HomeBUSINESSDigital Ecosystems - New Market Access With Manageable Effort

Digital Ecosystems – New Market Access With Manageable Effort

Whether data or system integration, digitization, or IoT: Anyone who becomes part of digital ecosystems or even initiates them, themselves can benefit from the possibilities of networking with little effort and manageable costs.

Amazon Marketplace, Alibaba, and the Apple App Store: providers of consumer products use such platforms to present their offers. Logisticians, financing partners, and other service providers offer additional services and create, as the Fraunhofer Institute defines it, “a socio-technical system in which companies and people cooperate who, although they are independent, promise mutual benefits; from participating .” And in Germany, too, digital ecosystems are now flourishing in the B2C sector with platforms such as Delivery Hero or Gematik.

Such platforms enable interaction between producers, consumers, and third parties. And platforms are no longer just pure marketplaces. Competitive advantage comes from data-based transactions between different partners in today’s digital markets. And at all levels: Platform solutions connect internal and external systems, cloud services, household appliances, and machines. Only those who build an ecosystem that unites providers and makes ordering and booking processes or logistics services as convenient as possible for customers will prevail over the competition. Digital platforms enable direct access to offers using digital technologies such as automated data integration.

Data Integration Is Worth Its Weight In Gold

On the one hand, it is about integrating entire business processes connected via platforms. On the other hand, the main concern is the smooth and error-free transfer of data to other systems on the technical side. It’s worth looking at the details here: Effective data exchange is decisive for the success of platforms – and for staying ahead of well-connected competitors.

Small and medium-sized companies, in particular, are usually bound by the specifications of their significant customers and sales partners when transmitting data. Whether orders, order confirmations, invoices, delivery notes, or customs documents: the form of the electronically sent data always depends on the systems used by the respective partner. And the requirement to deliver all data digitally is increasing: Larger companies nowadays require that small partner companies also use a system for electronic data interchange (EDI).

On the other hand, companies are under pressure from the demands of end customers: anyone who orders something or uses a service expects real-time shipment tracking and precise documentation of the processes. The small ones in the market, who have the less financial capacity and digitization know-how, are left behind.

Integration Platforms As A Service

Fortunately, more and more companies are now offering iPaaS solutions. iPaas stands for Integration Platform as a Service. iPaaS solutions deliver ready-made platforms for digitizing business processes that communicate between separate cloud applications. It is convenient when these solutions are based on low- or no-code technology: A company adapts the platforms specifically to its own needs without developing the necessary architecture.

More and more companies are interested in such marketplaces. A study by the Federation of German Industries (BDI) from 2020 documents this trend with several interesting examples. From logistics to agriculture and health care: Platforms open up the possibility, especially for small and medium-sized companies, to use all desired formats and communication channels of the partner companies without any problems. Business partners can connect to a platform with their systems and participate in automated data exchange. This creates an entirely digital process that creates transparency, ensures traceability, and offers many options for automating processes.

Network Effects As A Success Factor

“What else could you offer customers?” – with this question, a pure trading network becomes a platform ecosystem. Every good platform must combine the pleasant with the practical and cover as many customer’s need as possible with foresight through complementary services – without direct action by the customer. The so-called network effect is decisive here: The more consumers use a platform, the more providers will gather on the forum, the more consumers will use the venue, the more providers. the process continues – ideally – indefinitely. In the end, there are platforms like Otto, Spotify, Airbnb, or Booking.com.

This Is How A Digital Platform Works

A concrete example: A small company sells sustainably produced clothing. Many customers would also like an alteration service, which the retailer cannot offer. That’s why he provides a marketplace for external tailors in the webshop and, at the same time, sets up a rating system through which users can give their feedback. As a result, the four best-ranked sewing studios are automatically displayed for each order process. Everyone benefits from this digital ecosystem: The fashion retailer strengthens its network and increases its sales because it can serve extended customer needs. The tailors help because the platform gives them a much larger reach. And customers benefit.

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