Ecosystems often conjure childhood images of animals and plants working together. These essential symbiotic relationships taught us the importance of balance, inter-dependence, and supply and demand. Within our modern work environment, more companies are beginning to realize the competitive advantages of altering their solo strategy for one that embraces ecosystems as a method of bringing new capabilities — including digital — to their businesses.
CIOs must be a part of this transition to integrate ecosystems fluidly into all areas of the business. Businesses must pursue innovative, agile models to remain competitive and grow outside of their traditional core business—and ecosystems represent a strong opportunity to do so.
Having a strong and clear role in an ecosystem allows companies to pick the right teammates to make a powerful market play. Ecosystem partners bring complementary capabilities, a collaborative mindset, domain expertise, customer relationships, and data that will help bring new opportunities to market with new products and services for customers. Once leading companies with distinct capabilities collaborate on a shared vision and clear plan for the market play and desired outcomes, they can launch and operate their ecosystem.
Digital technologies emphasize the need for a more agile IT strategy with technology investments that support the future needs of the business. IT organizations will need to be multi-speed, taking advantage of business opportunities such as boosting customer engagement via new digital channels or winning emerging markets customers—alongside their traditional role as providers of technology capabilities and solutions. Information technology is critical in satisfying the heightened need for data insights, as today’s executives seek accurate, real-time information that supports decision making, reduces risk, and helps drive improvements.
Accenture Strategy research, Cornerstone of future growth: Ecosystems, shows that companies in the United States clearly see advantages in ecosystems, and almost half of those surveyed are actively seeking them. Accenture Strategy surveyed 1,252 business leaders from diverse industries across the world, including 649 in the United States, to better understand the degree to which companies are capturing ecosystem opportunities. (Note: We are both employees of Accenture.)
Survey results indicated executives’ desire to lead through adaptation and adoption. Of those surveyed, 63% of U.S. executives said they would build ecosystems to disrupt their industry. And even more U.S. business leaders (77%) agreed that current business models will be unrecognizable in the next five years—and ecosystems will be the main change agent.
Despite the optimism in ecosystem networks, many of those surveyed in the U.S. aren’t seeing the revenue growth they had predicted from ecosystem participation, and a lack of a sound technology platform may be the culprit. Some executives (84%) said ecosystems are important to their strategy of disruption, but only 40% are achieving their projected growth rates from ecosystem participation. The reason behind their lack of growth may stem from gaps in technology and digital transformation. Sixty-three percent pointed to technology as the key ingredient to get right in an ecosystem, but 38% said they struggle with developing the technology platform to support the ecosystem.
This is where the CIO must take the reins.
3 actions CIOs must take to enable ecosystem strategies
As companies look to embrace ecosystems as a new competitive strategy, CIOs should be on the front line to build platforms that support new capabilities and future growth. By taking on the following actions, CIOs will be well-positioned to enable ecosystem strategies:
- CIOs should work hand in hand with business leads to understand new market objectives and aspirations. These leaders can combine growth aspirations with the appropriate technology platforms to support acceleration of those go-to-market strategies.
- CIOs should define a clear picture of the overall business and technology architecture to understand how each of the ecosystem business offerings from the various ecosystem partners work with each other to bring that product or service to the end customer. They can bring innovative ideas to the business regarding how organizations in different industries might complement one another, for example payment and retail, to make step changes in their business models.
- CIOs can advise on the critical skills and capabilities needed to not only execute in an ecosystem environment, but also make the organization indispensable. For example, CIOs have a deep knowledge of vendor management to help an organization become more of a broker of services, as well as agile skills to support a nimble environment.
In today’s competitive business landscape, companies cannot go it alone. Ecosystems can bring unique capabilities, data, customers, and industry knowledge that can be a source of innovation for companies. By fully understanding their own business’s ecosystem, CIOs can achieve success in building supporting platforms and ultimately strengthen this powerful construct that can drive growth.
About the authors –
Diana Bersohn is a managing director in Accenture Strategy – Technology. She is a leader in strategy and transformation, specializing in global IT operating models and large-scale business and technology transformations.
Abizer Rangwala is a managing director in Accenture Strategy. He focuses on working with clients to shape their Technology Strategy. He specializes in partnering with organizations to identify and capitalize on opportunities to utilize technology to maximize their business potential and reposition IT for the digital era. He is based in Boston, Massachusetts.