Businesses not participating in the digital ecosystem as a platform risk disintermediation, and the IT distribution channel is no different.
The Enterprises Project website has an article titled ‘Digital transformation: Why it pays to be a platform business’ in which it posits that ‘If you’re not participating in the digital ecosystem as a platform, you may become disintermediated.’
In it, author Anil Cheriyan writes that digital transformation is pitting two types of businesses against each other: platform-oriented businesses and traditional ones that operate like supply chains. To become more relevant and thereby survive in this digital era, traditional businesses must transform themselves into platform-oriented businesses.
According to Anil, the digital era is elevating platform-oriented companies at the expense of traditional supply-chain-oriented companies. The move to digital, mobile, and the ability to have information at your fingertips has enabled ecosystems to form in the marketplace, allowing clients to interact in multiple ways with their providers.
The Three Pillars of Platform Businesses
As such, platform-oriented businesses are built on three pillars: the client, partnerships, and the digital transformation of the organization.
Getting to know one’s client, being responsive to client needs and building mutually beneficial partnerships is nothing new for businesses. However platform-oriented businesses also need to ensure that they’ve aligned and transformed their internal systems for digital transformation.
The article mentions that in order to transform digitally, businesses need to have an open, modular, API-based architecture and the ability to spin up new services as needed, when needed.
Having a platform able to store and process relevant data and analytics is hugely beneficial and companies need to have elasticity in their infrastructure, ideally leveraging cloud technologies to respond to environmental and capacity volatility.
Anil states that digital transformation is the most difficult factor to master for a traditional business trying to transform themselves to become more platform-oriented, mentioning that it takes the most investment and has the most likelihood of failure.
Although large enterprise IT channel businesses have the financial resources to build out their own digital distribution platforms, they do not always have the necessary expertise to do so, whilst smaller channel businesses can lack both the finances and expertise.
Not only do platform businesses have a speed and data advantage, but vendors are increasingly insisting on and leveraging global distributor platforms (or creating their own), whilst end-users expect to engage on sophisticated platforms which allow them to learn, shop, buy and service their purchases.
Channel businesses which cannot develop their own platforms are thus looking to external platform providers, whilst attempting to become open and agile in order to internally orient themselves around the new digital mindset.