been impacted by the revolution that’s taken place in financial services over the last handful of years or so. So from a competitive point of view, then, I mean, you mentioned the fact that a number of these ecosystems partners’ collaborate together in order to, I guess, create deep, sustainable, competitive advantage. Talk about what the impact will be for those organizations that don’t find themselves in an ecosystem, who don’t collaborate in these ways. Do you think that those people that are outside of creating ecosystems or being part of ecosystems themselves will find themselves in a less competitive environment moving forward? Talk a little bit about from a competitive standpoint, how does being part of an ecosystem help organizations maintain that sustainable, competitive advantage? I’ll start with Chris for this one.

Chris Brown:

So I think ultimately it will, and that’s not to say that a business can’t be extremely successful if it’s not part of an ecosystem, let’s be clear. But what I do think though, is what you’ve heard us say so far is that what ecosystems do is they give you access as an organization, as an enterprise to capabilities, innovation, skills, intellectual property, operational resilience that you wouldn’t necessarily have if you weren’t part of that ecosystem. Therefore my hypothesis and logic would be that if you have access to all of these additional skills capabilities, intellectual property, then by implication, that’s a competitive advantage. Therefore if you are a business leader not operating in an ecosystem, then I would see the opportunity to become part of an ecosystem and orchestrate one or join one as a great opportunity for driving growth. As we said, it can be either to drive new revenue or it can be to take operational cost out of the business also.

Nathan Anibaba:

Fantastic. So leading us now onto the question of, we heard from Dona a moment ago from MathWorks and she’s given us a really great example of how MathWorks help their clients. Chris and Ash, maybe we can turn to you now, and maybe you could share some examples of the sorts of organizations that maybe we’re either familiar with or maybe we’re not so familiar with. Who are the best organizations now that are getting value from ecosystems? Paint a picture, share some case studies with us about the best organizations that are delivering value right now. I’ll start with Ash for this one.

Ash Mohd:

All right. So when you’re looking at large-scale transformations, it’s usually, I would say large manufacturing companies obviously see a clear advantage of using different ecosystem partners because they are looking for specific solutions in certain areas, which all need to be interconnected. So what the value they get is they get tailored solutions that match their specific needs in an area. Say, if it’s a supply chain kind of thing, you’ll see a supply chain transformation going there, which connects nicely with a finance transformation. While they’re probably going ahead within the supply chain thing itself, another logistics connection. So these organizations they get value because they’re reducing their time spent.

Ash Mohd:

They’re also reducing the cost because when you look at the operational model if they have fewer people working on the automatable tasks, who can then be leveraged to run other processes and things in the organization. It’s not about reducing automation. It’s more about diverting resources into the right areas and we are seeing not just companies in manufacturing, we are seeing companies in automotive. We’re seeing companies in financial services, across the industries where usually is the bigger players. When it comes to the smaller players, it’s more like they need to start with one or two partners at most and build it out kind of thing.

Nathan Anibaba:

Dona, aside from MathWorks, can you share any other examples from any other industries that you feel are getting value from digital ecosystems?

Dona Haj:

Yeah, definitely. I think an industry like the automotive industry is gaining value in the past few years because they are changing the nature of their work. So for example, we’re seeing more and more automotive companies and OAMS collaborating externally with startups and research institutions. So they’re rethinking the way that they operate and they’re saying to themselves, instead of us setting our own R & D teams and building everything from scratch, why don’t we go out there and scout for innovation externally and collaborate externally with startups and emerging companies that have the expertise in place and have the knowledge in place and have the innovation in place. I think we see that in many examples in automotive driving, in driverless driving, in EVs. Many of the trends now that are emerging in automotive, they’re all based on that startup corporate collaboration.

Nathan Anibaba:

Thank you, Dona. Chris, anything to add?

Chris Brown:

So I think technology also. We benefit from ecosystem. If you look at what is the market share? About one trillion? There’s a market opportunity and the key players have got a market share of maybe three to 5% and that’s really relevant because what that says is there’s just a huge amount of capability that’s out there in the marketplace and no one organization can have access to all of that innovation. Therefore from a technology perspective companies like IBM and Accenture and others actually accessing the innovation of other technology providers and being able to orchestrate it in a way that brings all that value together in a more complete way for our clients is something which is dramatically changing the technology industry also.

Nathan Anibaba:

If in the next 10 years, digital ecosystems are ubiquitous across a number of industries let’s say, what factors do you think would’ve contributed to make that happen? I’ll start with you Chris for this one.

Chris Brown:

So I think we’ve touched on many in terms of expectations around customer-client expectations. Now we’ve touched on the dimension of the competitive advantage that it gives and the access. But I think a key enabler to all of that is, and I think as you said it before we’re going into an era of exponential change and that exponential change is because of technology and the rate and pace of innovation and collaboration that is now enabled because we have open architectures, we have hybrid cloud, a real focus on open source software and collaboration in terms of developing capability. So I think a fundamental enabler that’s allowing that acceleration is the fact that we can co-create and collaborate in a way that is both trusted and secure because we’ve got the technology enablement to allow that.

