Developing digital Ecosystems that drive industry alignment and new business opportunities
The role of an ecosystem’s Governance Model and how to successfully implement it
Does your business model rely on a highly fragmented value chain involving many organizations and systems? Stay tuned to learn more about building digital ecosystems and what role governance structure play in that context.
Many industries have been forced into a new era of business model and value chain design. In an environment characterized by fierce competition on digital and physical platforms alike, organizations have built complex value chains that rely on third-party organizations and systems dispersed around the globe. We summarize key insights and present a simple framework including all dimensions driving success for digital ecosystems.
The need of a new way in designing and steering value chains
Businesses in all industries have and always will be confronted by the question of how deep their value chain coverage should be and how they may handle parts of the chain handed over to partners. Digitalization and globalization have been stark influences leading to the disentanglement of value chains and the growth of strong partnerships with suppliers, marketplaces, wholesalers and in some cases even competitors. Yet, such strong partnerships are often bilateral, individual and costly to develop. The COVID-19 outbreak in early 2020 has shown that even sophisticated value chains are vulnerable and may suffer from disruption. In order to increase flexibility and resilience, differing strategies have emerged over the past couple of years. Technology-based, industry and even cross-industry platforms help define standards, align processes, and distribute operations and risks among a set of like-minded players. Yet, the questions remains, how to achieve an effective collaboration with trusted interactions on a shared digital ecosystem?
Deloitte Blockchain Institute
The lack of trust in environments of fierce competition
“You simply cannot have a healthy marriage without trust”. What is true for a personal relationship also applies to a business partnership. Companies traditionally work well together in clear hierarchical structures, e.g. through a buyer/supplier relationship. Once partnerships become interdependent, the relationship converges towards a partnership on equal terms.
The more stakeholders get involved in digital ecosystems, the harder it gets to establish trust among all participating parties and to agree to the same terms of collaboration. Such networks would not only overwhelm us in our personal lives, but pose imperative issues within business relationships along value chains as well. Questions of e.g. intellectual property, influence and control occur and can cause cooperation to get stalled or even to be “broken up”.
Therefore, companies face a dilemma. They need to work together with suppliers, partners and even competitors to adjust to the fast changing business environments. Companies are increasingly reliant on ecosystems to enable economies of scale and to protect themselves against competing companies that strive for a “winner-takes-it-all” mentality. Nonetheless, they often have very limited strategic approaches to steering and interacting in digital ecosystems.
Blockchain bridges uncertainty to foster trusted collaboration
Blockchain technology acts as a tool to distribute trust within a network of participants sharing the same values and business goals. Throughout the past years, dozens of strategic alliances have formed to create equal playing fields on a level that does not limit competitiveness or customer retention.
A Blockchain-based consortium enables stakeholders to collaborate under a trustful environment. It is necessary to build a robust governance model that allows all participants to co-exist and act on the same principals. Power and trust has to be distributed or shared among the ecosystem’s stakeholders rather than concentrated in a single individual or entity. Therefore, consortia are a tool to enable coopetition.
Our article provides insights into:
- The trend of strategic alliances in digital ecosystems;
- Critical success factors of digital ecosystems based on decentralized platforms;
- Blockchain-based consortium benefits for stakeholders;
- Principles of establishing a strategic alliance (consortium) between stakeholders.
Deloitte supports major Consortia focused on developing and establishing digital ecosystems, especially based on decentral platforms enabled by Blockchain technology. We leverage our expertise in constructing governance models and legal frameworks to provide the participating stakeholders the right nurturing ground for a successful long-term ecosystem approach.