Business Value of Solution Platforms

By shifting from building solutions to building solution platforms, companies will increase revenue, reduce infrastructure costs and improve customer satisfaction.

First, solution platforms increase revenue by making services and products easier to purchase, shorten sales cycles and provide up-sell opportunities. For example, many analysts predict music software and online retailers such as Apple’s iTunes will replace music retailers. Companies such as Apple and Yahoo created platforms where customers can research (play sample music), collaborate (music ratings), self-assemble (purchase one song at a time) and consume (download to multiple formats). All of these features shorten the sales cycle because it is easier for consumers to access and evaluate music.

Second, solution platforms reduce infrastructure costs by moving purchasing to online resources and allow vendors to easily measure and discontinue products that do not generate revenue. Businesses in every sector and market report that online sales increase year over year. For most organizations, web or e-commerce sales are much less expensive than retailer or direct sales. Now, these same companies are using new technologies such as web 2.0 and Ajax to help increase revenue. In addition to moving to the web, companies who use solution platforms get direct and instant feedback on what services and products are important to their customers. This allows companies to make faster and better decisions on what products will help build the bottom line.

Third, customers who purchase products or services through solution platforms are more satisfied. Solution platforms provide an environment where consumers can use or demo products such as the iTunes example, research and compare competing products on eBay, and collaborate with other consumers through Instant Messaging (IM) or product and vendor ratings. This additional information reassures consumers that they made the right purchase decision based on their needs which increases their satisfaction.

Conclusion

Companies that understand and embrace solution platforms will be better positioned for future success and even survival because solution platforms are based on user’s needs and wants. Current users have extremely high expectations and their expectations continue to grow. Companies who embrace solution platforms will recognize the real and tangible benefits such as increased revenue, reduced infrastructure and improved customer service.

Part Two

Examples of Solution Platforms

Wireless cellular plans provide an easy to understand example of solution platforms. Since cellular telephones were introduced, carriers offered limited, prepackaged plans. These plans were solutions, rather than products, and were designed to answer customer needs. A plan consisted of talking minutes, roaming charges and other features. Every customer had their choice of plans that suited their needs. Today, many wireless carriers offer customized plans where the customer selects the services and features they want and need. This type of offering comes from the concept of customer built or self-assembled solutions. The carriers who embrace this type of buying behavior have a clear advantage now and in the future.

eBay and Salesforce.com also provide customers with an easy way to self-assemble solutions that best fit their requirements. These innovative companies created solution platforms that allow customers to construct business processes based on a standard set of reusable services. eBay’s solution platform provides individuals and vendors with the tools necessary to list, price and sell their products and services. Salesforce.com’s platform offers clients a laundry list of services that help companies’ mange customers from lead creation to ongoing account management.

The Need for Solution Platforms

In the current IT environment, users, customers and employees are not bound to the office or a dial up connection. They want to access information from everywhere and demand to work from anywhere. This means applications and services must be available in as many locations as possible. If you doubt this, look at the exploding interest in Web 2.0, Office 2.0, Enterprise 2.0 and Enterprise Web 2.0. All of these concepts provide users with a solutions platform that enables them to develop customized solutions that can be accessed from any location. Solution platforms are about usability and availability. The latest hype revolves around the category of content including video and audio. However the manner in which end-users access and use content is more important than the actual content. For instance, take a look at Google’s latest acquisition. Google recently purchased YouTube for over $1 billion. Is a company that provides on-line video worth that much money? The answer is no. Google’s interest in this video company lies in YouTube’s self-assembly platform and video on-demand system. The important part of this acquisition is not about what content this company provides, it is about the way people access and use this content. In other words, it is a solutions platform that allows end-users to gather data, collaborate with other users and purchase or distribute content in an easy to use method.

Next in Part Three – Business Value of Solution Platforms