Let’s take the SBI, for example. A few months ago, SBI’s Buddy touched 10 million downloads. This is significant for two reasons. It shows that India’s largest and oldest bank is disrupting itself in the face of digital disruption. On the back of a digital strategy, it is on its way to carving a position as a bank for millennials, who contribute 70 per cent of total household income and are the largest borrowers today.
It also demonstrates the value of platform-led innovation. SBI’s Buddy is a mobile wallet, which creates value for everyone who connects to it. Customers can access a range of service providers for everyday needs such as taking a bus or booking a movie ticket, connecting and transacting seamlessly, and service providers gain access to millions of new customers. Platforms are all about unlocking value for the ecosystem by allowing it to compete as a cluster.
The platform economy enables more inclusive growth by providing three distinct benefits to small and medium enterprises — access to new markets, entry into new supply chains and a new area for business innovation. Consider as evidence the success of niche consumer product companies using marketplaces such as Amazon to take specialised products to global consumers or the opportunity to easily partner with large companies such as Philips, which is reinventing itself as a health technology company, delivering improved outcomes by bringing together medical providers and digital pioneers to provide consumers with better health care experiences. Similar models are being replicated by GE, Siemens and others, making it easier for small businesses to join advanced supply chains. Finally, consider the emergence of many unicorns from India over the last 10 years, several of whom are platform players.
The power of platforms isn’t entirely new. The Industrial Revolution, too, was brought about by a type of platform — factories. Factories harnessed the technological disruptor of that time — electricity — bringing together workers, raw materials and delivery channels to enable more efficient manufacturing. Similarly, today, platforms enabled by disruptive digital technologies are uniting customers and providers in large-scale digital markets.
Platform ecosystems are emerging as important value creators globally, and strategic growth opportunities for the future. According to IDC, by 2018, more than 50 per cent of large enterprises will create or partner with industry platforms. Digital disruption is a reality, and for businesses, it’s no longer a question of whether or when but how they should move forward now.
The author is country managing director, Accenture India