Ecosystem Integration: Driving Business Outcomes

by | Jan 5, 2020 | Blog

Ecosystem integration takes an “outside-in” approach to orchestrating end-to-end integrations with a dynamic network of trading partners, applications, suppliers, customers, and marketplaces.

Multi-enterprise integration empowers organisations to drive business outcomes and value, with features like faster partner or application onboarding, business process optimisation, improved agility, and identification of new digital revenue streams.

Making Changes

The production, sale, and service of equipment are the traditional business model of hardware-oriented industries. However, digital has transformed all segments; product, project, and process industries.

The more digitally mature a company is, the better its performance is along with two key indicators: TRS and revenue growth. Although most companies across industries have ventured into the digital space, less than 1 in ten are highly mature, however, these are the companies that have been most successful in digital transformation. Compared with the least mature, the most digitally mature companies see three-year TRS rates nearly three times larger and five-year CAGRs more than four times larger, according to one 2019 survey.

Digital is an OEM opportunity

In the machinery industry, digital is more than a novel feature, it has implications for every link along the value chain.

  • Digital applications are creating efficiencies for OEMs and Tier-1 suppliers.
  • AI is reducing time to market in product development.
  • In manufacturing, the ubiquity of autonomous robots is boosting shop performance.
  • The emergence of collaborative robots is improving the lives of humans working alongside them.
  • Digital is reducing distribution costs by optimising delivery routes and fleets.

Further down the value chain, tech giants are using their digital expertise to enter the manufacturing industry in after-sales and services.

In after-sales, digital is becoming the foundation of a new type of platform for spare parts and consumables.

In services, a single application of a digital-technology-like augmented reality can enable a premium service offer and increase on-site maintenance efficiency. With advanced digital know-how, tech giants have inserted themselves in these links of the manufacturing value chain and threaten to stand directly between manufacturers and their customers.

Some are integrating directly into the procurement systems of manufacturers’ customers, making tech companies, not OEMs, the go-to provider for parts and services. Amazon and Alibaba are tech-giants taking over after-sales and service.

B2B ecosystems provide a new strategic approach to create and secure value

Individually, no machinery company can rival the software and IT capabilities of a technology powerhouse like Amazon or Alibaba. However, as part of an ecosystem that includes other machinery players – ones who serve a similar customer base and whose offers are complementary – that same company can fend off the new wave of tech competition by developing the capacity to deliver innovative after-sales and services offers.

This alliance of traditional players constitutes the core of a digital B2B ecosystem play, and it is a radical strategy with the power to help manufacturing companies create and secure value in after-sales and service.

A healthy ecosystem is a partnership of players which combines industry insights, customer understanding and relationships, established industry-specific networks, and highly complementary value chains to create true value to their end customers. The digital B2B ecosystem is a carefully cultivated environment of industry players that collectively establish the key characteristics that none of them can fully provide individually.

It is the collective know-how and access of the ecosystem that is the best defence against digital natives looking to enter the industry and dominate. Successful digital B2B ecosystems are lines of defence that help manufacturers and suppliers create real value in after-sales and services and hold onto valuable customer relationships, which tech giants seek to control.