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14-15 September 2016 Lisbon, Portugal #DeloitteSharedServices Deloitte Shared Services, GBS & BPO Conference Plenary 9: Business ecosystems come of age – Implications for business models and shared services Jacob Bruun-Jensen, Deloitte
Transcript of Jacob Bruun-Jensen, Deloitte - Amazon...
14-15 September 2016
Lisbon, Portugal
#DeloitteSharedServices
Deloitte Shared Services, GBS & BPO Conference
Plenary 9: Business ecosystems come of age –Implications for business models and shared services
Jacob Bruun-Jensen, Deloitte
The Story of eHow.com – Today the world’s largest ‘How-To’ Platform
Why Leverage Business Ecosystems
50 Million
Website
VisitMonthly
33 Million
Video
StreamsMonthly
+1 Million
‘How-To’
Content
4.8
Million
Social
Followers
The story of eHow.com – Rise of the Phoenix
Why Leverage Business Ecosystems
50,000
45,000
40,000
35,000
25,000
20,000
15,000
10,000
5,000
0
Monthly Unique Visitors (UV’s) [‘000]
eHow.com founded in
March 1999
Received equity
funding of $23.5 MM
eHow.com filed for
Chapter 7 bankruptcy
with $7.2 MM in debt
Bought out of bankruptcy
by Idea Exchange
(undisclosed amount)
eHow.com bought by two entrepreneurs for $100,000
Grew UV’s from 40k to
5.5 MM✗ FAILED
✓ SUCCEDED
✗ FAILED
eHow.com bought by Demand
Media for an estimated
value of $40 MM
Demand Media went public (IPO),
valuing eHow.com at USD 315 MM
✓ SUCCEDED
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
eHow.com 2.0 succeeded by changing its business logic and leveraging business ecosystems
Why Leverage Business Ecosystems
Consumers
Google AdSense
FreelanceWriters
Content(how-to)
The world is changing and we are seeing a “decoupling” of the value chain
What is Changing
Constantly
Connected
Reduced
Barriers
To Entry
Decoupled
Value Chain
CUSTOMER
COMPETETION
CONFIGURATION
Experience
Driven
Non-
Traditional
Sources
Reduced
Ownership of
Assets &
Infrastructure
New
Economics
Emergence of
Ecosystems
New Profit
Models
Business Ecosystems are formed to achieve something together
What are Business Ecosystems
Ecosystems are dynamic and co-evolving communities of diverse actors who
create and capture value through
increasingly sophisticated models of
collaboration and competition.
In Alibaba’s 2014 IPO prospectus, it used the word
“Ecosystem” 160 times
There are different archetypes of ecosystems and businesses can play different roles
What Are Different Types of Business Ecosystems
CENTRALIZED ECOSYSTEM
The business model is the Orchestrator, and controls and provides incentives to the network participants
Example:InnoCentive and XPrize
SEQUENZED ECOSYSTEM
The business model is the Coordinator of boundary-spanning, sequential activities performed by the participants
Example: Li & Fung
FACILITATED ECOSYSTEM
The business model is the Facilitator and gently shapes the interactions through governance and protocols
Example:American Express Open Forum
SELF-ORGANIZED ECOSYSTEM
The business model is a Participator in a broader ecosystem and is able to capture value
Example:Red Hat and Linux Ecosystem
BUSINESS MODEL
What are the main business ecosystems your company is
involved in?
Please Vote!
