Designing Digital Organizations

Designing Digital Organizations

          
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Designing Digital Organizations

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    Ecosystems

    Ecosystem design is another important dimension of digital businesses. Amazon, eBay, and Apple were among the first to recognize the power of ecosystems. Company executives at Schneider Electric realized that they needed to design a partner ecosystem. Ecosystem members can include customers, suppliers, business partners, and researchers.

    In 2011, Intuit, a company that had been “born digital” in 1983, embarked on a multiyear transformation, creating a new operating model that was based on interconnected services for customer ecosystems. Michele Iacovone, senior vice president and chief architect, describes what happened next: “As the company started to move from desktop to software-as-a-service (SaaS), and now clearly and aggressively mov[ed] towards [the] cloud, the realization has increasingly become that we couldn’t operate successfully as a series of portfolio business units. Rather, we needed to get synergy across all of our major customer bases and constituents. It was really, really important, and ultimately it’s what we believed would fuel the growth of the company. So we’ve been, over the last four and a half years, moving from what we call being a portfolio company to an ecosystem. And the ecosystem is really centered on three kinds of core stakeholders: our small-business customers, accountants, and consumers. It is a radical transformation.”

    By 2015, Intuit had connected its customers with other customers, accountants, and tax preparers through Intuit communities, question-and-answer exchanges, and blogs. Intuit is now using these connected services as a platform, along with its software products, to drive the ecosystem and help the company leverage the “network effect” by making knowledge gained by one individual accessible to everyone else in the network.

    John Deere leaders recognized that connecting its machines and the farmers that use them to data and software beyond what Deere was able to offer on its own could help farmers significantly improve their businesses. SaaS agricultural applications, such as Climate Cloud, were becoming available and so were big data applications for topics such as weather forecasting, plant genomics, and agronomic studies. The company expanded its offerings by making its own software available to third-party solutions, leading to a more comprehensive set of services that help farmers. The ecosystem includes farmers, John Deere dealers, software companies, seed and fertilizer manufacturers, and university researchers.