Technology Vision 2015—Platform (R)evolution

ELISE: Welcome to the next edition of the Accenture Technology Innovation Podcast. I’m your host, Elise Cornille, and today I’m joined by Bill Lesieur, from the Accenture Technology Vision team. He is the author of the Platform (R)evolution chapter. Thanks for joining us.

BILL: Thank you, Elise.

ELISE: It’s great to talk with you today because platforms are pretty much I’m seeing all the rage. I don’t know, you get on social media, you talk to a lot of people. It seems to be something that a lot of people are chatting about, but one of the things

that I noticed was the intentionally spelling that you used of the Platform (R)evolution chapter with the parentheses around the “R”. So talk to me about how you got there and what that means?

BILL: Platforms are evolutionary. You’re going to start building them internally. They’re going to take you external. We kept being asked, well, what’s the revolution? The revolution was the ecosystem. The ecosystem’s going to change your world. It’s going to let you enter the digital economy, compete as a digital business and a software company.

ELISE: So how did you get to this trend? I’m always fascinated to know, you know, kind of the behind the scenes, what led you to come to even think about writing something on platforms?

BILL: I had a significant jumpstart in getting this chapter going. Prior to starting Vision 2015, I was working their Application Services group, building their 3 to 5 year vision. I led the primary research, which included the interviews of 25 executives, created the ideation and the hypothesis. And from the very start, platforms and ecosystems were a foundational element.

Podcast Transcript

Meaning the future of apps is about platforms and ecosystem. It was a very exciting that it rolled directly from that project into the chapter. And as a result of the Apps Services Vision, the point of view which is called The Future of Applications is on accenture.com. And you’ll very much see in the role section that enterprises have to be platform directors and orchestrators and ecosystem builders as a foundation of a digital business.

ELISE: So it sounds like one is very much interrelated with the other. Is that fair to say that, you know, the two are kind of bound together for the future so to speak?

BILL: Yeah, absolutely. In fact, that was also much discussion because there is complexity in explaining platforms today and explaining ecosystem. So we actually considered making it just about platforms because we had so much to say about it, but I certainly was the number one advocate. We can’t talk about one without the other. Platforms are the foundation that opens the door to the digital ecosystem.

ELISE: Yeah and, you know, and this ties back to the – this idea of ecosystems, we introduce it at a broad level in this year’s 2015 Vision. The We Economy, the idea that, you know, who you team with is very much going to define who you are and how you’re going to compete in the future. And I saw one of the stats that you included in your trend that 4 out of 5 of the companies we surveyed this year, believe that industry platform boundaries are going to completely change because of these ecosystems that you’re talking about. So I want to dig in a little bit, you mentioned, you know, ecosystems and their importance, what are we looking at here? What’s changing?

BILL: Yeah, that’s the most fascinating element here ‘cause

early on the hypothesis was clearly industry boundaries will blur or, in fact, completely go away. For example, in five years, the traditional finance industry will look completely different. Anyone can be a bank. You can be a bank, all through digital technologies. So I built that right into the survey and, sure enough, the results, you know, are right on target. If you go look several years ahead or five years ahead or ten years ahead, all traditional industry boundaries will be redefined. They’ll be ecosystems of ecosystems. There will be a completely different view of the world. It’s not about a traditional industry positioning and industry structures. That’s kind of the – that old school thinking is gone. You have to look at this a different way and really understand what ecosystems are about.

Companies of all types will be reaching across the traditional boundaries into other industries and coming up with brand new business models and ideas that just weren’t fathomed ten years ago, let alone five years ago. And the main reason is you’re able to build these platforms because the barriers to entry have been diminished. So be it cloud or APIs or, you know, mobile development platforms. That’s all eliminated to barrier to entry. Non-tech companies can do this now. It’s not just for Amazon, Facebook and so forth. Any company can do it now.

ELISE: So let me ask you about that. When a company’s trying to think about making a platform play, is their first stop is the mindset that they should be creating that technology platform? Is it a teaming thing? You mentioned a couple of building blocks, where if I’m a company, say alright, I’m game, where do I start? Where do I go? Do I build this platform? Do I buy this platform?

BILL: The majority of these platforms from non-tech companies

will be based on public and hybrid cloud platforms, as simple as that. There will be some cases where companies will develop it from scratch, but I think those are very unusual, also very expensive. So, for example, GE is building their massive industrial internet platform on Amazon Web Services. It gets them to market faster, lowers their cost and they leverage the expertise of the cloud partner.

ELISE: What role will innovation play in this? ‘Cause I think about this teaming relationship that you’re talking about, public and private cloud, and there’s obviously going to be a lot of different partners in this platform ecosystem. Who’s the innovator there?

BILL: Well, we were calling it the innovation sandbox within the chapter. And the platform gets you external to be a digital business player and your ecosystem relationships opens up your opportunities. The majority of your innovation is going to be generated externally. The point is to allow others to innovate for you. It’s fundamental to the open innovation concept which is reaching outside for innovation. You can’t do it all yourself and in companies big or small all agree with that. The innovation will be external and the value creation will be external. Majority of the value creation for Apple is created by others for them and their high profitability is directly linked to their platform play and their ecosystem of developers.

