Platform ecosystems metrics are discussed by researchers and authors broadly from two angles
- - evolution of platform ecosystem
- - economics of platforms
Their contributions are based on their interests, backgrounds, and advisory experiences
When it comes to mainstream practitioner perspective, there is much to grasp, tradeoff, along with an eye on the effects of interdependencies. Design and Engineering of platforms processes are not yet standardized. This means, to churn out platform development efforts as easily as other business systems entrusting the in house IT departments to fit in their agendas of the enterprise architects do not seem to be popular in the immediate future. Perhaps, it will never be because of the nature of platform development.
Platform Ecosystems' author Amrit Tiwana and Platform Revolution authors Parker et al, have contributed extensively from these two angles.
Tiwana’s emphasis is on the shift in thinking necessary for those familiar with the software engineering methodologies for the business software systems. He clarifies the differences behind evolution metrics and implementation performance. For the business software architects, the term evolution can be seen as functionality/ feature expanding of platforms. Not only this, how well the system is fit for the future for long term survival and winning. While discussing evolutionary metrics, the corrective approaches and review backward is not the emphasis which is central to the themes of software systems maintenance.
Parker et al highlight the important metrics are those that quantify the success of the platform in “fostering sustainable repetition of desirable interactions” with a goal to generate positive network effects and creation of enormous value for everyone involved, including users, sponsors, and managers of the platform. The discussions on metrics from this angle does not mean that system implementation metrics from the engineering standpoint, the business process efficiencies, and system-level enhancements are not important – they are assumed. Everything discussed by the authors is on TOP of existing understanding of systems development thinking. More caution must be exercised due to the complexity as well as the mistakes made by chasing the wrong metrics can result in undesirable outcomes at a rapid rate.
The emerging role of ecosystem architect who caters to the needs of platform development beyond the system architects – whether business or technical. The system architect and the business architect bridged the gaps and laid the foundation for the various business software systems we see in operation today.
The article Emerging Role of Ecosystems architect by James Hedges and Andrei Furda stands out in my readings on the role of the ecosystems architect in designing platform ecosystems. The article contributes to an extensive literature survey on ecosystems discussions – approaching the ecosystems from a customer and technology perspective. The authors of this article emphasize on what constitutes interaction success throughout the various stages of the platform. They laid out a table of metrics for platform/ ecosystem combining Tiwana’s metrics for evolution (resilience, scalability, and composibility in short term, structure, platform synergy and plasticity in the medium term, and envelopment, durability, and mutation in the long term. Parker et al metrics focus on interaction success and reflect the reality of the business from the user’s perspective. They track evolutionary stages of the platform. These include “liquidity, matching quality and trust during the start-up phase, size of portions of the user base, lifetime value of producers/ consumers and sales conversion rate during the growth phase that can drive innovation and identify strategic threats from competitors during the maturity phase. Having a handle on the interdependencies of metrics requires in-depth understanding and tracking in the changing contexts and environments.
I now turn to Network metrics. A sample of the interrelated areas for metrics can be seen in this blog article – “16 ways to measure network effects” broadly categorized as – acquisition, competitors, engagement, marketplace, and economics related metrics. Diving deeper – the metrics turn out to be 16 of them. In your respective business contexts – there may be many more.
Conclusion:
It is clear that treading the waters of platform/ ecosystems metrics is about tracking complex metrics characterized by evolution, dynamics, and uncertainty. Watchful strategy, governance, and adherence to the discipline of tracking what is working and what is not is the way forward for metrics.
The promise of technologies, Big data, Analytics, and AI algorithms is to provide with tools that can far surpass human intuition and inference. This promise is both an asset and a challenge to what lies ahead for platform thinking and decision making on metrics that matter.
References:
Three among the many short term/ startup phase, interaction focused, user perspective metrics to be considered by an ecosystem architect - Liquidity, Quality of Matching, and Building Trust. Sangeet Choudary's @https://lnkd.in/gH_b2EX
https://thenextweb.com/entrepreneur/2013/05/04/how-to-win-with-marketplaces-the-three-success-factors/
#platformhashtag#metricsare dynamic and evolutionary by nature. Software and market places come closest to the journey with platforms. Still, if one goes by focusing only on traditional enterprise software engineering metrics - the software ecosystems/ platform engineering metrics are quite different. Similar issues if the focus is only on market place perspectives. Here is a read on metrics for network effects - to grasp the range and coverage on just one area - network effects, categorizing them broadly "acquisition, competitors, engagement, the marketplace, and economics-related" metrics. @https://lnkd.in/gkb83Rz
https://www.hellosign.com/blog/evaluate-digital-platforms
https://www.pointillist.com/blog/uses-of-artificial-intelligence-to-boost-customer-experience-measurement/
Additional Readings:
https://knowledge.insead.edu/blog/insead-blog/digital-businesses-the-metrics-that-really-matter-6731
