How Digital Ecosystems Transform the B2B Market?
From one technological wave to another, the digital revolution questions the processes, the economic model and even the very nature of business activity. This is the case of the Internet of Things (IoT) in the B2B market.
Its deployment in the factories 4.0 optimizes the processes of the production chain, improves quality control and introduces predictive maintenance. But the value creation potential of IoT goes well beyond that. By leveraging an expanded ecosystem with partners from industry and other sectors, connected objects technology can generate a large amount of data.
It is from their collection, advanced analysis and processing that new value added services are born. These digital “products” centered on market needs create growth and a competitive advantage that has become crucial in an economy where positions are constantly challenged by disruptive players.
As we know today, the strength of digital giants like Amazon, Microsoft, Google, Facebook or Apple is based on their ecosystem. Their business model revolves around their networking platforms and their powerful marketplaces. This control of the ever increasing number of data guarantees them a dominant place.
In the new digital economy, animating an ecosystem or contributing to it represents a lever of performance and a condition of survival. It is therefore essential to put the subject on the agenda of a digital transformation. The B2B market is no exception to this rule, even if we should not know the level of consolidation of the platforms observed in the B2C. Strongly structured around traditional industries sometimes centuries old and organized into oligopolies, it is indeed more demanding in the expertise of the data. Instead, we will witness the parallel development of several ecosystems around strategic projects involving the know-how and technologies of a group of targeted actors.
The principle remains the same: to move its economic model towards the monetization of internal and external data. For B2B, the transformation resembles that experienced by the technology sector in the 2000s to move from a hardware culture to a culture of services and applications. Most companies in the heavy and manufacturing industries are mobilizing their resources to deploy digital solutions in their factories. They are rarer to engage in an ecosystem. However, the digital transformation is accelerating and the least advanced should, as of now, define a longer-term strategy.
The first is a prerequisite. It is indeed necessary to have internal digital skills and platforms necessary for the collection, integration, analysis and securing of its data. We need to ship sensors, processors and connectivity technologies in equipment and industrial products.
Beyond these investments, the company must adopt the agile and multidisciplinary digital approach. In a second step, applications develop on the basis of internal data to improve product quality and performance, reduce costs and shorten decision-making.
The third step marks the break by integrating data produced by other sources and made available within an ecosystem.
This monetization of external data significantly increases the revenues and the profitability of the B2B activity. According to our observations, the net margins can reach 15 to 25%. Companies have been able to expand and broaden their service offering, have differentiated themselves by developing advanced applications around Artificial Intelligence or have entered new markets.
Remains a key step: identify strategic opportunities. These choices will determine the company’s place in the win-win model of an ecosystem, as a contributor or as a facilitator.