ELISE: So this sounds like hard work, you know, even if it is teaming with others. So to play in the platforms and to do it as a large enterprise, it’s going to have to be a big play. So what are the things to watch out for because this is tough, you know, and it seems like there could be many opportunities to kind of stumble. What are the big risks?

BILL: It’s a multi-year process. You need to start somewhere and very much you should start internal. Ecosystems don’t always mean external. Ecosystems are internal as well. Create your platform play internal, start using APIs, engage with your company just as they were external developers. That’s your testing ground, make sure it works, then expand to your existing established partners and create digital relationships with them. So you can incrementally work into this and then when your risk comfort is there, then you can start reaching out to new digital partners within your industry, then ultimately crossover. But the idea is, you know, try these new ideas, see if they work, let them fail and move onto the next one.

ELISE: I like that idea of letting them fail. I think that’s often something that people don’t want to see, but it’s in many cases we’re seeing, especially when you’re trying to be a pioneer in technology, it’s kind of part of the playbook.

BILL: Yeah, absolutely, try these new things quickly and that’s what the platform will do. Components of the platform include, you know, agile and dev ops and so forth, will allow you to go out there, you to quickly find out if it works. And then more importantly, let others try it out and see if they can make it work. You may have five different developers trying to solve a problem in different ways. Maybe they’re all solve it, maybe one will solve it but, you know, in some sense you’re pushing that risk external. You’re letting your developer community solve some of these problems, so it’s not all your R&D spend and it’s not all your risk.

ELISE: So cyber security is a concern for everyone these days for a variety of reasons, you know, and one of the reasons that it occurs to me during our discussion is we’re talking about an ecosystem and we’re talking about teaming with others. How do you even look at

security in this brave new world of platforms? It seems to me like it could be a potentially broader exposed risk landscape here?

BILL: Absolutely. Security needs to be built in from the beginning in the platform approach and part of the architecture. And then as you create your ecosystem, the fundamental part of that is your governance model. That has to be built from the beginning. It’s not an add-on. And the governance model is about how you’re interacting as digital businesses with other digital businesses. And then more so, what’s the data governance under that and the data architecture. You have to know where the data’s going, how it’s being shared, who owns it at these different points and where’s the liability in this data? You have to have a smart data architecture that ranks the type of data, which data has to be absolutely followed and secure, all the way up to open data which does not. And this very much relates to your API architecture and strategy that will dictate what’s public or private APIs and associated data that’s flowing through those. So that’s a part of your platform ecosystem that, you know, cannot be forgotten. It has to be built in from the beginning and you’ll need specialists that that’s their full time job.

ELISE: So looking back now that the Vision is out and I know that the writing process, as I was with you guys, it took a few months there, is there anything now that you wish you had in the chapter?

BILL: Oh sure, but my chapter would have been four times as long.

ELISE: It would have been its own Vision?

BILL: Yeah, so yeah, it just couldn’t turn into its own 100 page. I had plans for expanding the ecosystem section to show what are the four or five different kinds of ecosystem models, you know, from very

simple, using existing partner as your digital partner, all the way up to what I call over the top ecosystems, which would be GE’s Predix Platform, that’s not only connecting 40 of their products and services and business units, but it’s going to be hundreds of partners external. So I really wanted to dive into those different models but, you know, we just enough space for that.

In another section, which we had to cut back on, is the network multiplier effect. The multiplier effect is probably 100 year old economic theory, so certainly our friends in the academia world would have loved for some more there. But, although, this theory has been around quite some time and actually Bell really pushed it when they were trying to push the phone system. They were making the case that we needed to allow them to be a monopoly in 1906 was the multiplier effect. Phones have more value when they’re all connected and that was their basic premise. So fast forward today, the network multiplier effect is taking on a whole new world here. As you reach out as a digital business, the power of that ecosystem just explodes and it really comes back to this basic network multiplier effect. Definitely wanted to expand more on that so, but we had to kind of reduce that a bit.

ELISE: Well, thanks again, Bill. This has been a great discussion. You know, platforms surprisingly revolutionary, evolutionary as you said. So come back and let’s talk about what you’ve seen in a few months ‘cause it sounds like a very fast moving space.

BILL: Absolutely. Thank you for having me and I’m going to continue to be looking at ecosystems and, you know, how that’s changing the digital business world.

ELISE: Great. Where can we find you on social media?

BILL: You can find me on LinkedIn and Twitter.

ELISE: Great, well, we’ll definitely have you back. We’ll have folks connect with you on social media.

Well, thanks everyone again for joining us on our Accenture Technology Innovation Podcast.

Join us next time when we will be talking about the Intelligent Enterprise, which is Trend 4 of the Technology Vision 2015.

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