Chronologically, when the company has screened their external environment, studied their customers and revised the strategy, the findings indicate that it should start to re-think its resources, capabilities, overall operations and how they are being organized. An emergent theme that was identified from the data is the way how companies orchestrate their assets and formulate the operations. The findings indicate several resources and capabilities that are vital in the process, the ability to reconfigure new and existing resources and capabilities, and the organizational formation of the focal people and groups. Additionally, from company’s internal assets, people’s personal characteristics and management’s role need to be focused on. Next, I will present these areas of findings more precisely.
Internal resources and capabilities
The main internal resources vital in the process are mainly concentrated on people and their skills, capabilities. The significant resources in the process are intangible, although the foundation for developing for such a digital platform are tangible such as a physical product or people physically performing a service on a certain location. The know-how to perform actions, that take the company closer to platform business is in the central role. The capabilities to reform the existing resources and capabilities are vital for a company, but it also requires financial resources. When asked about resources and capabilities integral to the process, the interviewees describe them as follows:
“You might have a whole set of middle management, who are really good at running projects through waterfall methodology but actually, you still need waterfall methodology for some of your projects like SAP, but then in other areas you need to go completely to an agile methodology, and you might need new people, new competencies there.”
“Knowledge, know-how and these kinds of things.”
“Pure technological know-how.”
“Commercial know-how, how to commercialize this kind of service and how to tell the story to the customer.”
“The entrepreneurial spirit internally, there were then kind of a capabilities to get started with the platform.”
“Internal sales and internal marketing in many ways, so that how we have got different stakeholders to join this.”
“And you also need competencies to build new types of capabilities in your organization and that costs money as well. So, for example, cyber-security is very critical for any digital platform, umm, and I am sure that other interviews stated that it is now easy or cheap to hire really good cyber-security people. So what type of cyber-security team you need, what type of data scientist team you need, you got all that data flowing in your digital platform, then you need really great data scientists to help you make the most of it.”
As a bigger concept of a capability is the building of a big picture in an organization. The capability to connect the strategy and business side with practical issues dealing with digital platform is seen vital based. Digital platform is a new area of business for both of the companies and neither of them have experienced such a change of processes in building of a platform before. This is important on a managerial level but also within the executing team. The capability to view the matter from a holistic perspective is vital for the platform birth as all of matters are tightly connected. Few interviewees point this out by saying:
“The business side understanding and the system people's expertise, that how we can realize the customer wish.”
“So, you need people who can see the big picture. Basically, you need people to understand the customer organization and why we need to change. So why, what way this is going to fundamentally impact our business if we don’t do something. And why do we need to change and sometimes it is not so comfortable.”
Software as a resource
A resource, that is pointed out that has had an effect on the birth of the platform is software.
The choices made in the past are influencing partly software-wise what decisions are made in the platform side. The software choices made can either influence the process positively or
negatively. From this point of view, the path that company has taken previously might have an integral role in building of a platform. Interviewees from both of the case companies state that:
“What has also influenced our development, on my opinion, is the existing systems.”
“This is relevant, because this is why we decided to use IBM cloud.”
Reconfiguring resources and capabilities
The integration of digital platform business has also required modifications in the existing and new resources and capabilities. When integrating digital platform business, the companies have had to re-think their capabilities to perform actions, thus change the processes. It has challenged the company to reform a lot of functions and the way of working, both in the development phase and after development. As a main characteristic of developing capabilities is the re-organization of the development process. The development process does not follow previous ones and these traditional companies have applied methods more familiarly known from start-up world such as agility and experimenting. In both of the cases it is stated that waterfall is not suitable development method for digital platform. The interviewees describe the development process:
“The development model, agile development, what we have applied, in a certain way has enabled that the service can be expanded and scaled also to the business side”
“Previous system development projects had been done with a waterfall method.”
“And if we go back ten years, our organization was almost ten times project based. So, work on something, deliver something, finishes a high-quality piece of engineering, and then that team would move onto next thing. Well you can’t do that with a software, a digital service. You need continuity with the team, and you cannot just stop at some point and say that hey we are finished.“
”In the traditional product development projects you go in the basement for three years and develop a new product from start to finish and then commercialize it and document it and prepare marketing materials.”
“So they are having to report, budget and report, in a certain way, traditional IT budget the waterfall methodology, but in fact they need given by a manager with a, a senior level enough of a manager, with the right authority to say hey we are going to define money and resources to your project in a different way.”
One of the concrete process that has been reconfigured completely is sales, in one of the cases.
The change of how the sales organization performs their main task requires learning new and a great amount of training. The case company has had to use its capability to change how it sells and implement it throughout the global organization. This is required to ensure the value delivery and capture process. An interviewee, who has taken a lead to launch the program explains the change:
”This is nothing like we brought a new product, instead we change the way our sales work. … Have to learn away from selling features and sell solutions. We sell solutions to people’s problems.”
”When our sales for example sell these new kind of solutions, it is very different kind of selling than it has been before.”
Organizational re-formation
Organizational re-formation is one of the capabilities that stands out in all of the interviews.
The involvement of various stakeholders, mixing of departments and the physical distance of the team are seen vital in the integration of digital platform business. The involvement of multiple stakeholders concern business units and other groups relevant to the platform. The development and integration cannot exist in isolation from the business, for example as a technology project. In both of the cases, building of a platform is seen as an organization wide continuous process. It affects some parts of the business and people more, but it certainly has some type of an effect in everyone.
