We’ve all heard of the power of “platforms,” and unfortunately, like many good ideas, the term has taken on a variety of meanings. In this case, I’m referring to a group of technologies, processes, and applications that allows for multiple, sometimes seemingly unrelated, products and services.
Perhaps the most famous example of the last decade is Uber, which combined technology, new business models, and mobile applications to create what was initially an asset-free, on-demand personal transportation network. That core transportation platform quickly provided the underpinnings of a package delivery service, and then a food dispatch network.
It’s tempting to think that platforms are a relatively newfangled idea limited to Silicon Valley startups, however, the concept has been around for decades. Perhaps the first modern technology-driven platform was the SABRE computerized flight reservation system, which first went online in the 1960s and was created by American Airlines and IBM. Realizing the power of SABRE, the system was quickly expanded to travel agents and other airlines, and ultimately became the standalone business that launched Travelocity, which was ultimately acquired by Expedia.
Rewinding the clock even further, you might consider Eastman Kodak the ultimate early platform company. Starting with George Eastman developing early roll film, then the camera to use that film, and ultimately an entire chemicals company to support the platform, the company became an empire that crossed into hundreds of other products before falling victim to disruption in the form of digital photography. This reveals another important nuance of platform thinking, and one where hindsight is a benefit. Had Kodak considered its platform to be photography in general, rather than film and chemicals, it might have ridden the digital wave.
The platform, not the product
The power of a platform model should be relatively apparent: The same core set of assets creates multiple streams of value. In Uber’s case, there’s revenue from car riders, packages, and food deliveries. These three streams can use the platform with little change but are also diversified enough that they are unique, a fact that’s been demonstrated during COVID when car riders fell dramatically while food deliveries increased.
As an IT leader, you might not be tasked with designing platforms to power businesses with $100B valuations, but applying the thinking behind platforms can make your company’s technology assets significantly more effective. Before scoffing at the idea, consider that AWS, now a $13B business in its own right, started as Amazon’s internal IT system, and a healthy dose of platform thinking turned the back office into a core revenue stream.
Whether intentional or due to happenstance, most platform businesses have a few core assets that are extensible. In Uber’s case, it was a novel business model and the rather straightforward underlying technology that allowed the company to connect riders and drivers without owning any vehicles. In the case of AWS, the company started with a set of simple services like storage, that were novel in that they could be accessed through a set of standard interfaces that worked without needing to worry about the underlying servers, software, or networks.
What are your potential platforms?
We’re used to talking about platforms in IT, but too often, we only think of platforms in terms of the hardware and software rather than the people, processes, and internal business models that support them. Perhaps you have excellent message dispatch and workflow that powers your tech support function, or a set of service centers around the world that provide follow-the-sun workers. Even at small shops, you might have tools for data consolidation and analysis and the right skill sets to use these tools effectively. All of these could be leveraged as internal platforms.
What’s generally missing is some thought into how you provide access to these capabilities and inform other parts of the company that they’re available. A snazzy API to provide detailed customer information from various internal systems doesn’t do much if it’s only shared within the walls of IT. As technically minded people, we often focus on the hard work of getting the systems set up and operating effectively, but underinvest in the additional and comparatively small effort required to turn the technology into a platform that the company can use to build new services.
As an example, I was rather amazed to discover a complete web application platform within my company. All the integrations had been completed. There was staff to help us onboard our developers. Perhaps most important for a heavily regulated industry, all the compliance and external reviews had been completed and approved. All of this was due mainly to the hard work of a small team, which had fallen victim to the old assumption that “if you build it, they will come.”
As you review and update your technology strategy, take the time to look for potential platforms hiding in plain sight in your IT organization, and don’t assume that bleeding-edge technology is more important than ease of access and useful capabilities. Focus some of your efforts on internally marketing these platforms. It might seem like a low-value activity when there are competing priorities, but it’s a smart way to get more value from the assets you already have, and allow the broader organization to extend the capabilities you’ve built even further.
Reference: How to apply “platform thinking” to your tech strategy for greater success (msn.com)