Business ecosystem modeling and even the ability to create a new business ecosystem has become a critical success factor for any organization or company planning to grow and thrive in today’s digital economy.
What is a business ecosystem?
According to Gartner, Inc., a research and advisory firm, a business ecosystem is defined as follows;
A business ecosystem is a dynamic network of entities (people, organizations and things), interacting with each other to create and exchange value for all participants.
To understand more about business ecosystems, read our article Ecosystems – Are Ponds that Different to Businesses? and check out Gartner’s 8 Dimensions of Business Ecosystems.
In most cases business ecosystems must extend to include entities outside of the internal or “home” organization. These entities may include suppliers, industry associations, standard bodies, customers and other competing or complementary organizations as well as data, devices and supporting infrastructure.
Six drivers for the creation of business ecosystems
There are many reasons why defining and understanding your relevant business ecosystems is a critical task, here are six business drivers elevating the need for carefully defined and modeled ecosystems.
- The speed of digital business requires organizations to work together to avoid becoming obsolete
- Ecosystems facilitate collaboration and co-opetition between participants, a necessary evil!
- Businesses will be able to harness innovation far more efficiently and effectively by grouping smart resources, innovators and problem solvers from different organizations to work together to deliver value
- Risks and benefits are shared across the entire ecosystem instead of isolated to a single organization or technology
- Business ecosystems enable effective and efficient use of sometimes limited or emerging technology resources
- A well-formed business ecosystem can enable small companies to compete against larger established companies, leaving no one untouched or invincible!
However, it’s not enough anymore just to understand the importance of your business ecosystems and what they contain, successful organizations must be able to effectively model and easily share details about their business ecosystem.
What is business ecosystem modeling?
Business Ecosystem Modeling is the discipline of defining and visually representing the essential elements of your business ecosystem.
While many business ecosystems will exist to optimize what we do today, a growing number will be built to introduce new experiences, products and services.
Since business ecosystems have become, or quickly will become, the underlying foundation for any of your new business models you can expect to be asked to share details about them with your internal and external stakeholders — your executives, shareholders, investors, key clients and major suppliers will all want confirmation that you understand the nuances of the business ecosystem in which you operate and how your business model will generate sustained value for all participants.
Therefore, business ecosystem modeling is on the rise and is noted in the Hype Cycle for Business Ecosystems, 2018 published by Gartner Inc, on August 6, 2018 as an element expected to have a high impact on business results and achieve mainstream adoption in the next 2-5 years.
What is the best approach to business ecosystem modeling?
One thing we know for sure, is that business ecosystem modeling requires collaboration among all stakeholders and it’s a highly collaborative exercise. Tr3Dent has been involved in dozens of projects across a wide variety of industries to help create new business models and define their supporting digital business ecosystems and have written up our recommended approach, complete with best practices and guidelines.
Tr3Dent is also listed by Gartner in several related Hype Cycle reports as one of only a few vendors offering a software platform to enable efficient collaborative business ecosystem modeling.
Here is an example output from our platform called Transformation Accelerator. The business ecosystem model below demonstrates the Airbnb ecosystem.
The bottom line is that to succeed you need to be able to adopt new business models that rely on expansive digital business ecosystems and to do that quickly and effectively, you must acquire the skills and capabilities needed for collaborative business ecosystem modeling.
Not sure where to get started? Read An Approach to Digital Ecosystem Modeling or sign-up for a free 30 day trial of Transformation Accelerator, Tr3Dent’s collaborative platform which leverages visualization technology to plan, build and manage complex business ecosystems.