Services in the platform business
Services in the platform
business can be of many
categories. The recent trends show that all have a few common foundations.
They are designed with consumer service as the core business function. They are
enabled by network effects of consumers of the services. There are co-producers facilitating and
enabling more services around the core business. The network effects can be
scaled far and wide with technologies leading to exponential growth of the
businesses. The popular consumer platform businesses are using the web
platforms, serving communities of home owners and travelers (AirBNB), and
drivers and riders (Uber). The ecosystem forms among these communities who are
facilitating the network effects. These businesses are also challenging the
established and traditional businesses and regulations that govern these
businesses. Some of the services add new capabilities to
existing businesses. The old and new are teaming up to deliver niche services
for the convenience of the customer. For
example, Walgreens flu medicines are delivered home by TaskRabbit during the
flu season, a home service that is reliable for the needy who is sick at home.
The social media (web 2.0) and social networking add new capabilities to
existing traditional Information Technology practices used in the learning
industries including knowledge based businesses for training. Linking with
semantics, reusing the platform for different purposes is another trait of
these platform models. YouTube is used not only for entertainment, but also in
the classroom as a learning delivery model. Linkedin links professionals from
anywhere, matching profiles of knowledge professionals showing glimpses into
how organizations can connect service professionals of the world.
The consumer platform businesses are not limited to physical goods business services.
They include social services, banking and retail services, time banks, asset
sharing and rentals. Most of the
services are around the theme of expanding the granularity and the boundaries
of the services offered by the people for the people who are interacting in the
platform ecosystem. The reach of an asset is expanding via different channels -
using the web as the platform for service delivery directly to the consumer who
makes a personal decision to participate in the ecosystem. The solution is a
real time pull, personalized solution (a mobile app), not a mass push solution
delivered to your computer (email). The interactions on these apps are real
time, personalized, and have a built in feedback system.
The motivation behind these services is economic, social, technological, as well as
environmental. Compared to hiring a regular maid service, calling a
onetime helper is more economical and easier. The “help user” and “help taker”
can be co-partners in the system (for example, TaskRabbit). They can still
enjoy the luxury of hiring services with just some trust on the people that are
contributing to these services. Compared to leaving the car in a parking garage
at an airport, (for example, Relay Ride) helps renting those cars to be of
service minimizing the economic burden on the traveler – the one travelling out
of and the one travelling into the place.
Sharing assets is not new for people, the underlying
motivation could be as varied as purely economic or purely humanitarian. What has made this prevalent, is the
convenience of availability of services, and people being able to locate the
services easily through the mobile web platforms that are just a touch away on their
iPad app or on their smart phone. Considering the history of web platforms,
eBay probably comes first for connecting consumers and producers. So, what is
really new about sharing or peer production? The web as the hub (digital
platforms) coupled with smart phone apps (call them cloud services) has become
a trend and is no longer limited or contained for the wide variety of daily
needs of consumers of all walks of life. The young are attracted to the
convenience, the regulators recognize the outdated laws and regulations, the
middle are observing services expand from trading spare time (Time Banks such
as Greater Boston Time Trade Circle (TTC) ) to accommodations away from home such as AirBnB.
Dubois, E., Schor, J., & Carfagna, L. (2014) elaborate
on the time banking concept in their article highlighting the members’ opinions
on the motivation behind their social services. They are clear that the gaps
they are filling and the services they render are not possible by the current global
or capitalistic ways of running businesses and marketplaces. There is a local
need to collaborative sharing and they are doing that voluntarily. In time
banking, all skills are valued equally, time is the currency exchanged and
social relationships are their assets.
The web
technology enabled services have been evolving, contributing to the
current cloud services and web services. The transactional services are part of
what traditional IT is known for. Production oriented Services such as
networking services, infrastructure services, supply chain logistics, financial
services have been growing along with the technologies that enable them. Consider
the shared resources where everything is a service in the cloud computing
paradigm (IAAS, PAAS, SAAS). With the
cloud computing, services are delivered through the servers from the web, and
there are no assets in the premises. Then, there is the web 2.0 services
oriented towards the collaboration of people. They might be viewed as
interaction oriented services. The current consumer platforms, often heard
about in the sharing economy make use of the cloud services also called the web
services. Each of the application’s data, business process and presentation
layers have unique challenges and decisions to be made for achieving the
functionality. There are several deployment models within the cloud services
arena, each application has unique service delivery models. The details of the
cloud service delivery models topic is beyond the scope of this discussion. A cloud
services guide would cover the essentials.
There is more to the technologies that come into play in the
consumer platform business models. The mobile app services tap into the power
of mobility, user centeredness, personalization, context awareness, sensing,
embedding technologies such as search engines, GPS, RFID, NFC chips, device
interaction, and many possible unique mobile web platform capabilities in
addition to integrating with the traditional media.
