Everywhere we look, the technology industry is undergoing a digital paradigm shift that impacts businesses of every sort. With this profound transformation comes an unprecedented opportunity to deliver solutions offering greater value to customers.
From vendors and distributors on to resellers, ecosystem partners are busy refining their services and offerings to maximize ROI, optimize speed-to-value and to explore new revenue streams in this changing digital world. They are developing new competencies and shifting their focus from licensed product transactions to a service deployment model leveraging the cloud. Moreover, they’re transitioning from the sale of one-time purchasable licenses to a subscription model for services.
For their part, customers are at work carefully assessing their own digital maturity. Seeking to keep stride with the rapidly digitizing world, they’re evaluating their existing systems and workloads, aiming to ensure that they are utilizing customized offerings of the latest technologies and varied deployment models to meet their unique business needs.
Prioritizing Customer-Centric XaaS
Increased demand from customers for customized offerings means that any ecosystem partner has the potential to thrive in the service economy, where nearly everything can be delivered to customers as a service. End customers are increasingly receptive to unique service offerings, flexible billing models and new ways of using and accessing products – all of which provides a unique value opportunity distinct to the service/subscription economy.
This translates into innovative and dynamic opportunities for technology vendors who maximize their everything as a service (XaaS) and subscription-based products and service offerings. While technology has created the opportunity in the XaaS economy, it is paramount that vendors look beyond technology and focus on the customer. When any product can be found as a service, customer satisfaction and outcomes become essential to securing customer loyalty and, ultimately, are key market differentiators.
Introducing ‘Outcomes as a Service’
The outcomes-as-a-service model takes traditional technology service models one step further by delivering actionable business outcomes. Rather than providing dashboards and data like software as a service would, the outcome as a service model provides predictive and prescriptive outcomes for customers to react to a changing landscape in real time.
According to Forrester, marketplace development platforms are moving towards outcomes-as-a-service offerings that combine a bill of materials with human services, remote monitoring, and digital services. OEMs, meanwhile, are finding innovative ways to integrate IoT, AI, and digital twin technologies into their products to provide customers with increased value. Equipping products with IoT sensors, and utilizing digital twin and AI technologies, their as-a-service offerings can track and optimize the performance of these smart products throughout their lifetime, providing quantifiable outcomes.
Customer outcomes are even more impactful when these smart, connected products are transformed from discrete products to product systems. These product systems can “plug into” a system of systems coordinated and optimized for an entire environment, such as a smart building, a smart home or a smart city.
OEMs whose products and designs have the greatest impact on total system performance will be in the best position to drive this transformation and capture disproportionate value.
Creating Composable Systems from Services
The ability of a business to react quickly to unforeseen events (e.g., the COVID-19 pandemic) is based largely on the “composable” nature of that business. According to analyst firm Gartner, “composable business” means creating an organization made from interchangeable building blocks. This modular setup enables a business to rearrange and reorient as needed depending on external or internal factors, including a shift in customer values or a sudden change in the supply chain.
Becoming a “composable business” involves decomposing traditional monolithic business systems (e.g., CRM, ERP, HR, commerce) into decoupled, packaged business capabilities (PBCs). These PBCs can then be uniquely re-composed into a system of systems serving a more focused business purpose with complex business requirements.
Each PBC is a self-contained system that can be deployed independently. A PBC has the benefits of a “microservices” approach, but with the appropriate granularity for an XaaS offering. Open technology can enable interoperability between PBC services for seamless integration (and removal) of constituent systems, while digital marketplaces can align XaaS selection criteria towards PBCs.
Below is an illustration of a composable commerce system of systems, where each constituent system is a packaged business capability delivered on a service model.
Orchestrating the Digital Ecosystem
The pace of change in technology, particularly with the advent of digitally enabled smart systems and IoT technologies, is too great for any single company to provide end-to-end solutions. Therefore, a composable system from multi-vendor XaaS offerings requires a digital ecosystem of trading partners.
A digital ecosystem itself can be represented by a complex, multi-level system of systems. Each ecosystem partner’s composed commerce system-of-system can be further composed into a system-of-systems helping form the ecosystem that enables information exchanges between trading partners.
The ecosystem orchestrator defines the blueprint for interoperability, including a common information model and open APIs. This blueprint is the foundation for orchestrating end-to-end solution delivery through the digital ecosystem.
Ecosystem orchestration allows partners on a common business platform to easily and dynamically exchange, combine and monetize their services. They’re also able to introduce new digital offerings at speed, sell joint offerings and create new business models. Ecosystem orchestration ensures automated orchestration and provisioning of all services across the ecosystem.
Partners can define revenue sharing and flexible partner settlement agreements for selling their services through ecosystem partners and managing relationships with business partners. Ecosystem orchestration and management additionally enables consolidated partner settlement billing and invoicing, independent of end customer invoicing and settlement.
Looking to CloudBlue
Considering the complexities of ecosystem orchestration and their impact on time to market, organizations must inevitably confront the question of how best to effectively and efficiently enable the digital ecosystem. For this, large enterprises have consistently turned to CloudBlue. Drawing on time-tested best practices, CloudBlue has invested over 15 years building features and capabilities that enable and orchestrate ecosystems.
The CloudBlue solution stack and its granular architecture enable ecosystem orchestration for all entities constituting a digital ecosystem. By offering granular services such as vendor, catalog and subscription management, plus billing, invoicing and multi-channel, multi-tier capabilities, CloudBlue streamlines and automates end-to-end digital supply chain management in a digital ecosystem.
Recognized by Forrester as a leader in digital marketplace development platforms, CloudBlue contributes thought leadership on ecosystem orchestration to industry consortia including the Digital Twin Consortium.
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