Digital transformation has brought companies new perspectives for business development. Digital platforms are shaping the fourth industrial innovation. With new innovations, companies can improve the journey for all stakeholders, while saving time and money. There are so many options that it’s hard to choose.
An innovation trend that has been widely accepted by global companies is for sure the rise of the digital platforms.
A digital platform is a collection of software and hardware tools that companies use as a part of their digital strategy. Digital platforms are places where companies connect with users. Moreover, depending on the company’s business model, digital platforms can also connect organizations with B2B clients, investors, providers, etc. We can use them to exchange goods, or information, knowledge, services, etc.
Digital platforms can be set up of many tools, including a website, a registration service, a contact database, payment processors, a shop, a news feed, etc. These tools vary depending on the business, and they are here to create a better user experience.
What’s the role of data?
Data is the basis of digital platforms. They aren’t supposed to be based on processes. The data that comes through digital platforms, if used right, can help companies improve customer experience.
Many companies do this wrong. Instead of focusing on the data, they focus on technology. Without research, they go for complicated technologies that are supposed to improve the process for all stakeholders.
Believing only your own gut without asking customers what they want can only lead to failure. Companies need to have in mind that users don’t think like them. Digital innovation is here to bring change. It’s flexible and it can go forward with constant modifications, made according to customer needs.
The change creates value. Digital platforms won’t be successful if we make them only with sophisticated technology. Digital platforms will be successful if they are user-friendly.
That’s why companies need to dig deep into the behavior of the end users and learn how they think. Knowing your users will help you create a better experience for them, and therefore create a competitive advantage for your company. This user behavior information comes from following the conversion process of the digital platform.
In fact, following this process will reveal what’s the most important moment for users – when do they decide to convert and when do they decide to drop. Making this process easy and user-friendly makes the digital platform successful.
What types of digital platforms are there?
The possibilities for digital platform types are endless.
Advertising platforms are some of the most popular ones. When talking about search engines, we think about Google right away. However, different countries, like Russia and China have their own dominant search engines. Furthermore, you can consider YouTube as a search engine platform specialized for videos, but also as a video platform like Dailymotion, Vimeo, etc.
Social platforms like Instagram, Facebook, and LinkedIn also have advertising business models. However, LinkedIn has a subscription-based business model as well, for users who use the premium version.
On the other side, Tinder can also be considered as both a social and subscription-based platform. Other platforms that have a subscription-based model include Spotify, Netflix, Dollar Shave Club, etc.
Digital platforms can also share knowledge, like LinkedIn’s Lynda, Stack Overflow, Coursera, Udemy, etc., or maybe just information, like Yelp, Glassdoor, Crunchbase, Angel List, etc.
Businesses that are selling physical products can sell through e-commerce platforms, like eBay, Amazon, AliExpress, ASOS, and Shopify, and through online marketplaces, like GooglePlay and AppleStore.
Digital platforms can be the most important asset of businesses that have a pay-per-use business model. Uber is probably the most popular platform of this kind. Amazon and Microsoft Azure have different versions for different types of this model, like PaaS (Platform-as-a-service), IaaS (Infrastructure-as-a-service), and DBaaS (Database-as-a-service).
What are the benefits of a digital platform?
The biggest benefit a digital platform can bring the business is that it puts people in the focus of the business. Having simply a website won’t do it.
Next, you can use the tools for many purposes, but incorporating them into a digital platform means taking exactly what the company needs. Each tool is a separate part of the process that has its own role.
This also allows the team who works on the digital platform to change each tool separately, which is also necessary since they all function like separate entities. Another good thing comes with the autonomy of the tools – when a problem occurs, it usually affects only one of them without disrupting the whole process.
As a matter of fact, it’s what all business owners need – a digital platform significantly reduces costs. It shortens the business processes and it doesn’t take a lot of time to be implemented. Moreover, maintenance and upgrades aren’t complicated.
What does it take to implement a digital platform?
Incorporating a digital platform into the business model isn’t a simple thing. This innovation requires creating new rules and processes.
Next, the company needs a new sector or an outsourcing partner that will create it and take care of it. Finally, it requires changes in the company’s goals, values, and mindset.
Organizations that are implementing a digital platform need to change their way of thinking and functioning. You have to adjust the business model to all the new tools, having in mind that every tool has a special role in the process. This might even require recruiting new specialists who will be responsible for different processes regarding the digital platform.
The digital platform needs to become a crucial part of the company’s strategy. Every process or activity needs to be planned in coordination with the platform and its functioning.
The change won’t be easy. Employees who are already used to current processes might even show some resistance. But, the customer satisfaction that will follow will be completely worth it.
Embracing digital platforms is crucial for a company’s competitive advantage. Not having a digital strategy means getting left behind, you can be beaten by the competition.
Technology is constantly changing and companies are the ones that need to follow these changes. It’s not even about courage anymore. It’s a necessity.