There are hundreds of startups and companies that started as a digital platform (think AirBnB, Lyft, Postmates) and plenty more traditional businesses who are implementing digital transformation, or at least dipping a toe into the concept.
Rather than just following a trend, business leaders are driving the adoption of digital platforms based on a response to fierce competition, and more importantly, their consumers. In an MIT/Deloitte survey of managers and executives, 90% expect their industries to be disrupted by digital technologies to a great or moderate extent, but only 44% believe their organizations are adequately prepared for these digital disruptions.
As executives ride the crests (and troughs) of the waves of emerging technology and other external market forces, getting a handle on how a digital platform can propel your organization forward is top of mind.
In this post we’ll dive into an overview of digital platforms, present several options for implementation, discuss who should lead the transformation, and show a few common challenges to digital platform creation and utilization.
So let’s start at the start.
What You Need to Know About Digital Platforms
When it comes to digital platforms there seem to be more questions than answers:
- Should a digital platform be internal or consumer facing? (It can be both)
- What results should I expect? (Ideally a positive transformation in the way you, your employees, and your company works)
- How much will I need to invest? (It depends on several factors, like the level of transformation you want, and how big your company is)
- How can I track my ROI? (Lots of different ways!)
And these are good questions; it’s healthy to be asking questions like this before you get into a company-wide project such as digital transformation. We’ll address each of them throughout this post, but first let’s start with a explanation of digital platforms.
A digital platform allows customers to engage with your organization in their chosen method, whether that’s live chat, watching videos, reading blog posts, using your app, or buying your products/services.
As opposed to a channel, which only pipes info in one direction, a platform is a two-way communication tool. For example, a newspaper is a channel—a company publishes content and people read it. An online community, which publishes content and has features for user interactivity and feedback (such as a comments section), is a platform; albeit a simple one.
It’s a dance floor where your customers can express themselves in whichever way suits them. In turn, you can use engagement data from your customers to better cater to their needs.
The benefit of a digital platform to consumers is obvious—a great experience and one that can meet their immediate needs and mold to their preferences—but there’s also a massive benefit to the business behind the platform.
For example, look at babycenter.com, which is owned (yet maintains a separate P&L), from Johnson & Johnson. By providing the leading resource for mothers, they obtain a wealth of data about:
- The topics mothers are interested in
- Which concerns they research
- How they phrase their search queries
If you were in the business of creating and selling baby products, is that something you’d want to know?
And let’s not forget about some of the internal benefits your organization can receive while operating on a digital platform.
- Data helps foster innovation within your company. Data ensures that you’re not flying blind or making assumptions about what your consumers want or need. This insight gives you the ability to develop more effective strategies in your industry, and help you become a leader.
- Manual processes can be automated. As you become smarter in how you build great experiences for your customers, you can also become smarter in how you build great experiences for your employees. One way to do that is by automating redundant work – like data entry – so your employees can spend more of their time on high value activities.
- Business processes can be simplified. Digital platforms help companies get from A to B faster and more effectively. The result is that business processes that used to be a slog to get through become more refined. And when you improve your internal processes, you improve your business.
Your Options for Going Digital
Digital platforms sound neat, don’t they? If you’ve read this far, there’s a good chance you might be wondering how you can create your own digital platform.
You actually have a few options for digital transformation at your organization.
Borrow an existing platform. If you’re part of a conservative organization that needs to see a proof of concept, this is a great way to dip a toe into the idea of using a digital platform.
For example, most companies maintain some type of social media presence, generally used for marketing. Instead of existing on Facebook because ‘everyone is there’ and using it for a smattering of business objectives, choose a department (or goal) and commit some of your people and resources to building the platform into a specific function, such as customer support.
Facebook provides an excellent platform for customer support—instant messaging, notifications, and it even has teamwork and collaboration tools built in.
Merge or partner with a technology vendor. As discussed earlier, there are plenty of companies that launched with a digital platform as their primary business asset—would a partnership make sense?
For instance, Shopify recently announced a partnership with DHL. It’s not hard to see how something like this benefits both organizations: Shopify is able to add some DHL services to its shipping department, therefore enhancing customer experience. DHL, of course, gets a ton of v shipping volume without having to build out a digital platform to create the marketplace.
Build it. If you’re not interested in dipping a toe or investing in a partnership, building your own digital platform is the obvious, and most expensive, solution. You’ll have more control, more flexibility, and be less vulnerable to external market and technology disruptions. Keep in mind that building an in-house digital platform is a very tall task—you’ll need new technology, new talent, and new leadership direction and company vision.
Who’s In Charge of Your Digital Platform?
Somebody has to steer the boat, right? And too many cooks spoil the broth, correct?
Metaphors aside, leadership is absolutely crucial for a successful digital platform—this is a person who possesses fluency with tech, a deep understanding of customers, eyes on the future, and the wherewithal to see it to completion.
But seriously, who?
There are mixed opinions, and it largely depends on your organization.
Roughly 20% of the world’s 2500 largest public companies have hired a Chief Digital Officer (CDO), which is a good choice for utilizing somebody who is strong in tech and forward thinking.
Others may consider using their CIO for this role—even stronger in tech, and already in tune with many different aspects of the company.
In an insight from Boyden, Steven Cook, Former Samsung SVP, CMO North America current Contributing Editor, CMO.com, makes a strong case for the CMO to lead the charge:
“I think any digital platform should sit with the Chief Marketing Officer. The CMO is the department lead that is closest to understanding the consumer, the marketplace and the competitive landscape.
In this role, the CMO is best-positioned to use the martech stack and big data available through various digital and social channels to inform the rest of the organization of trends and changed consumer behavior in the marketplace.”
Regardless of who you put in charge of your digital platform, it is a team effort that will require cooperation and buy in from the entire executive team. The person in this role will have to embrace concepts like data science, digital analytics, and community building to succeed.
Challenges You’ll Need to Overcome
In case you didn’t glean this from the previous sections, it’s not easy to build, implement, and maintain a digital platform. There are numerous challenges at different stages along the way—awareness and preparation now will go a long way when it’s time to address your challenges head on.
Here are a few common obstacles in digital platform adoption.
Providing value. We now understand how your organization will benefit, but what do the users get? If you don’t have a clear value proposition immediately, you’re in big trouble. It doesn’t have to complicated, however, and you can let it grow over time.
Consider Facebook, for example: the original value proposition was that Harvard students could see pictures and messages of people they know. That was valuable enough to attract a base of users. From there, Facebook has grown into one of the premier communications tools worldwide with a plethora of value propositions for both business and personal use.
Oh, and don’t forget Facebook is rewarded with upwards of $26 billion in annual ad revenue.
Access to an audience. Digital platforms need users to function, and they need them right away. Keep in mind, many digital platforms provide value as a result of having a large audience who are inputting data into the system. How can you get an audience onto your platform… and fast?
The obvious answer is to leverage existing audiences—think email lists, social media followers, or partner networks. Of course, you’ll need to present them with the value proposition mentioned above to gain their trust.
Earning credibility. For a social network, the size of your user base is pretty much your street cred. But imagine if you’re building a paid digital platform—you’re going to need to consistently show that your platform provides sufficient value for the cost. And this isn’t just for new users, either.
Retention. Obtaining that huge first wave of users is nice, but retaining them is a different story—just ask Google+... Sorry, had to. Realistically, your plan for retention is just as important as your plan for acquisition, so make sure to account for both with equal attention.