Ecosystems - from opportunity to capability. A playbook for CSPs.
🔰 This guide helps product managers, business architects and marketers build capability models for the CSP enterprise. These capability models can be used to evaluate business models, architect technology, and estimate effort to achieve ambitions.
Before we start, some essential definitions
This guide uses ‘ecosystems’, ‘opportunities’ and ‘capabilities’ in a specific context.
- Business ecosystems are formed when participants generate value by interacting with each other. These interactions can be captured and represented as ecosystem maps. Business architects use these maps to assess if an opportunity exists to participate as a CSP.
The purpose of an ecosystem map is to uncover available opportunities
- Opportunities are derived from an ecosystem map based on current and future relationships between players in the ecosystem.
To make good on these opportunities, we almost always require new capabilities.
- Business Capabilities are well defined set of assets and attributes that an organization must possess in order to fulfil the promise of an opportunity. These attributes may include capability dimensions such as people, process, information or technology.
Why is this playbook needed?
Business architects and product managers at CSPs are always exploring new business models. Possible approaches include vertical integration and strategic partnerships to address new markets for services.
Increasingly however, an outside in approach is needed for CSPs to explore participation in ecosystems where a number of stakeholders engage in value creation for the benefit of all participants.
And it is inside these ecosystems that dynamic relationships create opportunities that cannot be addressed via linear partnerships.
Some factors that bring on the need for ecosystems approach to markets include;
A changing landscape of industries overlapping and disrupting one another and spawning new markets
A ‘do it all’ approach does not always work especially when CSPs should really be partnering to deliver value
Many new markets are lateral and cannot be effectively served with linear partnerships
Gravitating towards ecosystems is not easy for CSPs or their partners as they have together been evolving in a hub and spoke mode of doing things.
Ecosystems are open and discretionary
Ecosystems present a more fluid act of value creation. Participants are not necessarily suppliers but rather act as many differentiated roles within a continuum. Many times ecosystems act as their own governance bodies allowing participants to play by the rules.
Ecosystems serve broader customer needs
Ecosystems address variability in products and services by specializing across a number of participants who deliver value to end consumers.
Today’s products and services evolve constantly in scope. They don’t stick to scope limitations. The dynamic product portfolios are constantly experimented on to validate market proof.
Add to this monetizing challenges, efficiency to address reach and scale and the need to address uncertain customer demands.
Ecosystem participants in collaboration with each other and with a net benefit to all, serve these broad, dynamic needs without restrictive short term partnerships.
Ecosystems address time to market
Whether its first mover advantage or getting the timing right to scale in ‘winner take all’ plays, time to market can be a driver for ecosystems approach to market making.
Ecosystems are essential levers for B2B2X business models
Two sided marketplaces are quintessential ecosystem plays. However many more business models like pureplay b2b and b2c can also benefit from ecosystem approaches.