Digital business ecosystems are shaping our post-pandemic future

Let's find out why


Before the pandemic, there were the dreamer-doers who envisioned a more integrated world connected by digital platforms. They were the start-ups and disruptors that shook up how we did things. However, at that point, progress was, whilst often fabulous, patchy. It was a start-stop process of trying to change structural models with intermittent success. The pandemic forced our hand where digital business ecosystems were concerned, and what we are seeing now is faster, consistent, and all-pervasive progress.

What is a digital business ecosystem?

First, think of a “business ecosystem” as an interconnected system, where companies, people, capabilities, and devices are combined and connected to create something (e.g. engagements or capabilities) that is much greater than the ecosystem’s individual parts. Being part of a business ecosystem means that most of the participants will create value. It also occurs (hopefully rarely) that some won’t.

Like biological ecosystems and social systems, finding the right balance among all actors will ensure the effective and symbiotic collaboration of all shareholders. A well-formed business ecosystem helps create a new value proposition. They also are a springboard for reaching more customers. Such business ecosystems enable one type of user to unify their offer digitally against the needs of specific customer groups and facilitate the centralization of choice making.

Such ecosystems are not new but are increasingly becoming highly tech-enabled and challenging traditional business models by combining the very best of access to yield greater returns for all.

The pandemic accelerated the trend for businesses to seek interconnected sets of services to deliver improved and integrated experiences for their customers. Companies within digital business ecosystems dominate key touchpoints across customer journeys while managing early corporate independence by carefully selecting their partners.  It is believed that companies that do not embrace business ecosystems risk falling behind.

Many of the newly created ecosystems have become hyper-scale digital platforms that serve a multitude of customer interactions. Think social media marketing, customer profiling, access to real-time services or payment platforms. Emerging technologies are combined to create a seamless and frictionless whole. These interconnections, or seemingly intuitive and automated processes, are what customers have been crying out for over the last 10-20 years but were hindered by traditional ways of doing things.

With digital business ecosystems, the business flow is integrated end-to-end. They add value for the customer through personalization, and they facilitate growth in a way legacy infrastructure cannot. They also stand to create efficiencies and bottom-line benefits for every partner involved. Their change has been made possible by the proliferation of data and advanced analytics combined with digital technology.

What does a business ecosystem leader look like in practice?

In real terms, the ​digital part of a digital ecosystem shares digital assets to ensure mutually beneficial gains, such as commercial gains from the deployment of innovations, propositions, and activities of common interest. They help a multitude of organizations to interact with those outside the company’s walls including customers, adjacent industries, startup partners, and competitors in order to improve performance. They enable industries to build new areas of unfair advantage, cross-sectors to come together to fulfil complex needs, and customers to benefit from one single, seamless and integrated personalized journey.​​

We mustn’t underestimate the scale of what is happening in this arena. Remember that 6 out of 7 of the companies with the world’s highest market capitalizations are tech companies that generate much of their revenue from the digitized business ecosystems they have created. These companies include Apple, Microsoft, Amazon, and Alphabet.  These companies have realized that it is essential to build digital business ecosystems to enter new niche markets, in particular, with exponential access to the powerful triad of digital tools, data, and advanced analytics.

What these companies are doing, and what others that want to move forward, must do too, is radically rethink the way they deliver for the customer. Using an ecosystem approach, they can serve the customer better through a fundamentally improved process using synergistic and complementary connections.  These connections ultimately deliver more excellent value.

On the ground, the core working of digital business ecosystems comes down to ecosystem strategy and strategic partnerships. These strategic partnerships hold value for different reasons, including:

  • Supplying products or services to each member of the overall ecosystem and others directly.
  • Combining capabilities able to deliver more seamless sets of value-added services.
  • Exploiting better distribution channels to reach new audiences, segments, and markets. And this is why the concept of embedded finance, embedded insurance, and embedded distribution is becoming more prevalent today.

Over half, a trillion dollars has been invested into 19,000 FinTech ventures. That’s remarkable! But what’s remarkable is how much FinTech is accelerating and evolving the deployment of new business models or platform businesses facilitated by digital business ecosystems. Look at the thousands of start-ups and growth ventures, they often are a key ingredient to connect business ecosystems together and challenge incumbents’ practices systematically.

