How Legacy Companies Can Pivot to a Platform Model: The Power of AI and Ecosystems

How Legacy Companies Can Pivot to a Platform Model: The Power of AI and Ecosystems

In today's digital landscape, the most successful companies are those that have embraced the platform business model. These companies act as hubs in their respective ecosystems, coordinating services and reducing friction for customers. What sets these platform firms apart is their ability to generate and make sense of large volumes of data, thanks to the application of artificial intelligence (AI). It's no surprise then that these leading platform companies are also world leaders in AI.

Interestingly, traditional companies that aggressively employ AI are also adopting an ecosystem approach, and some are even transitioning into platform models. Studies have shown that companies with diverse ecosystems are more likely to use AI in a way that differentiates them from competitors. These organizations also tend to have a transformative vision for AI, enterprise-wide AI strategies, and use AI as a strategic differentiator. This highlights the importance of embracing ecosystems and platforms in the age of AI.

A few "legacy" companies have already successfully implemented AI-enabled platform models. By leveraging these models, these companies are not only attracting more customers but also gathering more data. This data, in turn, leads to the development of better models and better customer offerings, creating a virtuous circle of growth and innovation.

One such example is CCC, a company that aggregates data and utilizes AI to process claims efficiently for its platform. With over 30,000 participating companies, 500,000 individual users, and $100 billion in commercial transactions, CCC operates entirely in the cloud. This interconnected ecosystem allows for seamless transactions and the continuous improvement of models and offerings.

So, how can legacy companies pivot to a platform model and harness the power of AI and ecosystems? Here are three actionable pieces of advice:

1. Strategize and seek out ecosystem relationships: Consider how partnerships with other companies can improve your offerings. Look for opportunities to collaborate and ensure that data is an integral part of these relationships. By tapping into a diverse ecosystem, you can leverage the collective power of data and insights.

2. Develop an API-based IT services architecture: To seamlessly integrate with your ecosystem partners, it's crucial to have a flexible and scalable IT infrastructure. An API-based architecture allows for easy integration and data exchange, enabling smooth communication and collaboration within the ecosystem.

3. Identify key decisions for AI and gather relevant data: Understand the specific decisions that AI needs to make in your business. Identify the data sources that are necessary to train AI models effectively. By collecting and leveraging data from across the ecosystem, you can improve the accuracy and effectiveness of your AI-driven solutions.

In conclusion, legacy companies can pivot to a platform model by embracing AI and ecosystems. By following the success of digital natives, these companies can unlock the power of data, leverage AI technologies, and create a thriving platform business. The Zwicky box method, a powerful problem-solving technique developed by Fritz Zwicky, can also enhance creativity and innovation. By breaking down problems into categories, adding values to each category, and linking them together, unique solutions can be generated. By combining the power of AI and the Zwicky box method, legacy companies can transform themselves into agile, data-driven, platform-based organizations that thrive in the digital age.