Springboard
April 2, 2020
Amazon Web Services- Activate Partner
May 18, 2020
Consistent market pressures both locally and globally, require large enterprises to explore new business models. Digital platforms come with the promise of exponential growth, scale through network effects and no assets needed, this is fast becoming a popular avenue for new revenue models in Africa. Research by World Economic Forum shows that emerging digital ecosystems could account for more than $60 trillion in revenue by 2025 but yet only 3% of large enterprises are actively implementing digital platforms.
On the 9th April, COOi held an engaging discussion on Digital Platforms the challenges and opportunities for large enterprises, led by Rekindle’s Rapelang Rabana, Lars Veul co-founder of Pargo and Nkazimulo Sokhulu Chief Executive Officer of Yalu, joined by business leaders and academics primarily from South Africa. The objective of the conversation was for startup founders who have built digital platforms to shed some knowledge of their learnings and experiences to those who are aspiring to build a digital platform. Post the discussion, COOi Studios consolidated the insights, complimented by their knowledge and expertise on digital platforms and built a guide or at least their opinion around the steps large enterprises need to consider for developing a digital platform.
As compelling as digital platforms may sound, it is no surprise that only 3% of large enterprises are dabbling with this phenomenon. Digital platforms are business unusual; returns can only be captured between 3 to 10 years, they don’t follow the traditional systems development life cycle (SDLC) that most chief information officers (CIO) are accustomed to and often require different skills set usually in emerging technologies which don’t exist in the organisation. The founder of COOi Studios Sandiso Sibisi, having implemented a digital platform in in her former corporate days can attest to the difficulty of making digital platforms work in a large organisation. Jointly with our digital platform experts and startup founders, we have developed a four-step approach to building a digital platform within a large enterprise. Our upfront disclaimer is that this may or may not work for you, and perhaps not even in the proposed sequential order, but we believe it may spark some ideas on how to get your digital platform across the line.
COOi’s recommended journey to platforms is based on four not so easy steps; customer data, prototype, learn and scale. And we attempt to provide more details on each of the steps in this passage.
Customer Data
Today, one of the most significant sources of data are consumers, online browsing activities, geo locations, and past purchases. The heaps of consumer data created every day, leave mounts of information that can be used to provide meaningful insights. For many large enterprises looking to create exponential value for their customers, data will be their oil. Significant opportunities to leverage consumer data: either by using it to improve customer experience or optimizing supply chain processes lie ahead. Step number one, start with what the data is telling you, this will inform a platform to build and for who to build it for. Most corporates already have this data, so put it into some good use.
Learn
Digital platforms do not follow the traditional SDLC, it follows a more agile approach, different in that it does not aim to take a perfect product out to market, but rather it issues a minimal viable product (MVP) for user consumption, and follows a wait and see approach, which is contrary to business as usual or even company policy at times. The success of Procter & Gamble (P&G) as one of the world’s top performing large corporates is tied to its revenue growth delivered by new products supported by a lean innovation approach. One of the key findings is that learning is the most effective contributor to product development, rapidly trialing and canning new products, helps organisations accumulate knowledge to drive growth from the product itself or other parts of the business. You might ask, so what should we be learning in the midst of our prototype being out in the market? Here are some patterns to observe;
 Social, Economical and Technological factors unique to your market, or African landscape
 Customer feedback (proactive or collected customer data) e.g. adoption rate
 Digital skills pool to build the platform, and understanding digital literacy of your customers or platform users
 Timing e.g. Air BnB in the financial crisis
 Forecast financials, budget, return on investment (3 to 10 years)
 Capturing value, pivoting and unintended consequences
 Social, Economical and Technological factors unique to your market, or African landscape
 Customer feedback (proactive or collected customer data) e.g. adoption rate
 Digital skills pool to build the platform, and understanding digital literacy of your customers or platform users
 Timing e.g. Air BnB in the financial crisis
 Forecast financials, budget, return on investment (3 to 10 years)
 Capturing value, pivoting and unintended consequences
Prototype
Research has shown that an investment in scaling technology and innovation across your organization reaps significant growth in revenue generation. However, approximately 10% of large corporates are making optimal investment in game changing technologies and are witnessing their return on investment. With that being said, securing budget may be a tall order, but nonetheless achievable. The investment will need to be made in terms of time or financial resources. Source budget preferably a grant within the large enterprise, where repayment or ROI is not expected, internal offices to ask; corporate social investment (CSI), enterprise supplier development (ESD) if you are considering working with a small business, strategy, research and development (R&D) or if you are lucky enough to have one innovation.
The aim is to acquire a beta version of your envisioned platform, they are various one can do this; buy an existing platform and begin to use it in some cases white labels are available, find a team within your organisation to build it for you but expect this to be a long and complicated journey, outsource the build if budget allows, this will give you speed.
Scale
Be the first to scale, first mover advantage is not a myth. McKinsey evaluated 25 high-growth categories in four countries across North and South America, Asia, and Europe. The organisations that launched their ideas first won the highest market share 80% of the time. However, we empathise with you, that scaling an unusual product within a large established corporation is not easy; to begin with culture is old school in most cases, so set yourself and team with high aspirations and metrics to live up to, hunt in packs by finding the best suited partners to take this idea to greater heights and roll your sleeves up for some regulation and legal battles. Scaling will not be possible without a dream team, so build it as this goes hand in hand with reallocating resources for the marathon, prototype is the sprint, but scaling is a marathon so have the best team in place.
Within our presentation we conducted for the Global EdtechX Summit 2020 we noted two case studies of large enterprises who have developed or acquired digital platforms, to prove to you, it is possible. Naspers a conglomerative moved into e-commerce by firstly building their own digital platform and thereafter acquiring a startup well ahead of the curve doing the exact same thing. Standard Bank, wanted to rapidly build their digital banking offering, they acquired a startup called Snap Scan and partnered with Mastercard for a digital wallet so they could very quickly lead in the sector. We hope these two examples, do give you some hope.
We must reiterate that the proposed guide is merely that, a guide, so take what works for you and your organisation. We are in unprecedented times, its business unusual now more than ever. Growth is imperative, without the commitment of a new mind-set, new approaches, you purposefully place yourself in line for being disrupted. So our parting words is don’t sleep on the power of digital platforms, as it can place you at the forefront of innovation.
