It’s stating the obvious: Digital business ecosystems create value. When you connect customers, partners, applications, and all the respective technology—whether hardware or software, information technology (IT), or operational technology—such ecosystems can deliver significant growth, innovation, and customer satisfaction.
Yet two essential factors for realizing their full potential remain elusive: the view of ecosystems as self-perpetuating systems, and the genuine commitment to collaborate with a diverse range of partners.
Digital business ecosystems unleash their power in shared platforms. These curated environments allow companies to join forces, cocreate, and innovate with partners for customers. As more partners join, ecosystems get new products and services to market faster. They speed up change, create new revenue streams, and facilitate private-public collaboration. They are powerful tools to tackle complex problems, such as accelerating sustainability.
Creating an Ecosystem of Ecosystems
Participating in—or even establishing—a digital ecosystem is all about building scale in your industry. It’s about making the transition from offering a product or solution to offering a business platform that helps others create and consume value.
Customer demand and changed market conditions rely on the power of ecosystems to let organizations that operate far apart from one another in various settings collaborate on a shared platform.
Siemens augments its own capabilities by working with a range of partners, including the two leading global cloud platforms, Microsoft Azure and Amazon Web Services (AWS), to develop joint products, solutions, and go-to-market initiatives.
One global leader of low-code development, Mendix, a Siemens business, is reinventing the way applications are built in the digital enterprise. Its platform is designed to boost collaboration between business and IT teams and accelerate application-development cycles to help enterprises leap into their digital futures.
Organizations use Mendix products not as one ecosystem, such as a developer or manufacturing ecosystem, but as an ecosystem of ecosystems.
Mendix has created an ecosystem of 230,000 developers and more than 300 certified partners, which built 120,000 applications in 2021. And its recently expanded partnership with AWS is enabling customers in banking and insurance to use Mendix applications to jump-start intelligent automation initiatives, streamline business processes, improve customer experiences, and accelerate innovation.
Turning the Flywheel
The more open and scalable an ecosystem is, the faster it will create a flywheel effect to attract more participants, enriching the diversity and power of the ecosystem. The holistic returns on investment such systems deliver include:
- Partnerships that grow business opportunities
- Economies of scale that reduce capital expenses and operating expenses
- Faster digital and sustainable transformation
- Access to IT tools and techniques that enable innovation
- Seamless integration of decarbonization into as-usual business processes
- Addressing talent-shortage issues
Ecosystems offer huge opportunities to tackle business transformation sustainably, and ambitious private-public partnerships around the world already are implementing them.
Smart Cities Are Ecosystem-Centric Cities
“Smart cities are a great example,” says Peter Koerte, chief technology officer and chief strategy officer at Siemens. “Not a single technology, company, or urban authority can master the challenge of creating one on their own—and that’s why we believe so strongly in working and cocreating through ecosystems. Tackling the duality of digital and sustainable transformations together leverages exponential growth in data to enable the race to the bottom, net-zero, in sustainability.”
Aspern Smart City in Vienna is a living laboratory, using the networks of technology partners Wien Energie, Wiener Netze, and Siemens, and researching how smart energy systems and intelligent buildings operate together in an urban neighborhood. Aspern’s buildings communicate with occupants, Austria’s smart grid, weather services, and the energy market.
Siemens’s cloud-based internet of things solution City Graph connects a broad range of devices, using Microsoft Azure services that include machine learning and advanced analytics. City Graph can even create a digital twin of urban areas to enable city planners to model the relationship among spaces, devices, and people. By doing so, it provides an open digital ecosystem for solutions specialists to integrate and deliver sustainable value for metropolitan areas.
From Ego-Systems to Ecosystems
Before the pandemic, some critics referred to ecosystems as “ego-systems” because of their inward focus. But companies that seek to use the full range of expertise and resources available to resolve problems need to embrace full collaboration.
“We must do more than just provide digital solutions,” Koerte says. “By establishing truly open platforms and an ecosystem of customers, partners, and cross-industry players, we can harness the full potential of digital and sustainable transformation by adapting an open model of shared values. This means building trust, sharing resources, and using common technologies.”
And trust is unthinkable without security. The more our world is getting connected, the greater the risk of cybercrime. An organization can achieve all the benefits of an open business ecosystem only when it adequately protects that ecosystem against cyberthreats. That’s why ecosystems must be built with security from the beginning, and why digital systems and cybersecurity need to evolve together.
No single technology provider can master all the challenges of digital and sustainable transformation alone. Partnerships are the driving force behind the digital business ecosystem logic. And the more diverse your partners are, the stronger your ecosystems become.
Read “Digital Transformation in Industrial Companies,” the Siemens-sponsored report by Harvard Business Review–Analytic Services.