The CIO Imperative: How does technology underpin ecosystem transformation?

Three broad factors bring ecosystems to the CIOs attention and will shape the technology strategies that ensure their success:

1. An ecosystem’s ability to address and accelerate business outcomes and identify opportunities, as well as its ability to integrate different technologies.
2. The seven distinct ecosystem business models that CIOs can use to drive growth and create value.
3. The ecosystem’s multi-partner structure that can quickly drive innovation, value and growth, by combining the particular strengths of each partner and by sharing brand credentials to enhance the final product.

Business ecosystems address a wide range of strategic business issues and challenges. They are being used to enable growth, make operations more efficient and manage risk. According to The CEO Imperative: How mastering ecosystems transforms performance, companies with more than five ecosystems reported 1.8x more revenue growth and 2.1x more cost reductions than those with less than two.

CIOs and their teams have the opportunity to make their organizations the partner of choice as ecosystems grow. By adopting a platform approach, with extensive application program interfaces (APIs) and connectivity capabilities, an organization can rapidly onboard new partners while leveraging the full power of the ecosystem model.

A further variable for the CIO is that not all ecosystems are alike. We have identified seven distinct ecosystem models that companies are using. Their selection is defined by the:

1. Level of competition
2. Level of market dominance
3. Commercial model

Each model presents a different set of technology parameters for its members’ CIOs. A primary differentiator is the dominance of the ecosystem leader. 

In symbiotic and marketplace models, dominant technology leaders act as standard setters and platforms for other participants. The CIO’s role within this model, is to create a powerful technology platform that can onboard disparate partners, while integrating data and keeping it secure.

In the more decentralized governance of the co-optive or value chain models, multiple CIOs must reach a consensus on data standards, interoperability, and cybersecurity. CIOs must recognize which system (or systems) they are operating under and the technology model it drives.

The greatest challenge for CIOs operating within an ecosystem can be the model’s participant structure. CIOs find it difficult enough to integrate data, drive common standards and maintain security within the boundaries of their enterprise. Challenges – technical, people and governance – can increase in a multi-participant environment of the business ecosystem.

Data integration

A powerful asset of successful ecosystems is the combined data of the participants. For example, a well-integrated model will create a cohesive experience for the combined customer franchises and include the offerings of each ecosystem member. Common taxonomies, integration standards, visualization and artificial intelligence (AI) will be required.

Interoperability and cloud

Ecosystem participants will each have different systems, devices, applications and communication networks. Participating CIOs will need to agree on common core standards and then build out the interfaces that enable systems to talk to each other.

The key to this dilemma will be a common cloud platform that embraces the platforms of all of the ecosystem’s members. This platform enables the ecosystem orchestrator to integrate data, set level standards for interoperability, and build a shared data fabric. The common platform will also enable a hybrid-cloud structure that meets the highest security standards of its participants. Cloud is an essential platform for the successful ecosystem.

Cybersecurity

This is an area of zero compromise. Multiple cyber-systems can present weaknesses and vulnerabilities to hackers. Breaches can then enable access to the core systems of the participants.  Here, ecosystem operators should work to adopt the strongest available zero-trust protection capabilities, not adopt the least common denominator amongst the participants.

Technology talent

In today’s business climate, all organizations are finding it a challenge to find the tech talent to staff their internal operations. The ecosystem IT team cannot be an orphan group of part-timers or second-best team members. They need to be of a skill level that matches or exceeds the standards of its participants.

2. Construct a strong technology orchestrator function

A strong, respected and accepted central function will be required to propose trade-offs, decide common standards, and maintain strong security for all. The ecosystem IT function must be empowered to drive internal change.

3. Build to the highest common standard

Participants will inevitably come to the organization with different levels of digitization and systems. In general, you cannot ask the strongest to compromise on systems and networks that integrate with their own. Build to the highest common standard. This is particularly true in cybersecurity.

4. Leverage the data of all

Make the most of the combined data of the participants. Integrate from all sources, build common analytics and merge rich data sources into a single view of the customer and combined analytics. Combined data can be one of the greatest assets of the ecosystem.

5. Use technology to make your company the ecosystem partner of choice

Establish ecosystems as a core competence of the organization. Use a platform approach to make ecosystem partnering rapid and effective. Integrate easily and leverage the data of all participants. Make your company easy to connect and share data with, and the most capable of managing common technologies issues that may arise.

Conclusion

There are clear challenges – technological and otherwise – in making ecosystems a success. However, given the high adoption rate of ecosystems across almost every industry, avoiding these challenges is not an option for CIOs.

The larger picture is that ecosystems can create dramatic success for companies – in revenue growth, operating efficiencies and managing risk. These rewards can far outweigh the challenges of getting there. Creating excellence in ecosystem technology can be a strategic and operational driver of success in today’s complex and ever-changing business landscape.