Consider the evolving
Mobile Social Cloud ecosystem infrastructure as the major contributor the
consumer platform business models.
Mobile Apps don’t require
software license, they connect people and business processes to wherever you
are. It does n’t matter where the worker is, the technology comes in handy to
manage the workflow connecting with colleagues, customers, suppliers.
Cloud digital storage, pay as you
go approach are popular with small businesses for transmitting files and
documents. Salesforce, Google App engine, Amazon Web services are popular
vendors in the cloud arena. These new ways are forcing businesses to rethink
how to conduct business. Concerns of fraud, privacy and security issues are
prevalent, requiring caution.
Innovation begets innovation.
This is the promise of the information based, knowledge centered digital world.
When information and knowledge are the basis for products, one can expect
better and more useful products will eventually come to the market. Software products have the power to improve with
better versions remarkably. Things change for even better user experience and
better ways to serve the customer. Think Internet itself, think the entire
range of products by Apple, Google, and Amazon. It is because of listening to
the user and the customer, setting and acting on the trends – all reflective of
the culture of inquiry and information, the products and platforms evolved over
time attaining the capability of becoming completely digital. There is more to
this, the business organizations are reinventing themselves with the power and
characteristics of the internet. Virtual organizations are becoming part of societies where people
interact with these organizations from their mobile devices. Khan,
M. N., & Azmi, F. T. (2005) describe three main characteristics of the
virtual organizations in detail – virtuality, hyperarchy and velcro hooking.
The authors expand on each of these characteristics, providing insights on the
future business organization. Focusing on the web as a hyperarchy, a term derived
from the hyperlinks of the web, it has ability to move freely from one link to
the next. The features of hyperarchy – hyperlinked, hypertime (read real time),
richness and reach, decentralization, borderless, innovation and
intrapreneurship are the aspects of the web technologies that are demonstrated
by the applications of the mobile, social, cloud systems.
The Tata Consultancy Services (TCS) ecosystem driven
branchless banking is a cloud enabled banking service to the rural Indian daily
wage consumers. According to Banking in the Backwaters. (2010), the banking
platform allows for on the fly configurability and integration with the
platform within short periods of time to accommodate a cloud bank of an
established bank (for example, State Bank of India) to serve consumers. The
platform brings together co-partners from various fronts in providing
innovative solutions to banks enabling them with automated quick solutions with
pay per use pricing models, without the overhead of IT investments. It is a
fundamental shift from the IT developed, centralized capabilities of banking in
the banking industry’s IT departments to the capabilities from the cloud just
around where the consumer’s business is happening. This is a result of bringing
together years of expertise of not only TCS in the banking business, but also
several strategic partners such as the Tata group of companies in various
capacities including several resources.
Several personalized, patient
care applications, tools for the physician are making healthcare more
manageable on a massive scale. Caregiving has become more specialized,
attending to the patient’s emotional, physical healing along with medical
assistance with the help of applications built around the theme of service and
assistance.
The MIRROR consortium brings together 15 partners of
Europe’s TEL industry, high-quality research and testbeds with a vision to
achieve a “ a so-called
“AppSphere” a bundle of real-time, interoperable learning applications that can
be used within the collaborative and social work environment of the employees. The vision of MIRROR is to
empower and motivate employees to learn by reflection of tacit work practices
and personal experiences. MIRROR shall help employees capture experiences and
collaboratively/immersively develop creative solutions for problems that need
to be solved immediately”. For example, the DoWeKnow App is a Microsoft
SharePoint based app allows for a group of users to share their powerpoint
slides and reflect on the content. This is useful in Sales and business
environments.
From
the variety of apps Mirror have produced in the medical care arena, it is
evident how reflection on the services in the work environment will enable
innovation and solve immediate problems as they arise. For example, the apps Think
Better Care, Careflect, Carer, allow for care staff to reflect on their work
and communication with the resident. My Life Software is yet another example
that is making a mark in medical care and attention in the communities of elderly
people with dementia, prisoners of all ages with interactive and engaging
applications.
.
What do
the trends suggest?
The trend is clear. The consumer platform businesses and the
sharing ecosystems are on the rise and are here to stay. There are several catalysts
contributing to this trend. First, the current economies affecting the mindset
of the consumer of the developed countries. The growing gap between the haves
and have not’s in the capitalistic countries have been affecting the daily
living of the middle and lower income groups of societies. Corporations and
businesses (large and small) have not been able to keep their promises of a
steady employment. As large businesses, they have become even larger consumers
and suppliers of services. The consumer
of the east is stepping up the existing, cottage industries and services to
digitized services to scale up. The sociological and economic conditions in
under developed and developing countries have kept the societies in a service
mode in almost all aspects of daily living from the errand running to
travelling from several hundreds of years. Economies of many countries depend
on the service industries they have adopted and taken ownership of services
from corporate to tourism to daily errand level. The software industry technologies
of the digital world are just in time for the convenience and flexibility of
the consumer everywhere with offerings of the social, mobile and the cloud
world. The traditional businesses as well as the startups all over the world
have plenty of opportunities for taking on new approaches to solve problems
that have been limited by people’s attitudes, business processes, as well as
the not so ready technologies. Businesses of all spheres from learning to
trading realize that the consumer is at the center and the ecosystem needs to
be built around the consumer.
