April 2018 Business SCAN
Ecosystem has entered the vernacular of everyday business. Terms such as “business ecosystem,” “collaboration ecosystem” and “economic ecosystem” are now being used universally as people seek to articulate the future of business and customer interactions. But an ecosystem reflects much more than a network and it differs fundamentally from a market.
The whole is greater than the sum of the individual parts
Ecosystems exist because participants can deliver more value within the ecosystem acting together.
Many organisations are experiencing a duality in their strategies. In effect, while they keep focusing on their core businesses in and around their primary industries, they will also likely seek additional growth opportunities outside traditional sources, capitalising on particular functions or activities that constitute their true competitive advantage.
As economic value rapidly moves beyond traditional markets, organisations will need to rethink how their business environment operates, how they partner and how they interact with customers. Combined, this is demanding the emergence of new economic ecosystems, as organisations recognise they cannot navigate this future alone. They must embrace the concept of mutuality, a level of formal or informal collaboration among organisations around shared ideals, standards or goals.
Ecosystems architecture breaks from traditional markets
The defining characteristics of an ecosystem — those things that fundamentally make an ecosystem what it is — are mutuality and orchestration.
Markets are comprised of individuals or organisations who exchange products or services within an environment governed by the laws of supply and demand.
Ecosystems comprise entities that operate out of mutual self-interest. They are made of sets of individuals who formally or informally operate together to produce something of greater value for the mutual benefit of the organisation and the ecosystem as a whole.
In a business context, an ecosystem is a complex web of interdependent enterprises and relationships aimed at creating and allocating business value.
Sources: Davidson, S., Harmer, M. and Marshall, A. (2014) The new age of ecosystems: Redefining partnering in an ecosystem environment. Executive Report, 1st ed. Somers, NY 10589: IBM Global Business Services.
Consider how your organisation could play an important role in the ecosystems surrounding you. Try to give an answer to the above two questions: What can your organisation do to create value and how can your organisation make sure to capture the value you’re taking part in creating?
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