“When it became and still kept its local umm entrepreneurial spirit in our different front-line organizations, but we had to become much more of a globally harmonized company and much more efficient. Yeah. That allowed us and have combined global functions like R&D and IT,
digital management, common back-office functions. That really helped with building of digital platform.”
“This unites responsibilities and functions of different business units. So this requires collaboration over the business boundaries. You cannot work in silos.”
”Sales organizations need to think in their respective country then how this effects on the sales and operations.”
”On an organizational level, this affects basically everything.”
”The boundary between new product business and maintenance business has basically has disappeared or almost disappeared.”
Building of an internal start-up
The findings suggest that start-up world influenced operations suit the building of a digital platform also in traditional bigger organizations. Additional to decreasing the social distance between the people of different teams, reducing of physical distance is considered to be beneficial for the development. Interviewees from both of the cases describe this:
”We established so to say an internal start-up like. And we learned to use lean start-up processes.”
"Our team, who was developing the service, got its own working space, where we could be. It was before I joined, this kind of space had been organized so that everyone could be in the same space.”
Individual people and their characteristics
Personal characteristics and individual people’s role in the organization are both seen as valuable for the integration of digital platform business. It has emerged in various ways such as identifying the opportunities, creating solutions and maintaining the perseverance in the development process. The findings suggest that the people’s role in the organization matter when they have identified the opportunities that technology proposes and are in a position of
making decision. If the position does not offer enough mandate, internal sales skills are extremely important to communicate the opportunities that company is able to seize with proper operations. On the other hand, the management of the company is seen to have an important role in the building of a platform, so the findings suggest that the balance between right people in right places is vital for the platform to be created. This view is built based on the following interviewees’ explanations:
”As a start there was a really small group of people, with whom we started to sell it.”
”The talent to do internal sales inside the organization, especially because this is a big firm.”
“It is about a few people, who saw this as an opportunity and need, and then we got it to the organization and it led to ownership.”
”The right people in the suitable position are in the central role of this after all, and that there is the vision and an opportunity to realize it.”
The key people in the process can be characterized by the level they possess resilience, faith, sales skills and courage. The sales skills have been valuable when pushing the idea forward inside of own organization. On the other hand, resilience is seen to be needed in selling the idea internally when the initial decision to take the digital platform to the market has not been yet made. Additionally, the personal interest and courage to start testing things are important. These findings focusing on personal characteristics are related overall more to the phase of noticing the opportunity and finding ways to seize the opportunity when the platform has not fully gained a foothold in the organization. An interviewee from one of the case companies describe the process:
”Clearly there are certain people, who have pushed it forward for years through a grey stone.”
“It has been happening through an innovation process and done by individual people’s passion.”
“We had to, like I said, sometimes do so that we closed our eyes for a while and then waited, if someone will yelp.”
”It has needed the initial push and it has require strong will, that we will start doing this.”
Company’s management
Management’s role is brought into attention when interviewees are asked about what was organization’s and management’s reaction to the opportunity of digital platform business. The findings suggest that management’s attitude towards change and emerging opportunities is important when building a digital platform. On the other hand, it is not the management as a whole who will necessarily spot the opportunities, but few key people there. As suggest earlier in findings, the decision of building a platform is not the start of the platform. It starts both from strategy and opportunities that shape strategy. A management skilled enough to make the strategic decision in the first place is vital but also the management support in latter phases is important. The interviewees from both of the case companies describe management’s role:
“It is seen (by management) that we need to constantly change, or we will fall behind.”
”There are few management people, who understood what this is about and said that it is a good idea, let’s do it.”
”I feel like our top management of course helped, they had clearly understood the need even spontaneously in a way. That they supported us and need to get this fast.”
Management has also a significant role in encouraging people to suggest and perform innovations overall. In one of the case companies, the company culture is innovation driven and innovation is welcome. This view is built based on the interviewee’s explanation:
“It is wanted that people will introduce ideas and innovation. … Everyone can innovate and be rewarded for it.”
These findings provide answers to RQ1: What resources and capabilities are needed to integrate digital platform business into firm’s existing operations? and RQ2: How do dynamic capabilities support the integration of digital platform business? Derived from the empirical data, the resources that are most vital revolve around people, their know-how and knowledge, supporting management, as well as technology and software. The know-how and knowledge of people is seen important, but also the existence of people, who have the desired personal
characteristics is valuable. People, who are strong and innovative are vital for the company and they must exist on all levels. Additionally, company’s management should involve people, who are able to sense opportunities, push them forward and execute accordingly. It is worthwhile to note, that in the other case the physical product is also a resource that enables the platform integration. The connectedness of the product serves is an antecedent. From the capability perspective, the most important capabilities are emerged from the ability to change and modify existing processes, methods and resources. The change has occurred mainly in development, marketing, commercialization and sales, and overall in business how to company creates value with the digital platform business model. The dynamic capabilities that can be identified from the empirical findings are the processes to modify the previous product development, commercialization and sales methods, and building of new units from existing and new assets, which both help the company to exploit new opportunities. These dynamic capabilities do not only support the integration but are vital for it. The previous product development methods would not have been suitable for digital platform development, the previous way of selling does not apply to digital platform and the customer involvement in the process changes the entire commercialization process. Dynamic capabilities create an opportunity for the digital platform to succeed by building an environment where it is possible. A new business model changes the operations in the company and dynamic capabilities enable the company to perform at its highest level.