What is a digital platform?

Digital technologies present opportunities for enterprise leaders to rethink their business to create better experiences for customers, employees, and ecosystem partners, and to lower costs. When companies act to take advantage of these opportunities through digital transformation, they undertake two primary activities: building a digital platform and building a new operating model.

Both these activities must happen concurrently, and that presents a pitfall: A company is limited in how far it can go in changing its operating model unless the digital platform succeeds. Approaching this pitfall incorrectly causes many digital transformation initiatives to fail.

Success with a digital platform doesn’t depend on the technologies comprising the platform or the implementation. Success depends on users adopting the platform.

Many companies take a technology-first approach when building/assembling their digital platform, acquiring technology they hope will accomplish their objectives of better experiences for customers, employees, and partners. This is a destined-for-failure approach. The truth is, digital technologies in and of themselves create no value. Their power is in enabling a change in how a company operates; that new operating model creates the value.

Multiple components comprise a digital platform (typically a data-ingestion engine, a machine-learning transactional engine to perform tasks or rules-based activities, an analytical engine and increasingly, an AI engine, APIs, or tools that allow digital platforms to talk to other software, and tools monitoring regulatory compliance). These components must be aligned and integrated to create better experiences for users.

Digital platforms enable a data-driven world rather than a process-driven world. The digital platform handles an end-to-end business process necessary to achieve the improved experience for customers, employees, and partners.

Digital platforms cut across traditional organizational structures, silos, policies, and technology investments to enable the new operating model. They force a different organization, a different talent model, a different mindset, and a different set of policies and processes.

Rethinking and re-engineering these components of an operating model necessitates deep, organization-wide change.