Accelerate Digital through a Service Marketplace..
An Enterprise service marketplace is an App-store or Google-play equivalent that provides automated services as Catalogs. Digital transformation will usher in changes in the way services will be procured. Say goodbye to the complex world of buying, building and implementing complex tools/automation platforms.
In our continuing Digital Service Model blog series, we are looking at various paradigm shifts impacting Enterprises. In the previous blog, we looked at how a subscription model will replace the more traditional buy/build/operate model.
Now we focus our attention on where services can be subscribed from. Once again we look to the consumer world for inspiration. Consumer world stands forefront in a lot of these innovations. Let us look at App-store (or Google play) which is the source of procurement for Consumer services and see what make it unique and path-breaking and explore if we can adopt a similar approach in Enterprise world as well.
The greatest innovation in the consumer world is the App-store model of procurement.
a. Setting a standard for Apps: App-store sets the standard for how apps can be packaged and transacted over a marketplace. Prior to Apple, users were well-versed with the idea of apps in a Nokia world. The apps came from the device provider and they worked well only with device. However, through an App-store model, Apps were virtualized, moved to cloud and made available for any user, anywhere. The portability, extensibility of apps were dimensionally improved.
b. Widening market reach for a provider: An App built by a provider in Sydney, could find suitable customers in Europe and India with minimal marketing effort. The nature and the scope of an app could be very small but they still found a way to monetize their solution. Their reach got exponentially high.
c. Offering variety of Choices for the consumer. The Appstore widened the search network for a consumer to allow him/her search for an app of their choice that is personalized to their needs. Features such as like/share/comments etc., helped them make an informed decision.
d. Enabling Disruptive Innovation for the industry: Appstore spurs innovation in terms of new digital business models that disrupt the ecosystem. Who would have thought that a food delivery or cab booking could be a global business powering jobs across multiple economies? They also displaced many legacy business models that did not scale.
e. Delivering Economies of scale for the ecosystem: App store ensures unit cost of apps are low for both the provider and the consumer. It also enables a variable cost structure for the consumer who pays for what they use. For a provider they build an app once and deploy it on the App-store to be downloaded by any user any number of times.
Let us look at the procurement process we are well versed with in the consumer world.
a. Any service is app,
b. Sourced from an app-store
c. Downloaded by a consumer to her/his smart phone
d. Where they can make a personalized order
e. And get them delivered instantly
Any service they need can be ordered anywhere, any time and delivered instantly.
The whole transaction is seamless and zero touch. Finding apps on your mobile phone is easy. You can use the wisdom of crowd through their ratings/review to identify any apps that cater to your service needs.
Source of Procurement: Your app-store is the single source of procurement for all your digital needs. Whether you want to measure your calories burnt or transfer money there are apps available from one common store.
Point of Consumption: Your smartphone becomes a single point of consumption, where your downloaded apps are personalized and available for your use at any time.
The concept of Source of Procurement and Point of Consumption seem all baked in one device for now. Many people dont think it really makes a big difference, however they are more pertinent when extended to an Enterprise world.
A lot of the services in consumer world are super complex ex: stock trading, money transfer, ecommerce etc. However, they have been simplified and offered in this model.
If complex services can be procured and simplified in the consumer world, there is no reason why it can not be extended to an Enterprise Service Delivery world. !!
Our vision for the future of Digital Enterprise:
In next 5–10 years, we see the Enterprises Service Consumption will follow a model similar to the one discussed here and move into exchanges and marketplace where services can be sourced at a click in a zero-touch manner.
The Enterprise Service Marketplace will host all pre-built fully automated services needed for organizations. Service providers globally, will constantly create and publish services on one side. Enterprises will subscribe and use these services on a pay-as-you-go-model on the other side. Each Enterprise will have their own service exchange where subscribed services are available.
The service Exchange will be omni-channel enabled for placing orders across any channel — web, voice, chat, mobile etc.,
The Enterprise service marketplace will serve as the Source of procurement for any automated service. A Service Exchange specific to an Enterprise will serve as the point of consumption for any service need.
Drawing analogies from the model outlined earlier
1) Any service that an Enterprise needs is a catalogue
2) That is available as a productized service in a marketplace
3) Can be subscribed at a click to a service exchange by Enterprises
4) Ordered by the user anytime, anywhere
5) Delivered instantly thru zero touch &
6)Metered based on consumption
7) Paid for based on their usage.
The benefits we saw with an App-store are exactly applicable in the current scenario too
a. Standards for Services: Service Marketplace defines a standard for how services can be automated and published by any provider across any platform. So whether you are provisioning a server on cloud or updating HR module on-prem or providing an Access to a folder, all services follow a common standard. All of these are automated and self-service enabled.
b. New markets for Service Providers: Service providers can create and publish services through the common marketplace . This approach creates a new revenue lever for them , while at the same widening the market reach with customer segments not established earlier.
c. Empowered users in Enterprises: Enterprises now have a variety of choices for services to choose from. If they are looking for an automated service, the first place they start searching is the Marketplace . This eliminates the need for long RFP processes and a faster procurement cycle with minimal commitments.
d. Disruptive innovation : Service Marketplace will spur disruptive innovation by industry domain /standard (Manufacturing specific services, GDPR compliant services, Pharma compliant services etc.) and across multiple tools and technologies. New services will continue to grow at a rapid pace not witnessed before.
e. Driving costs down: The service build and service delivery costs will go down significantly through this approach. While for a provider their incremental cost of automation and delivery goes low, for a customer the-end-to-end cost of discovery -thru-procurement and delivery will drop anywhere between 40–60% of their current costs.
Thus in summary, we see the Service Marketplace as a true game changer in the world of Enterprise procurement. The model aligns well with the need to Accelerate digital, provide enterprise agility, Reduce procurement costs and efforts. Enterprises that are quick to adopt this model will turn out to be true champions in maintaining competitive edge.
In the next blog, we will see how subscription costs could be variabilzed through this approach.