Nathan Anibaba:

If, as you say, the market opportunity is [inaudible 00:25:04] which is a staggering number and there are a handful of players that have captured a very small part of the market now. Ash, who do you think the winners and the losers will be moving forward if they’re not able to capture as much value as they would like in this large market of… I’ll stop there, but who do you think the winners and losers will be? And what factors will enable the winners to win and the losers to lose?

Ash Mohd:

Well, I’m not in the business of predicting the names of winners and losers here. But I will say that the companies that start with innovation, working with disruption, and then building transformation on top of that, they would be the overall winners. We’ve been seeing this happen in the last decade. COVID is an accelerator. It was a disruption that led to these massive transformation projects going on. Like a simple example is you wouldn’t have doctor’s appointments virtually until about a year ago. When we were talking about having these kinds of transformations, it was just like, you’re not going to do it. Getting NHS to completely switch to Teams that’s not the kind of thing that you’re just expected to happen within just a few weeks. These kinds of changes have been happening. So the winners will most likely be the companies who are agile and ready to adapt from the innovation and disruption point to work on the transformations while collaborating with the whole ecosystem partnerships. I think that should be a start for your answer at least

Nathan Anibaba:

Dona, who do you think the winners and losers are going to be here?

Dona Haj:

I think generally speaking, regardless to the ecosystem context is the ones that are going to be customer-obsessed versus product obsessed. We’re seeing more and more companies who put in the core of their operation the customer. And they rethink, and they reshape the way that they operate according to that, rather than being focused and fixated on their products and how their products should and will work. I think, and this is where ecosystem come to the picture because if you focus on your customer and your end-user, you will aim to provide the best experience to them and you do that by partnering with others, by other delivery providers, or by other service providers that could help you gain that goal at the end.

Nathan Anibaba:

Thank you very much. So moving on to our last question now, guys, which is really about the role of leadership in creating ecosystems, or at least fostering ecosystems within their organizations. Chris, talk about what advice would you give to executives who are responsible for building their own ecosystems or at least partnering with other players? What principles should they keep in mind? What are the risk factors if they want to build a really successful ecosystem?

Chris Brown:

My advice to business leaders looking at how to explore and develop an ecosystem is to think about six questions and six considerations, which is, what is the value that you’re trying to create through the ecosystem, which we’ve touched on already. Are you trying to take cost out? The example that Ash gave in terms of manufacturing. Or are you trying to grow new revenue sources? Secondly, I would be thinking through what are the operating model changes that are needed to be able to seize the opportunities identified? And it’s interesting, some of the research that we’ve done around organizations, which are ecosystem leaders, 42% of them quote lack of agility as being an impediment to driving growth and success. So that lack of impediment is because of the operating model. So you’ve got to think through what are the operating model changes that will allow you to seize the value capture opportunities.

Chris Brown:

Thirdly, sorry, I think you’ve got to think through how as a leader, can I reinforce the culture and foster a culture of collaboration and co-creation not just within the organization, but also within that extended ecosystem? Then I would also say you have to be clear in terms of how you’re going to operate in that ecosystem in terms of governance, how you’re going to measure success in terms of performance, and how you’re going to foster to build new networks to grow and advance that ecosystem. Then no surprise with all change I think you’ve got to take a view and be very flexible and agile in the way that you implement it. Then the final consideration again quoted very clearly by the research and the findings of those ecosystem leaders, think about how do you enable that future progress. What I mean by that is, think about how do you invest in open technologies and architectures that will further allow you to collaborate as that ecosystem grows in scales.

Nathan Anibaba:

Thank you. Dona, what advice would you give to executives?

Dona Haj:

I think we still see many companies and many organizations trying to replicate the success that big companies have done like Google and Amazon, but they still struggle because ecosystems and building ecosystem, it is complex. It’s not a straightforward thing and I think defining the right approach to capture the maximum value for them, it is challenging. How do you measure success at the end of the day? That’s the main question that we get from executives. I think companies, when they set up their tech ecosystems or digital ecosystems should be guided by three main questions about themselves and their goals like Chris said. What do we bring to the ecosystem? Do we bring data? Do we bring knowledge? Do we bring expertise? Do we bring funding? Do we bring connection? What do we want to get from the ecosystem? Do we want to improve our customer experience?