The story of Li & Fung – a successful platform business with an “assets-light” business model
What Are Successful Ecosystems
o Founded in 1906 as a Canton-based China Trader
o Revenues of $19 billion (2015) and operations in
40 markets with ~22,000 people
o 40% of the clothing you see in an average shopping
mail was sourced from Li & Fung
o Platform business (“Market Making”) that connects
participants with the capabilities of others
• Network of ~15,000 manufacturers specialized in
different clothing components/processes
• Li & Fung customizes the orchestration of suppliers to
produce the products
The story of Li & Fung – from China Trader to Full Services Sourcing Services
What Are Successful Ecosystems
1906 1949 1979 1995 Today
Canton-based China Trader
One of the first companies financed solely by Chinese capital for direct
export from China
Hong Kong Based Exporter
Moved to Hong Kong and began exporting
garments, toys, electronics and plastic flowers on top of its original product lines
Emergence as a Regional Player
Establishment of a regional network of
offices as the foundation
Full Services Sourcing and Supply Chain
Company
Expanded customer-base into Europe and US while growing its supply chain services
The story of Li & Fung – Coordinated value chain across the world
What Are Successful Ecosystems
• Customer-centricand market demand driven
• Focus on strategic capabilities and outsourcing non-core activities
• Close, risk and profit-sharing relationship with business partners (“30/70”)
• Design, implement, evaluate and improve the value flows
• IT to improve efficiency of the Supply Chain operations
• Shorten production lead time and delivery cycles
• Lower costs in sourcing warehousing and transportation
Successful ecosystem players are built on “exponential organization” principles
How to Become A Successful Ecosystem Player
Company Age (years) 2011 Valuation*
2016 Valuation*
Increase
Haier 32 $19 billion $39 billion 2x
Apple 30 $335 billion $600 billion 2x
Google 18 $150 billion $540 billion 3.6x
Airbnb 8 $2 billion $25.5 billion 13x
Uber 7 $2 billion $62 billion 31x
Quirky 7 $50 million $2 billion 40x
Waze 6 $25 million$1 billion(in 2013)
50x
Snapchat 5 0 $16 billion xxx
Source and copyright: Singularity University; Note (*) Fortune Unicorn List, 2016
There are 10 main “exponential organization” principles
How to Become A Successful Ecosystem Player
M T PInterface
Dashboards
Experimentation
Autonomy
Social
Staff on Demand
Community & Crowd
Algorithms
Leveraged Assets
Engagement
Source and copyright: Singularity University
o On-demand vs. full-time contractors
o “The Crowd” as community members
o Descriptive to predictive shift
o Own vs. rented assets
o Systems of engagement
Emerging Business Models – The Business of Tomorrow
Where to start? Design-driven business models
INFRASTRUCTURE MANAGEMENT
• Proprietary capabilities that lower total value chain cost in a differentiated way
• Manage high volume, routine processing activities
• Emphasize economies of scale and efficiency
PRODUCT/BRANDLEADERSHIP
• Brand or proprietary technology that allows the company to charge a premium
• Initiate change to which competitors must react
• Focus on innovation and being first to market
CUSTOMERSOLUTIONS
• Intimate focus on delivering best total solutions to customers
• Offer new combinations of boundary-spanning products, services and information
• Focus on economies of scope
MARKETMAKING
• Act as a main facilitator between consumers and producers
• Integrate vertical products and services
• Focus on economies of mass and reach
What is your company’s dominant
business model?
Please Vote!
Emerging Business Models – Strategic Capabilities
Where to start? Design-driven business models
INFRASTRUCTURE MANAGEMENT
PRODUCT/BRANDLEADERSHIP
CUSTOMERSOLUTIONS
MARKETMAKING
Product Development
ConsumerEngagement
ServicesOperations ChannelsSupplyChain
ManagementSystem
Sales & Operations
PlanningCustomerAccountMgmt.
StrategicPlanning
Pricing
Manufactu-ring
QualityAssurance
PartnerMgmt.
BrandMgmt.
NewProduct
Dev.Market &CustomerInsights
SalesPerformance
Mgmt.Research &
Development
ProductTesting
RegulatoryCompliance
CustomerAccountMgmt.
BrandMgmt.
Market &CustomerInsights
QualityAssurance
Pricing
MarketingMgmt.
TalentDevelop.& Mgmt.
Pricing
PartnerMgmt.
CustomerEngage-
mentSales
PerformanceMgmt.
BrandMgmt.
Prospect &Opportunity
Mgmt.Analytics &Reporting
The use of outsourcing will likely continue to accelerate but will change in nature from pure cost-cutting to a driver of business model innovation
Implications for Outsourcing
Powerful Intersection of Outsourcing and Innovation- Disruption in the Service Delivery Model- “Internet of Things”- Robotic Process Automation (RPA)
Service Providers emerge as Innovation Centers- Leveraged Assets (e.g., cloud)- Community & Crowd (e.g., enable and capture innovation)- Staff on Demand
1
2
3
Align Outsourcing strategy to business model- cost vs. innovation vs. customer services
THANK YOU
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Deloitte MCS Limited is a subsidiary of Deloitte LLP, the United Kingdom member firm of DTTL.
This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte MCS Limited would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte MCS Limited accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.
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