Snapshots on 5 business ecosystem leaders

Digital ecosystems built by smart enterprises is the hot thing to do. The practice includes different forms of digitally-enabled businesses. Let’s review a few examples:

  • Bolttech provides ways for people to protect the things they value most. The digital business platform connects customers, insurers, and business partners via the world’s largest insurance exchange. 8.3 million customers, 700 distribution partners, and 150 insurers across 30 markets exchange US$ 5 billion in written premiums on the platform.
  • Danish Danske Bank combines a network of partners sharing various data across many sectors, including housing. They bring together multiple providers of information to supply homebuyers with comprehensive cost estimates incorporating things as diverse as tax and utility bills. This elevates the financial advice being provided to customers, attracting more customers, but also giving homebuyers a better experience.
  • FinTech Plaid shares that it unlocks financial freedom for everyone through an open banking API aggregation platform that eases the integration of many services using APIs to integrate personal and business services, working collaboratively with over 5,500 FinTech partners.
  • LinkedIn moved toward what is called a solution ecosystem model after its acquisition by Microsoft. Solution ecosystems typically capture value creation by organizing activities through agreed governance models and inviting outside developers to integrate applications and services into the platform.
  • The digital insurer, Wakam, specializes in developing next-generation insurance products. The insurer designs tailor-made insurance solutions shared as white-label through the connection and integration of APIs. They are working with a multitude of InsurTech partners.

How are digital business ecosystems formed?

Digital business ecosystems don’t just happen by chance. They rather take a comprehensive approach. The ones we’ve seen emerge over the last decade have emerged precisely because things are being done in exceptionally different ways, with market players owning fundamentally different characteristics developing between them highly synergistic partnerships.

Most notably, larger giants in industries such as insurance have to discover the most suited digital partners, who look radically different from themselves. Good examples of companies succeeding with identifying, validating, and engaging with such ecosystems include Munich Re and Prudential Pulse.

Ecosystem archetypes differ. the digital version of these business engagements are created through four crucial building blocks:

  1. The type of business ecosystems one wants to build: whether it’s a product, a series of services, or a digital business platform. It’s necessary to identify what will make this business ecosystem effective and what it will truly look like. All key parts of the business ecosystem must work effectively and seamlessly together to take the friction out of the end customer engagement and their interaction journey.
  2. The communication and collaboration mechanisms to drive effectiveness: This could be an engagement platform to focus on business communication or a technology platform where different partners develop capabilities together.
  3. The unfair advantage or “network effect” created by the collective partnership within the ecosystem: This lens establishes how the different actors within the ecosystem will synergistically operate together when developing something unique that stands apart over time.
  4. The division of the monetary-based value exchange within the business ecosystem: Each partner within the business ecosystem needs to harness enough value to make it worth their while to be part of the whole.

We can also look at digital business ecosystems as emerging in two core dimensions.

Firstly, there’s customer consolidation. With the business ecosystem approach, customers are consolidated across niches and even across sectors. The customer of insurance is also your retail customer and the customer of healthcare services, for example.

Secondly, there’s an opportunity to observe and reinvent the complete customer journey. By harnessing all customer touchpoints across each unique customer journey and amalgamating these by using multiple partners, the whole process becomes more efficient and more innovative. The customer experience is better, and the partners benefit from more significant value creation. Using an insurance-healthcare example, the customer is better able to manage their health from educative content to relevant health and wellness servicing, thus influencing lower health and life insurance premiums. The insurance company is happy to offer this, as they can rely on the data made available by wearable health tech, for instance.

The changing approach for traditional enterprises

Those confined by traditional operating models must shake up how they view their customers. Most notably, they need to think of the customer as a complete person with their own extended family, not the carbon copy of another customer reaching into any industry at this point. Instead, they must rethink each industry’s borders and look at each customer journey taken by individuals as unique and special.

This has a snowball effect.

As the business ecosystem becomes truly digital and develops products and services that extend well beyond those that individual companies outside the digital ecosystem could offer, both data collection mushrooms and artificial intelligence ripens helping reach and attract even more customers while better augmenting the relationships with those ones you’ve got. Customers come to the ecosystem through one entry point and then enjoy a continuously evolving end-to-end personalized experience. It’s simple and hassle-free for the customer and empowering for each individual partner too.

The benefits of digital business ecosystems

Digital business ecosystems create a wide range of benefits to entrepreneurs, start-up founders, investors and corporations.

  • Exponential and accelerated shared or distributed growth: Every business tends to be stifled at some point by gaps in capability. By first, identifying those gaps and then identifying and attracting partners to fill those gaps, barriers to growth are reduced. It’s very difficult, especially with the pace of change, for one enterprise to own all the required skills and assets under one roof. Combining the very best of internal and external capabilities enables different digital players to move faster.
  • Ability to focus on strengths: Hand-in-hand, with this, is the fact that if you are relying on partners to fill your gaps, you can develop your strengths even further and faster if well thought through. You aren’t weighed down by weaknesses. All of your energy and resources are churned into what you do best.
  • Efficiency savings: A digital ecosystem leader can, when carefully developed, create much greater efficiencies for all. This impacts the bottom line. The figures speak for themselves here. Gartner’s 2017 CIO Agenda report (which I am sure has been updated) revealed that 79% of top-performing digital organizations also participate in a digital ecosystem. Given the speed of change in this area, we would hazard a guess that that percentage is now nearer 100%.
  • Fair value sharing for all: By considering value for the entire business ecosystem, rather than the individual part, it’s actually possible to create greater value for all. It requires a more transparent and open approach, but it can benefit everyone.