Dona Haj:

Do we want to improve our delivery experience? So what is it that we want to improve? What problem are we trying to solve? Also, how do we interact with others in the ecosystem? I think that’s a very important question because a lot of people miss on that, so okay. I identified the right stakeholders in my ecosystem, and then I know what I want, and I know what they want from me, but how do we interact with each other? Is there a platform that would bring us together? Is there any specific physical space that brings us together? A workspace? So this is a question as well, that is critical for the success of the ecosystem. I think very important that we embed also in our organization’s cultural aspect, that would help us also be part of an ecosystem internally and externally.

Dona Haj:

That would be being open to collaboration and sharing and investing resources like Chris said, to allow us to collaborate and share because not every organization is open for collaboration. And flexibility you have to know that failure, it is part of the process. When you collaborate with ecosystems with other people in the ecosystem, you’re not in control of all the factors as if you will, if you were operating internally. So you’re not in control, you need to be open to failure and you need to learn from failure. Again, and the third aspect I would look at is that looking at the picture and the long-term result, and rather than focusing on the short-term aspects because seeing impact from ecosystem takes time. It’s about looking at the bigger picture rather than the short term. Thank you.

Nathan Anibaba:

Thank you for that. Thank you, Dona. Ash, you have the final word. What advice would you give to executives?

Ash Mohd:

Though lots of great points from Chris and Dona here. So I would like to start with what Rachel Botsman said that trust is a relationship with the unknown, and that’s something that leaders need to exemplify because if you’re looking at the relationship side, there is the client-side of delivering everything, transformations and all of that. But then there’s the entire people side because they’re the ones who are actually delivering it. If you’re a leader within the ecosystem, you have to look at both sides. So you should be an innovative forward-thinking kind of leader to drive the kind of transformation to get the kind of visions out there. But you should also make sure that the people who are involved in these transformations have the right levels of skills, have the right level of talent, especially in times of great resignation and everything. We need to make sure that companies can deliver on the promise of transformation that we promise to our clients and that’s the leader’s job to bridge these.

Nathan Anibaba:

That’s a great place to end. Ash, Dona, and Chris thank you so much for educating us and helping us deeper and better understand digital ecosystems and the opportunity in front of us. I think we’ve got a few more minutes left, so we’re going to go to the audience questions now and see if we can ask any questions from the audience. So we’re going to see which questions have come in. We have had some good ones here, so I’m going to pick some at random and fire them at you. The first one that we’ve got here is from Zach and he asks, “Ecosystems manage a lot of complexity. You’re plugged into a lot of different organizations who themselves are not static. Their systems change all the time. The customer is changing all the time, how much work is required by the partnering organization to keep the ecosystem alive and relevant?” That’s a great question from Zach. Who wants to take that one?

Chris Brown:

I might have a go. So it’s like any relationship, it takes a lot to build it, to foster it, to nurture it. And exactly as Zach’s outlined, in an ecosystem the opportunity and the benefit is the access to all of these new skills, capability, knowledge, know-how, but at the same time, you’ve got to have a way of managing how you access that in a controlled way. I think, come back to the advice I would give any business leader in terms of thinking through how to establish an ecosystem. That governance piece in terms of being clear what is your role in that ecosystem and how are you going to jointly measure success and have accountability and transparency to each other within the ecosystem?

Chris Brown:

It is really important. I also think as we all said, it is also about the people and the people being able to collaborate, but I think they have to have clarity in terms of what is it that the ecosystem is trying to achieve and what from your organization enterprise perspective you’re trying to achieve. With that clarity, it allows you to filter out the things that are changing the ecosystem, that aren’t important to you and identify those things that are.

Nathan Anibaba:

Thank you. Thank you, Chris. Dona, perhaps we can come to you with your experience at MathWorks working with growing businesses because I think Zach’s question is quite apt. How much work is required by the partnering businesses or organizations to keep the ecosystem alive and relevant and keep adding value to each other?

Dona Haj:

I think having more and more players enter the ecosystem is a good thing, definitely. Change happening in the ecosystem is definitely a good thing. It’s definitely an indicator of the success and the progress this ecosystem is making. So I wouldn’t be scared of that change. I would embrace that change and think that we’re going towards the right direction if more people and more people are joining in. I think as Chris said, being flexible and being open for collaboration is key. So how much time I would invest in this? Of course, it depends what the size of company I operate in and who in terms of who are the players that are coming to the picture. I would more focus on terms of thinking about as a leader I would think about how do I get these new players part of the ecosystem or embedded in the ecosystem better rather than just thinking or questioning, why are they here and why is change happening? Because change will happen and definitely, as I said, new players in the ecosystem is definitely a good thing and it’s not something we should be scared of.

