How CIOs Can Prepare for the Platform Economy

The new digital economy is about leveraging business data to the ultimate extreme. InformationWeek writer Joe Stanganelli reports on the MIT Sloan Symposium in Cambridge, Massachusetts. This is where top IT leaders explore the possibilities and pitfalls of what is being called the “platform economy”:

…some of the most successful business models today are platform-centric. For example: Uber owns no cars, Airbnb rents out no real estate of its own, and Facebook creates no significant content itself. In all three of those examples, platform users represent the origin point of the product or service.

Platform presentation moderator Marshall Van Alstyne said, “Products have features; platforms have communities.” Today, with computing power being thousands of times cheaper, implementing a new platform is incredibly accessible, and an easy win for the forward-looking business with an innovative culture.

Proof of Platform

Need proof? Panelist Jerry Wolfe cites McCormick’s FlavorPrint, an app that functions much like Pandora, only instead of customized music feeds, you get customized recipes based on user contributions. It’s 100% platform-centric, no content required on behalf of the provider.

The Way to a Platform-Centric World

FlavorPrint is also a great example of how CIOs can bring the platform economy to their enterprise, extending existing products and services to new markets:

  1. To become more platform-centric, your organization needs to switch on customer relationship management (CRM) 24/7, as customers will want things from your platform 24/7 too.
  2. Crowd-sourcing embodies the primary value of running platforms, so don’t hesitate to democratize your business model. Users will create value for other users. From a conceptual standpoint, it’s that simple.
  3. Although any platform can be monetized (and it’s devilishly tempting to do so), the platform panelists caution against this approach, citing that the less obvious (but more valuable) function of a platform is to collect data about users for marketing purposes.

Panelist Jerry Wolf calls for the business to take IT seriously as a center of innovation, putting CIOs and their accompanying skills at the front line. Is your enterprise ready for the platform economy? It’s ready for you.

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