Villano, M. (2014) highlights Prof. Sundarrajan’s (New York
University’s Stern School of Business) view on the trends. According to him,
the next wave of opportunities will be in businesses that support the
development of sharing economy. To illustrate this point, Breeze and Evolve
Vacation Rental Network are considered as examples. Breeze supports those
people who would like to be Uber, Lyft drivers, but have no cars of their own
with week by week access to vehicles. Evolve is a supplier of listing
management services to the Homeaway rental networks. Examples such as TripMD of
India which offers services about medical care and expertise outside the USA,
Mosaic which is about crowdfunding loans in the renewable energy industry are
among the types of services that will take off as they serve as support
businesses for the companies serving large communities.
In a Wharton
article on the next phase of sharing economy, Professor Mollick points out
that the sharing services on platforms such as Uber make regulators rethink which
regulations really matter.
In a PWC
blog article, five sectors – “peer-to-peer (P2P) finance, online staffing, P2P
accommodation, car sharing and music/video streaming”, and “energy, telecoms
and retailing” are identified to promise considerable growth potential in
the next decade.
Innovative Frameworks/
Pillars that distinguish the trends:
For innovation in business services, the age old sayings – customer
comes first, be ahead and compete, innovate with services and products hold
good. The product service economy run by service providers and consultants
falls under this category. If you are in a traditional business, you tend to
see the loop holes – for missed opportunities and status quo. If you are a
start up, you will be filling the gaps and needs of your clients with minimal
infrastructure investment. From training to support, technology services have
always been aligned with business strategy and growth. In the case of business
services, the business processes are undergoing closer scrutiny in order to attain
efficient access to service delivery, utilizing unused assets (tangible and
intangible), and filling the gaps from
both outsiders and insiders of the industry. Valuing the trends requires
adjustments and re-thinking on how business can be done effectively. The trends
by themselves fit in and promise growth for both these ends of the spectrum. A
much broader view of the potential of the web for services needs to be taken to
come up with models and standards to enable their larger role in the world
societies and businesses.
The PWC report on sharing economy suggests
“digital platforms that connect spare capacity and demand, transactions that
offer access over ownership, collaborative forms of consumption, branded
experiences that drive emotional connection” as pillars that differentiate.
Botsman, R. (2014)
identifies five key areas of vulnerability or problems that enable innovation
with collaborative models – redundancy, broken trust, limited access, waste,
and complexity. They can be counteracted by the principles of directness,
openness, empowerment, efficiency, and simplicity.
Malhotra, A., & Van
Alstyne, M. (2014) recommend to “lighten” the darkside of the sharing economy
quoting history of banking, the Fair Credit Reporting Act (FCRA) and the
controversies it faced by established banks in the initial stages, but how
protecting consumers leads to a win-win business.
Conclusion:
Businesses have been driven by innovative technologies from
over a century. Observing the role of services that businesses offer, it is
clear that businesses are now aligning their strategy with the services they
provide. The core characteristics of internet are coming to life with
virtual, social networked organizations taking on, breaking the walls of
hierarchy for decision making. Information technologies are about people,
processes and technologies. Web technologies and services have started following
people, processes since a decade. Semantic web technologies and semantic web
services are gluing the links among people, processes and technologies to take
the web to the people, organizational, business level linkages to establish the
truly semantic virtual organizations. The trend has begun and is happening now,
setting the stage for innovative frameworks for the virtual, global service
organizations of the future.
Controversies in some of the recent consumer businesses (for
example, Uber in Philadelphia, New York, and Paris) are due to fundamental
violations of existing laws in established businesses in this area. They are
viewed under the category of,
“permission less innovation” as argued by Adam Thierer. The difficulty
is to determine the borders between service providers and digital platform
ecosystem partners facilitating interactions and relationships. Several
viewpoints arise for reinventing the traditional organizations while the
virtual counterparts rise and grow (Gobble, M. M. (2015)).
Winning in the services business has no short cuts. Customer
experience and quality of services come first. Legislation and regulation
matter. The fact that the platforms are digital, the potential to apply
corrections with feedback loops is the promise for keeping the relevance of the
businesses to the people who use them.
References:
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