​​Where do you stand if you want to build your digital business ecosystem?

There’s no doubt that the pandemic put our foot on the “accelerator” in the way ecosystems enable companies to grow. We are seeing notable trends emerging for 2022 and beyond that will promote for market players to find mutually supportive roles when participating in multiple business ecosystems.

Forms of embedded finance and embedded insurance are both pushing along to deliver more intrinsic ways to serve many types of customers better with seamless engagement and reduced friction. Greater encouragement by all, including authorities, to use digital payment platforms ensuring we are heading towards a more cashless society e.g. mobile wallets, P2P payments, and mobile payments. This is combined with more Buy Now, Pay Later models and SuperApps. Ongoing and greater use of hybrid working models, and remote working, requiring more permanent digital solutions, rather than the ‘make-do’ processes of early pandemic life. Growth within specific sectors particularly, including telemedicine, teleconferencing, telebanking, education, and e-Commerce activities.

We can see many of the tech ventures that are entering the insurance space doing so by focusing on the way they want to operate within their own ecosystems. Industry experts think that insurTechs need to look beyond the boundaries of the sector to concentrate on adjacent services to build longer-lived propositions.

Businesses have the choice when it comes to joining organic business ecosystems. Still, they must identify those environments that can yield the highest transaction ecosystem value.

They can be:

  • a platform orchestrator that manages access to the platform, establishing standards and rules, and setting incentives for both sides of the market in order to grow the ecosystem and exploit network effects. Orchestrators lead their own business ecosystem and engage with adjacent industries to gain access to niche market segments to grow the ecosystem and exploit network effects, and it is also where innovative business models are being created and where industry switches take place.
  • a transaction coordinator that provides matchmaking mechanisms between financial and non-financial service providers. It identifies the best fit between the specific needs of a customer and the specific offering of a producer, facilitating the subsequent transactions. Value creation in a transaction ecosystem is thus driven by the number of successful transactions and their benefits to both sides of the market. In this case, you have to think about ride-hailing platforms such as Bolt, Grab, or Uber that curate, match and ease engagement with two parties and many of the FinTech payment platforms.
  • a value chain enabler that plays across multiple ecosystems where they deliver specialized and targeted value. Think about algorithmic underwriting or object recognition visual intelligence claims management systems. Newmarket entrants co-operate with a multitude of supply chain partners to create value propositions developing mutually beneficial opportunities. They often are key operating nodes within the ecosystem design.

This is where ecosystem integration becomes a crucial driver to attract engagement partners utilizing mechanisms to grow engagement, and orchestrate external partners with no hierarchical power or control. Such ecosystem governance can be achieved through the architecture of the ecosystem and through clear rules, standards, and norms that are established in a transparent, participative, and fairer way to adjust as the ecosystem evolves. However, a certain constraint on control is simply the price of open innovation, flexibility, and resilience, so ecosystem governance must be finely balanced, leaving room for serendipitous discoveries and self-organized evolution.

Once they have worked out how to improve their business ecosystem strategy…

  1. Insurers must determine if they will be able to deliver more value from digitization than they could do on their own via the digital ecosystem.
  2. They will also need to determine their engagement style:
  • Am I going to be a participating node or a partner myself within the ecosystem?
  • Am I going to be a themed node within the orchestrated value chain, or
  • ·Am I going to be the orchestration or transaction manager and define how each node combined will yield more value for my customers?

Learn and watch out!

The pandemic has sped up and sustained the digitization of business ecosystems to ensure that everyone can accelerate their growth. Business models are fundamentally different today, and without considering the entire ecosystem, enterprises are hindering themselves by their own silo-like natures, which will become even more redundant the more ecosystems continue to grow and emerge.

At Alchemy, we combine three key parts within our own digital ecosystem as everything we do today is virtual.

We work with insurance companies and adjacent market players wanting to engage with entrepreneurs, startups, and growth ventures. We create digital environments to ease those interactions. We then interact with investors seeking deal flow and a lens on the trends that affect business-to-business decision-making.

Our focus is on delivering accelerated corporate-startup commercial engagements applying due diligence processes when determining a good partnership between growth ventures and insurers. We also belong to several international tech ecosystems ourselves to capture trends and see how we bring the right innovation in Europe.

Collaboration and communication mechanisms are optimized through a series of digital and social media engagement platforms to promote the work done by the network and engage more effectively with our target audiences. Understanding what the parties within the business ecosystem seek is primordial.

The Alchemy Crew team aims to maintain its leadership position by:

  • Continuing to serve our core industry, insurance, and evaluating strategically some of the most pressing business challenges that affect our core industry and interconnected sectors,
  • Evolving the model sitting behind our own engagement model, welcoming partners that fit within our core principle, purpose and long-term vision
  • facilitating and accelerating the identification of capabilities, solutions and business model shifts that matter for our ecosystems partners.


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