Digital Ecosystems Will Recast the Global Economy
By John Chan
With the immense changes brought about by digital ecosystems, the marketplace will reward the organizations that understand the importance of digital ecosystems in the marketplace. Organizational management can create new foundations of value via the use of digital ecosystems and consequently change the power dynamics of global business.
eBusiness professionals should recognize that:
- Big Data will become a prominent element in the global economy. With the increasing digitalization of the global economy, information collected and analyzed by organizations will be a major influencer in each customer’s personal value ecosystem. Organizations that collect, generate and effectively analyze customer transactional data will have a key benefit against their competition.
- Organizations will progress to either become digital raiders or digital targets. The digital raider organizations will develop new digital skills and efficacies to use against their competitors, leading to greater profits. Many customers will choose the digital savvy services offered by the digital raiders for their personal value systems. The digital target organizations (lacking digital skills and efficacies) will simultaneously decline, losing their market share to the digital raider organizations.
- In the future, many digital inexperienced organizations will need to replace their legacy technology systems to survive. Consequently, digitally savvy service organizations will agree to service these digital inexperienced organizations. There will be an agreement to provide significant data feeds to these digital inexperienced organizations in perpetuity. A key result of such an agreement will be that the digital savvy service organizations will understand more about the digital inexperienced organization’s customers that the digital inexperienced organization’s management. Thus, the digital savvy service organizations will have a greater dominance in the future marketplace.
- Government will face expectations from its citizen constituencies for digital practices as presence of digital practices in the private sector increases tremendously. Therefore, government departments will need to incorporate new digital operating models with the citizens’ value at the core. The adoption of these new digital operating models will bring about more efficient services to its citizens. A foremost consequence of these new government digital operating models will be a reduction in the size of the government, while simultaneously expanding government services.
- Customer ecosystems will develop into a prevailing pay-as-you-go products and services marketplace. The current customer ecosystem of ownership models will diminish as the sharing economy model increases in importance. Organizations that use the pay-as-you-go model will flourish, while organizations that sell their products/service to their customers as a one-time transaction will shrink in their presence in the marketplace. As more transactions in the pay-as-you-go products and services marketplace are digitalized, the organization’s capability to transform the data collected with each transaction into meaningful charging mechanisms for services will expand.
For all eBusiness professionals, there needs to be an understanding that global marketplace has irrevocably changed. The factors that organizations used to differentiate themselves against their competition such as economies of scale, distribution strength and brand will be less compelling in the new global economy. Organizations that successfully adapt to the dynamics brought about by the digital ecosystems will thrive, while organizations that do not adapt to the changing market dynamics will lose their prominence in the future marketplace.
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John Chan is the ISM Software Lab Director, is responsible for software testing and defining the evaluation criteria for The Guide to Mobile and Social CRM and the CRM software offered on ISM’s Reviews Online service.