Nathan Anibaba:

Thank you. Thank you, Dona. I’ve got a question here from Charice. I’m not sure if it’s a question. It’s more of a statement, but I’ll read it out anyway. She says, “By offering products and services that individual companies could not create on their own, ecosystems draw in more customers, which creates even more data which allows artificial intelligence to fashion even better offerings, which in turn further improves processes and wins more customers. So it becomes a self-reinforcing loop. The stronger the system gets, the stronger the system gets.” And there isn’t a question mark at the end of that, I guess it’s just a statement there to be discussed. Ash, do you want to? Are there any thoughts that you’ve got based on Charice’s sort of assertion there?

Ash Mohd:

While all of that is totally true, the good thing for ecosystems and especially the partners and players in that is the clients can look at different solutions. Think about it sort of like Jenga, you may move one piece from one partner or one client and you put another just to meet that need. It’s essentially connecting all of these things together. So yes, the transformations and everything go faster, you get more customers, and everything keeps building as per scale exponential, but it’s eventually a big collaboration brought together by different people and different entities.

Nathan Anibaba:

Thank you. Does anyone else want to add to that? Sorry.

Chris Brown:

Well, I’m just reminded by something I read not so long ago. A quote, by somebody in Shopify and they, were, I think sharing that in 2020. As an organization, they made I think it was three billion. But what they shared was that their ecosystem partners made almost four times that. So, I could already see that as a good thing to be part of an ecosystem that is driving that level of value both to the customers and also to the enterprises.

Nathan Anibaba:

Thank you for that. Guys, we’re fast running out of time. I think we’ve got time to squeeze in one more question before we end. And it’s a question from Peter and he says, although you may have joined slightly late, because I think we may have answered this already, but I’ll ask you anyway. Many businesses have experimented with creating an ecosystem, but few have succeeded. Why? Who wants to take this one?

Chris Brown:

I’ll happily start and then whoever wants to build. So some of it I think is the complexity and the fact that actually to have an effective ecosystem, you’ve got to manage in much more complex environment because you’re not just managing within the organization. You’re now managing across multiple partners and so it’s not a one for one. So trying to do something with one partner, when you add in another two partners, it doesn’t just become twice as harder it’s your question of probability, right? You’re now sort of, you’ve got the challenge of working with four partners, which is exponentially more difficult than working with two. So I think where ecosystems struggle, that they struggle because of the complexity of managing the relationships and having a collective understanding in terms of what’s the value to all of the members of that ecosystem. So that it’s a win-win.

Dona Haj:

I can add something. On a very practical level, I think also managing an ecosystem or maintaining an ecosystem require also specific skills and talent from the person who’s doing that. And sometimes the company has their own core business, which require very specific technical expertise. Sometimes they try just basically to hire the same people, to run the ecosystem for them and that’s not usually how it works because you need different skills and different background in order to maintain this ecosystem. And I could see from my experience working, I see that people that have the right business development skills and partnership skills and people skills, like Chris said are the ones who are able to maintain a successful ecosystem. And that definitely could be a reason why play a factor in why an ecosystem succeeds or not.

Nathan Anibaba:

Thank you for that. Ash?

Ash Mohd:

If I can just add, I think it also depends upon if you’re looking from the integrator side or the solution creator side. For the integrator side, you need to build all the expertise to understand and connect all the players within the ecosystem. And if you don’t have that expertise or skills or even solution mindset, you kind of lose your way. If you’re on the solutioning side, you can’t just create something that you want to create and expect that the market buys it. You have to make sure that your solution is actually specific to solving a problem. They need to come with a problem statement. So it depends upon which side you come from and usually it’s to look at what you’re trying to resolve and building that expertise.

Nathan Anibaba:

Absolutely love that. It was a great question from Pete, but I hate to end on a negative. So I’m going to ask one more question to end on a positive. So what are you most excited about when it comes to the future of digital ecosystems? To end on a positive and I’ll start with Dona. If we can keep our answers short for this one, sorry.

Dona Haj:

I think how the future will transform, how the future of how we move and buy and consume is going to change. I believe this will happen by collaboration and by flexibility and sharing expertise and innovation. So definitely all part of an ecosystem.

Nathan Anibaba:

Thank you, Dona. Chris?

Chris Brown:

So there’s a great quote I enjoy which is the future is already here it’s just unevenly distributed. And what I’m really excited about ecosystems is that the ability of them to create all that innovation and just the opportunity that it presents ahead.

Nathan Anibaba:

Thank you very much. And Ash, final word to you.

Ash Mohd:

It’s all going to be about relationships because ecosystems are connected with each other. So the future is building these relationships and then the skills at speed really.

Nathan Anibaba:

Absolutely love that. Thank you very much, guys. If you’d like to share any comments on this episode or any episode of ClientSide, then find us online at fox.agency. If you’d like to appear as a guest on the show, please email Zoe at fox.agency. The people that make the show possible are Jennifer Brennan, our booker/researcher. David Clare is our head of content. Ben Fox is our executive producer. I’m Nathan Anibaba, you’ve been listening to ClientSide from Fox Agency.

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