Dominating business-to-consumer sales, Amazon seems ready to take over the world of business-to-business too. In its first year, Amazon Business generated $1 billion in sales. However, there is still room for competition. It’s not yet an ecosystem driver in B2B, although the longer it takes for other business supply companies to catch up, the harder it will be to beat Amazon.
This is a good example of the importance of learning how to thrive in a digital ecosystem. Companies must learn to become ecosystem drivers – even if only for a subset of their customers – in order to survive. These drivers have become the destination for their spaces like Amazon with consumer products, Aetna with healthcare needs, and USAA for life events. So what does it take to be a successful ecosystem driver?
The first step is to assess your current business model. Are you an omnichannel business with an integrated value chain? Are you a supplier that sells through another company? Or are you a modular producer that adapts to other companies’ ecosystems? Most businesses today generate revenue with one or more of these models.
The next step is to consider how you will transition to an ecosystem driver model. A distinguishing feature of this model is that they are the destination in their space for a subset of their customers. And these companies have deep knowledge of their customers through data. They understand why customers are buying certain goods and services. This means knowing the customers’ names and addresses, demographics, IP addresses, purchase histories both with your company and other companies, and life events like weddings and births or (for businesses) upcoming mergers. To be a great ecosystem driver you will need to:
– Become the destination in your space
– Add complementary and possibly competitor products
– Ensure great customer experience
– Collect and manage customer data from all interactions
– Match customer needs with providers
– Extract “rents”
Read the full post at Xconomy
Peter Weill is a Senior Research Scientist and Chair of the Center for Information Systems Research (CISR) at the MIT Sloan School of Management.