This past week, we saw a variety of major automotive companies announce their plans to make massive investments into the future of electric vehicles. (For example, see Mashable’s article Here’s how every automaker plans to go electric. Taking a step back, the question that should be asked is how will all these companies transform the way they are manufacturing?
As technologies are rapidly transforming the way we design, build and deliver products, both startups and enterprises alike have identified one solution that is allowing them to seamlessly make these transitions and alter the way they manufacture products. So what’s the universal link between these sizably different business models that is leveling the playing field between legacy companies with traditional processes and more agile start-ups with less institutional knowledge to build upon?
Adopting a B2B platform strategy.
Marshall W. Van Alstyne, co-author of Platform Revolution, defines the platform as a nexus of rules and architecture where the architecture provides a framework for exchanging and creating value. The rules govern the business of how people interact. So, why are companies choosing platforms to help businesses drive new strategies and innovation across industries? Here are three main reasons:
Through digital platforms, companies are able to connect departments that were once disparate and streamline processes from concept to creation — a major game changer for the workflow of engineers, designers and the manufacturing process. As we enter a new era of manufacturing where platform technologies are facilitating end-to-end innovation, companies who hesitate to adopt will inevitably fall behind — or worse, collapse.
Platforms allow a seamless exchange of data — or a digital thread — creating a traceable stream of available information. Ideation, design engineering, manufacturing, sales, marketing and after sale will all be woven together by that thread that platforms have the ability to create. The National Institute for Standards and Technology (NIST) has even launched the Digital Thread project to “define and standardize methods and protocols for exchanging and transporting information to enable easy integration of smart manufacturing systems and accelerate the design to production timeline at reduced costs.”
Brands big and small are transitioning to platforms to enhance collaboration and productivity, and enable employees to identify new and more innovative approaches to product differentiation in the marketplace. Take the massive shift P&G made to a platform: In an industry where consumer preferences and competition change so rapidly, business priorities must also be able to shift and adjust just as quickly.
P&G recently transitioned to the platform to not only support their digital transformation initiative, but offer their employees a better resource to access project data so that it is traceable, shareable and reusable. Teams save massive amounts of time not having to rework while simultaneously being fed data that allows them to quickly identify consumer trends.
Planning for the Future
Because platforms are flexible and scalable, businesses are relying on these technologies to manage changing product complexity, transformation of business models and coordination of activities. As design and manufacturing evolve, the platform enables a path for innovation and exploration into the future of industry. Every business must understand what consumers want presently, but a bigger challenge is that they must also predict what future needs will be. By collecting data sets around consumer and industry trends, the platform allows users to analyze and ultimately predict and plan for new products. Because it’s a more streamlined approach, not only do businesses save on time, they also reduce the possibility of errors.
Major airplane manufacturer Boeing recently announced a multi-decade investment in a platform to manage manufacturing processes. This long-term commitment is a sign of what Boeing sees as the future of manufacturing and validates the significant benefits of the platform now and tomorrow. Through the platform, Boeing’s team can stay aligned on new concepts and design innovative aircraft while managing operations in one singular place.
Because platforms spark a more collaborative environment, there’s a greater opportunity for individuals to come together and identify opportunities for disruption. To remain competitive, smart leaders know they must innovate their business processes to imagine the future both with and for their end-consumers. We’re already seeing a significant shift in organizations committing themselves to business platforms. Frost & Sullivan predicts that B2B platform commerce could result in sales of $6.7 trillion by 2020, double the amount it projects for B2C business.
We’re already witnessing the disruptive power of the platform today. Tesla is shattering traditional business models in the automotive market. By building its solutions rapidly on a platform, they can quickly eliminate data boundaries, compress lead times and reduce unnecessary costs.
The rise of platform adoption will only continue to grow as the digitalization of business becomes a must-have rather than a nice to have. The platform houses the most important business functions in one place — improving productivity, accelerating innovation and supporting the pathway to the future of industry. It’s an exciting time to see which brands evolve and which ones lag in this era of digital transformation.