Mapping the Business Ecosystem
James F. Moore, in the early 1990’s originated the strategic planning concept of a business ecosystem. It first appeared in Moore's May/June 1993 Harvard Business Review article, titled "Predators and Prey: A New Ecology of Competition", and won the McKinsey Award for article of the year.
Moore defined "business ecosystem" as:
“An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. The economic community produces goods and services of value to customers, who are themselves members of the ecosystem. The member organisms also include suppliers, lead producers, competitors, and other stakeholders. Over time, they coevolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments, and to find mutually supportive roles”
Business Ecosystems are live and relevant today in the tech industry and are proliferating rapidly into other industries as well, driven by the digital transformation initiatives.
Silicon Valley is a classic example of business ecosystem where ideas can be transformed to businesses quickly due to the availability of resources across the ecosystem, which you cannot afford to build on your own.
Essentially, the business ecosystem is a network of players who create and appropriate value by competing and partnering within a defined scope of value delivery. The ingenuity of the players to create value and the application of digital technologies, breaks-down the barriers of the ecosystem and becomes a constantly evolving system.
Business ecosystems are blurring the traditional boundaries of industries. Industry structures and value chains are giving way to value networks and the inevitable death of NAIC and SIC classifications. The digital revolution and platform age is just making it worse. Co-opetition is inevitable. Fast-paced change is the only constant.
With such fast-changing environment, keeping track of it, adapting to it and taking timely decisions can be challenging. Mapping and Modeling the ecosystem and keeping track of the happenings in the ecosystem can be of immense value to Executives.
Modeling the ecosystem has always been in the theoretical realms and never faced mainstream adoption by executives in their decision making process. Partly due to the lack of relevant technologies that can keep enable modeling, adapt to changes, keep it updated and defining the boundaries on an ongoing basis.
Digital Technologies like Artificial Intelligence, NoSQL and Data Sciences are making this a reality today. Now. one has the ability to map and model the ecosystem, maintain currency and accuracy of the data and apply data sciences to derive “What Next” and “What should” insights for executives.
Such a tool gives enterprises the ability to maintain their own ecosystem model, custom-modeled for their ecosystem and co-exists with the organization’s enterprise systems, whether it is ERP, Supply-chain or CRM and enables insightful decision making.
Some of the application areas are M&A Research, Innovation Research, Competition tracking and Client Insights.