While many businesses are embracing digital platforms—and that trend is expected to grow substantially in the next couple of years—Accenture’s report on “Five Ways to Win With Digital Platforms” cautions organizations that most new digital platforms will fail if they neglect the five essential steps for digital success.
Success, Accenture states, is a matter of remembering the 5 Ps:
• Proposition: to focus less on products and more on solving customers’ changing needs.
• Personalization: to customize customer experiences based on their interests and needs.
• Price: to move to new models like freemiums, discounts and surge pricing to match demand with supply.
• Protection: to safeguard the data shared between platform players.
• Partners: to work with others, such as app developers and payment providers, that enrich the customer experience and differentiate the platform.
Francis Hintermann, global managing director at Accenture Research, expounds on the report’s findings, saying, “We believe that digital platforms are increasingly applicable to B2B and B2C companies.” The reason some businesses hold back, he adds, is due to “a culture and/or legacy ways of doing business that make it harder for them to change.”
Hintermann reports that Accenture does expect to see traditional companies adopting digital platforms. However, doing so successfully, he says, “will require them to come up with new propositions, new pricing models and new ways to personalize the offerings that provide an ongoing customer experience.” These companies may also have to adjust to meet the needs of “a different form of customer market, one that is broadened by the platform ecosystem.”
Agility Will Make the Difference
Hintermann explains that failure may be inevitable for many organizations that “do not have all the five Ps in place.” As this is still early days for the platform economy, he says the situation is analogous to that of “the early days of the .com era.” Just as many of those companies launched only to go bust, Hintermann believes that we are likely to “see a number of platforms that will fail as ambitious startups experiment.”
This is where agility will make the difference between a company that makes it and one that doesn’t. Particularly for large traditional companies, having “openness to work in new ways will be critical to their adaption to platform business models,” Hintermann advises. That can extend to changes in “the way they produce and distribute, the way they work with partners to innovate, and the way they serve customers and provide new customer experiences.”
Among the established companies Accenture identifies as pursuing a digital platform is Philips. The company is betting big on the platform business model by launching the Philips HealthSuite platform with three cloud partners: Salesforce, Amazon AWS IoT and Alibaba AliCloud. The company’s plan is to be able to scale up in order to process the data from hundreds of millions of patients.
This platform approach not only enhances the quality and efficiency of patient care, but also opens up new opportunities for growth. It makes it possible to cover the entire gamut of health care needs, including healthy living, preventative care, diagnosis, treatment, recovery and home care. The combined value of these comprehensive health markets exceeds $100 billion.
Philips’ vision is a paradigm of the transformative power of the digital platform. As the Accenture report points out, what this means for businesses is a shift “from selling products to selling outcomes.”