Digital business platforms – such as customer management, document collaboration, or payroll systems – have propelled waves of productivity and customer experience outcomes for the last decade. But it won’t come as a surprise that so far, business is only scraping the surface of the value that can be realised.
Many industry sectors are yet to commit their data to digital systems, preferring instead to keep things internal, on private computer systems and, yes, even paper.
International trade supply chains are a prime example. In this industry, cargo data and documentation is tightly held by each member of the supply chain and rarely shared, resulting in a lack of visibility for both importers and exporters as to the progress of their goods.
Data platforms too have yet to truly capitalise on the rich data they hold to capitalise on its potential. With the data flowing through (and entrusted in) their digital hands, they are ideally placed to deliver service and product innovations. Yet few of them have.
Whether a user or provider, it’s time that businesses caught the innovation wave to tap into the data possibilities.
Ten years ago it was rare that businesses relied on cloud-based digital platforms to run core functions and processes. But as cloud providers have experienced rapid growth, those that moved their data the cloud have benefited from from the waves of productivity that it has enabled.
Using a digital data platform eliminates a lot of wasted effort from the ‘manual’ handling of data – rekeying it, recutting spreadsheets or emailing files around. Data in the first wave is created and processed in the cloud. The use of Xero or MYOB for accounting data, Salesforce or Marketo for customer relationship management and communications, are examples of platforms where business data is created and securely stored.
The benefits shouldn’t stop at cost savings through data efficiencies. The second wave of productivity stems from business agility. The speed of response that is delivered by real time information means quicker decision making and timelier customer service. Financial statements are always up to date and sales leads are instantly identified and prioritised.
Businesses need to evolve to making use of the power in the platform itself to improve products and services themselves. The extra bandwidth gained from more time and margins must be channeled back into producing higher value.
As we’ve found in our recent work in the logistics sector, there is more than A$1.1 billion of estimated value yet to be realised from cost efficiency and business agility in the management of containerised freight in Australia. At PwC, we are proposing to pilot a data sharing platform for the trade community to help deliver those benefits and more, initially christened the Trade Community System.
What’s apparent, however, is that even more value will come when business employing data platforms such as these embrace innovation.
Using a platform to get quick visibility of your information – whether it be your accounts on Xero, your sales metrics on Salesforce or, soon, your cargo status on a platform like the Trade Community System – is just the beginning. When you enable machine learning or AI to interpret your data, compare it to the aggregate view from similar businesses, and offer advice on what actions to take next, you unlock new avenues of insight and innovation.
Jared Baker, platform growth director at Xero, believes the rich perspectives offered through aggregated and anonymised insights have become invaluable to decision-making today – and will empower the small business sector to innovate with more agility in the future.
In the same vein, he notes, platform providers – and their wider ecosystem of connected solutions – must continue to evolve using an insight-driven approach.
“Subscription companies are unique in that they have to earn your loyalty each and every month,” says Baker. “At Xero we focus on providing value by continually evolving our platform, and helping our hundreds of ecosystem partners do the same. If you can provide informed innovation at a platform level, you compound the value you create for your customers – and that they, in return, can pour back into their businesses.”
As technology alters the way we innovate services, the ecosystem provided through digital platforms – be it apps or overlapping services – offers the ability to pivot entire business models for growth, in an era when that is often required.
Returning to our example of the Australian logistics sector, technology solutions in this sector have historically been relatively closed, with each trying to own part of the supply chain and create a wall around that data, forcing users to subscribe. With our Trade Community System digital platform, a core principle has been that it should be low-to-no cost to participate. Instead, revenue should come from over-the-top services that provides users, such as freight forwarders, valuable insight to run their businesses better.
For example, what if access to anonymised aggregated data meant that fintech firms could offer better priced trade finance to an importer because they could see the relative risk profile that every route and handling party represented? Or if by sharing its logistics data an exporter could use a a marketplace app that matched it to trucking companies with spare capacity?
The possibilities are vast.
Those who own digital platforms have an almost endless ability to make value above that of their core function. But businesses using these platforms are evenly advantaged, and should consider their options in contributing to existing digital ecosystems, for example, producing apps or driving innovation on the platforms they use, or by considering what platform services they too could offer in their own industries.
For businesses that have yet to commit to digital platforms in their sectors, there may be limited time to make the switch. The productivity gaps between those that are on board and those that are not may only be nominal at the moment, but they will increase exponentially, and at some point you are either riding the innovation wave or going under.
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