Today, all companies must have a Business Platform whether or not they know it. In fact, they all have a platform of some kind, even if it’s not the best one possible. The industry has seen a shift from “pipes to platforms” as written by Sangeet Paul Choudhary. How can you build the best business platform in the world? Do you need to?
“There are two broad business models: pipes and platforms. You could be running your business the wrong way if you’re building a platform, but using pipe strategies.” – Sangeet Paul Choudhary
When I first wrote about the Modern Enterprise in 2010, Software as a Service had hit its stride and people were starting to decouple hard linked IT systems to use Internet based systems. I had just started my research into the Modern Enterprise, and over time I added to the contexts (People, Processes, Information, and Systems) and the responsibility areas (Sales & Marketing, Products & Services, Finance & Accounting, Operations & Infrastructure, Research & Development, and Leadership & Management) to better encapsulate the business of business today.
The biggest insight that I validated through the interviews with entrepreneurs and leaders in a variety of firms and teams in tech, non-profit, is that the modern enterprise was first and foremost a network of everyone in a business: employees, contractors, vendors, clients, past clients, prospects, etc.
A business is a network of people coordinated around processes: a Business Social Graph.
That means that all businesses must build platforms to succeed. Building the best business platform in the world is not an easy job. It’s as hard as building the best business in the world. Today, these monumental goals are synonymous. The technologist must be a co-equal in the vision, design, and creation of a company otherwise the company will not survive. Either the founder is a technologist at heart, or is lucky to work with one who shares responsibility in the success or failure of the modern business.
What is a Business Platform?
The Business Platform allows a business to operate by coordinating the different processes and activities through technology. It is the system of systems that for example helps a business get its customers or clients, deliver the value either by coordinating the delivery of a product or a service, and get paid. More formally using the Modern Enterprise framework contexts:
A Business Platform is a collection of systems that help people communicate knowledge of processes through information.
5 Reasons Why to build a Business Platform?
The main reason you should consider building your business platform or rather assembling it is because it will allow you be competitive in a landscape where others maybe just using what’s available. Here are some other reasons why.
1. Talent is Global and People will be Remote.
If your business is not using remote talent directly from the around the world today, it is definitely using it through your vendors. Just as the world went from having servers in their back office closet to using the public cloud, remote on-demand workers and teams are the best way to get things done when you can’t find talent locally.
How do you build a business platform to coordinate these people from around the world? People say “use the cloud.” Sure, that’s a fine answer, but is it the answer you can use to do something?
If the future allows people to add their value to your business and society from wherever they live as I spoke about in my TEDx talk Feeding the Family with the Digital Farm, then a truly great business platform will do what it takes to bring the best people together to maximize the business’s potential to society.
2. Others do certain Processes Better.
Don’t reinvent the wheel! The economy flourishes when more people specialize and do what they do best. We depend on others to do things we don’t want or need to do. Amazon and Microsoft provide great public clouds. Salesforce makes a great CRM. Datastax provides a great commercial Cassandra. Why reinvent the wheel? If a business that already exists and has a platform that your business can connect to, you don’t have to steal the idea, yet. Use it to do what you couldn’t do over night and then when you have enough resources, innovate to do it better.
3. Connecting & Correlating Information creates Potential.
By building a business platform, you are bringing together not only people, and processes, but the information as well. This creates opportunities to do things you wouldn’t be able to do before.
These opportunities can come in the form of insights into your customer’s behaviors across the enterprise. How did a customer go from being a lead to a customer, to a client, to a referring client, to a raving fan? What are the patterns? All businesses are different and not every business records customer activity in a CRM ( all of them want you to ).
4. There is no perfect Platform for your Business.
By connecting different platforms to make yours better is working smart not hard. What if you use Nutshell for a CRM, JIRA for Delivery, Freshbooks for invoicing, and Quickbooks for accounting. Seeing the customer and team experience throughout the platform and analyzing how to best serve them would make life easier for everyone. Happy team means happy customers means more customers.
Think about if your team and your clients had the same experience that Uber gives riders and drivers. Seamless signup, on-boarding, and ongoing experience.
Since there is no perfect platform for your business, you need to assemble one that matches your need today and have a process for continuing to build and maintain it as your company grows.
5. Technology will Make or Break your Business.
Bill Gates said that technology is like a magnifying glass. It makes good better and bad worse. The business platform is an approach to getting to efficiency, but it’s not all about the technology. The actual quote is :
“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” – Bill Gates
If your business is inefficient, technology will not help. If you think about your business platform, it has to begin with efficiency. The whole purpose of a business platform is to be the most efficient solution to helping run the business.
5 Examples of Wildly successful Business Platforms and their Unique Value Proposition.
These are some of the most well known examples of business platform success and their main reason I think why they are where they are.
1. Amazon
Selling books to selling everything, connecting suppliers to buyers. Now one of the premier Infrastructure as a Service ( IaaS ) for their own Technology Platform as a Service offerings and for other Technology Platform companies around the world.
The best at reducing the cost for the customer.
2. Google
Search platform which then started selling ads to the highest bidder on the Adwords marketplace. Now provides a platform for business software & similar services to Amazon Web Services.
The best at organizing information.
3. Uber
Initially a platform to provide black car service to riders and from drivers. Now provides delivery of food, and wheel chair accessible vans for handicap. They even have a service to hail taxis.
The best at driving people & things from point A to B.
4. Ebay
Initially an online auction site for people to bid on and buy things from other individuals. Now a platform for companies to sell their goods online as a channel.
The best at bringing individual buyers and sellers together.
5. Salesforce
Initially Salesforce was just a CRM, but as they grew, they opened their platform to developers to make applications for the business users on their platform, not just on their software.
The best at bringing business application / software developers to business buyers.
We will analyze these and more later to glean patterns and practices that you can adopt in your business platform design.
Steps to Start Designing a business platform.
You were probably wondering how to start building a business platform after seeing those examples! Building the best business platform in the world isn’t an overnight task. It requires time and effort from leadership within an organization and different multi-disciplinary skills. Here’s an overview which I’ll expand more in the series.
1. Inventory
Take an inventory of your organization using different visual tools such as canvases for Business Model, and Modern Enterprise.
2. Visualize
Draw a visual diagram that shows how your different Teams connect via Processes.
3. Document
Document the major processes and how information is used in Processes.
This will get you to see your whole business in one picture and allow you to see redundancies and inefficiencies that you couldn’t see before. Once you have clarity of your pain points and potential bottlenecks, you can continue.
4. Design
Design connections between Systems that currently store information for each of the Processes. Some of these connections may be to synchronize where other times these connections publish or syndicate information.
5. Eliminate
Consolidate & remove redundant Systems where they make sense.
6. Connect
Integrate through proven strategies towards a Data Warehouse, an Enterprise Service Bus, and a Data Processing Engine.
Having made a breakthrough in scale and efficiency with one major iteration of your platform, your goal would then be to stretch this version to it’s limits and gather as much insight for the next iteration.
7. Maximize
Maximize the value to the customer by maximizing the potential of the teams. An efficient and happy team will do their work better, faster, and cheaper.
8. Measure
Continuously monitor each process metric and correlate investment to return.
9. Invest
Invest in the right metrics to grow the right numbers.
What’s Next? Is there more?
Business is complex. Business owners all want to get the client, deliver the value, and get paid. They are all different. No one platform is really ever enough for a business, because the leaders and owners of the business have their own vision of what they want their company to do. All businesses are different.
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