The importance of digital platforms for business

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The term platform is one of the most used terms in the business world, but what is a business what is a business platform, what are its benefits and what types are there?

A digital platform is a business model that works as an added value for companies, since it facilitates the exchange of information between two or more independent groups, which in most cases are consumers and producers.

To achieve effective information flow, these platforms must be massively digitally connected in two directions:

This online solution allows companies, regardless of their size, to organize their production processes in a single place and run different applications and programs in an automated manner, thanks to machine learning algorithms.

Likewise, this interconnection makes it possible to observe, document, analyze and evaluate in real time each of the business activities, which undoubtedly helps to make monetary, material and human resources more efficient .

Advantages of digital platforms

In the book Machine, Platform, Crowd: Harnessing Our Digital Future, Andrew McAfee and Erik Brynjolfsson, research scientists at the Massachusetts Institute of Technology (MIT), note that a well-implemented digital platform can make a company:

  • Transform and improve your offer
  • Increase your network of contacts through networking
  • Optimize your daily processes and tasks
  • Improve the experience of your internal and external users
  • Reach new sales channels
  • Reduce your operating costs
  • Leverage artificial intelligence technologies

Through these advantages, each user of the platform can extract his or her own benefits, since this digital environment offers a very wide range of access, reproduction and distribution.

In addition, McAfee and Brynjolfsonn point out that digital platforms are adaptive, so several can add up to create combinatorial innovation.

In this way, companies acquire the capacity to provide more elements of action or decision making to end users, who under these favorable circumstances are more willing to invest in a product or service.

Profits from digital platforms

The benefits of having a business platform far outweigh the initial investment to acquire it. The important thing is that your company is clear about the objectives it is looking for and chooses the platform that best suits them.

According to the
Digital Economy Report 2019
from the UN, companies using a business platform can make inroads into the data economy: operating both as intermediaries and infrastructure.

Thus, they are in a position to collect, extract and process all data related to the actions of platform users and their online interactions.

This aspect is a lever for growth because digital data is highly valued today, as there are several ways to monetize it.

In addition to direct sales and the data economy, digital platforms provide the following ways to create revenue:

  • Announcements
  • Free trials linked to a subsequent subscription
  • Customer service
  • Complementary assets
  • Product comparison

It is worth mentioning that companies have to be very careful with the interface of their platform, since the more attractive and easy to use it is, the longer it is used and the greater the loyalty of users will increase.

Types of digital platforms

Digital platforms transform as they are used, so while no two are alike, it is possible to group them into three main groups:

  1. Business platforms

They combine data, company workflows and expertise to drive your competitive advantage. They are able to connect with other platforms within the same company ecosystem.

They can be used to manage risk in a bank, process claims in an insurance company, or track a company’s supply chain, to name a few examples.

2. Technological platforms

They enable the software and digital infrastructure to support enterprise workflows by supporting enterprise platforms.

That is, these are the next-generation enterprise applications such as SAP, Salesforce or Workday, as well as those whose infrastructure is hosted in the cloud such as IBM Cloud or Red Hat.

3. Mass consumption platforms

Amazon, eBay or Alibaba are the most prominent examples of this type of platforms. They are those that have positioned themselves in the collective unconscious because they are mainly focused on the final sale to the customer.

In addition, the data and information they provide can be used by business platforms to add value to their proposition.

In short, the digital platform of your business has to be the meeting point for your suppliers, collaborators and customers. All of them should have easy access to valuable tools and content that will help them both meet their needs and achieve their goals.

Does your company have a business platform? What are the biggest challenges and benefits of having a digital platform? What are the areas of opportunity in your company’s digitalization process?

If you want to know how to take full advantage of your digital platform, comment in the space below and subscribe to my blog to learn more about cognitive computing for business, as well as other topics of innovation and scientific technology applied to business.

Originally published in Jorge Pérez Colin Blog

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