CIOs need to take a leadership role in creating a business ecosystem: Gartner

Every organization needs a digital platform strategy, according to Gartner, Inc. It will take bold, modern leadership skills by CIOs to develop business ecosystems to improve their enterprises and tackle some of the world’s biggest challenges.

During the opening keynote today at the sold out Gartner Symposium/ITxpo, which is taking place here through Thursday, Gartner analysts defined a digital platform as a business-driven framework that allows a community of partners, providers and customers to share and enhance digital processes and capabilities or to extend them for mutual benefit. The framework allows for different combinations of business models, leadership, talent, deliver and IT infrastructure platforms that power digital business ecosystems.

However, Gartner analysts said decades old organizational strategies will inhibit digital transformation. The future organizational structure is cross-functional and bimodal. Bimodal is the practice of managing two separate but coherent styles of work: one focused on predictability; the other on exploration.

“Get rid of all habits that inhibit your bimodal leadership,” said Daryl Plummer, managing vice president and Gartner Fellow. “Turn bimodal into a continuous process. Not for just a single set of projects, but as an ongoing discipline.”

Mr. Plummer told the audience of 8,000 CIOs and IT leaders to pledge to themselves to develop their “beginner’s mind”, and rely less on outdated best practices. Gartner analysts used the example of a train operator questioning their best practices, and reinventing a core process. The traditional management perspective said getting really good at maintenance keeps costs down and train availability high. However, a beginner’s mind questioned why they had to schedule their maintenance. With a fresh perspective, they decided to listen to the train with Internet of Things (IoT) technology, and they provide maintenance now only when it’s needed.

Business Ecosystems

Digital platforms allow for companies to pursue business models that bring together multiple buyers and sellers. The platform business model is used by the most valuable companies in the world today. Business ecosystems are not just for the digital-only and/or mega companies. Gartner analysts stressed that every company will compete as a business ecosystem.

For example, designers of smart cities will build ecosystems to bring together partners of all sizes. Banks will bring new products and services to customers via an ecosystem of fintechs.

“Business ecosystems will form to improve your enterprises and help tackle some of our world’s biggest challenges,” said Hung LeHong, vice president and Gartner Fellow.

Digital Giants

“Enterprises are digitalizing all the things we use: appliances, automobiles, hospitals, wearables and payments,” Mr. LeHung said. “The digital giants, such as Apple, Google, and Tencent will take the ecosystem business models they have developed in areas such as e-commerce, music apps and search, and extend their tentacles into the connected world we have collectively created. They plan on making the physical world an extension of digital, into a world they control.”

As products and services become more digital, physical things connect to technology platforms that are controlled and viewed from software and apps. When that happens, the digital giants step in between many companies’ products and services and their customers.

This will be a difficult situation for many companies. They will have to decide to either join the digital giants or fight against them. Most consumer companies will choose to work with the digital giants. Gartner predicts that industrial companies will create their own ecosystems centered around heavy industries such as manufacturing, construction, and mining. A battle between ecosystems is inevitable.