August 17, 2015

Understanding the power of Business Ecosystems - how one plus one will turn into eleven

Manish Kumar

Head Offering Management & Customer Enablement Consulting, Tieto

The word 'Ecosystem' has been there for ages; teaching us how to live in conjunction with other things around us in a mutually beneficial way. The interesting thing is that it's only now getting understood in the business world. The same principals of mutual co-existence and the ability to add unprecedented business value through mutual collaboration is sowing the seeds of these business ecosystems.

The simplistic beauty of this is that in these cases 'one plus one is not two but actually eleven' (1+1=11)! Let me explain this in a bit more detail.

Business ecosystems are when two or more companies come together to mutually create compounded business value, that none of them could provide on their own - something totally new and innovative. The power of business ecosystems has been well understood by us through technology giants like Apple and Google. Both have created their own ecosystems in the form of Apple App Store and Google Play Store, through which they have been able to bring smaller players into the equation to add business value for their end customers. At the same time, the big ones provided smaller players a means to reach out to a wider global audience.

What we have to keep in mind are certain basic principles, that make ecosystems successful, and apply them to new ones that we plan to create and nurture:

The inherent need to collaboration > As we know, with the pace of development accelerating in recent times, we have much higher possibility of developing something new by collaborating with the outside world rather than limiting ourselves to our surrounding. This opportunity is strengthened by developing business ecosystems and getting the right kind of players connected. New ideas can be developed rather quickly by applying collective knowledge and collaborating.

Thriving through the power of plenty > Successful business ecosystems have the ability to attract multiple players, take the example of apple iStore, Google Play or Amazon store. All these ecosystems have been able to attract multiple developers and content providers into the process creating business value for end customers and the players/businesses concerned. Thus an important element of a successful ecosystem is to attract volumes as early as possible.

Founding the business model with a win-win mindset > An important characteristic needed to make business ecosystems successful is to make them a win-win equation. An ecosystem should be designed and developed in a way that all players involved stand to gain by being a part of it. This way they would ensure further development of the ecosystem and not undermine its potential. The monetization of the ecosystem and the business logic supporting it are important for long term viability.

Leveraging the power of Cloud based platforms > Last but not least is the immense potential that Cloud based platforms provide in developing and nurturing business ecosystems. 'Cloud' can be considered another form of IT service delivery, however it brings with it certain characteristics that extensively support the development of ecosystems. a) Cloud provides a level playing field that can be scaled up/down as and when needed. b) If developed in the right way, it provides a standard way of integrating and exchanging data. c) It also provides the needed speed and agility for quicker development. All of these characteristics are crucial in order to meet the huge digitalization demands companies and public organisations are currently facing.

All in all, I feel that successful enterprises in the future would need to be either part of ecosystems or have the ability to define and nurture their own ecosystems. It would be very difficult for enterprises to create business value on their own. The sooner we in the business world open up to the power ofecosystems, the better it will be for our own future. Its time we embrace business ecosystems in a positive light and start to give them due credit and our full support!

Read more on how to digitalize your business and on Tieto Cloud services on

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