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Monday, April 08, 2019

Become a Platform Company

Even CPG companies are figuring this out now.

The platform play: How to operate like a tech company  in McKinsey  By Oliver Bossert and Driek Desmet

For tech to be a real driver of innovation and growth, IT needs to reorganize itself around flexible and independent platforms.

“The question is not how fast tech companies will become car companies, but how fast we will become a tech company.” This is how the board member of a global car company recently articulated the central issue facing most incumbents today: how to operate and innovate like a tech company.

The tech giants of today have been some of the most innovative companies in the past generation. A handful of industry leaders, such as Ping An and BMW, are fast joining their ranks by reinventing their core business around data and digital. What distinguishes these tech companies is that their technology allows them to move faster, more flexibly, and at greater scale than their competitors. IT is not a cumbersome estate “that gets in the way,” but an enabler and driver of continuous innovation and adaptation.

The reason this is a competitive advantage for tech companies is because their IT is organized around a set of modular “platforms,” run by accountable platform (or product) teams. Each platform consists of a logical cluster of activities and associated technology that delivers on a specific business goal and can therefore be run as a business, or “as a service,” as technologists say. These platforms are each managed individually, can be swapped in and out, and, when “assembled,” form the backbone of a company’s technology capability. Just as important is that the business and tech sides of the company work closely together and have the decision-making authority to move quickly.

This modular, platform-based IT setup of tech companies is what enables them to accelerate and innovate. They can experiment, fail, learn, and scale quickly: they can get products to market 100 times faster than their more lumbering peers (think weeks instead of months). With this kind of speed and flexibility, IT can and should become a focus for innovation and growth at the executive committee and board level. With new technologies and ways of working coming online, tech should be a competitive advantage, not a burden as it is in far too many companies today (see sidebar, “Why now?”). ..... "

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