Tech Savvy was a weekly column focused on new developments at the intersection of management and technology. For more weekly roundups for managers, see our Best of This Week series.
Identifying an industry ripe for platform disruption: If you really want to create value, forget about burning platforms and start building them. A platform, explain Geoffrey Parker and Marshall Van Alstyne (professors at Tulane and Boston University associated with the MIT Initiative on the Digital Economy), and Sangeet Choudary, founder and CEO of Platform Strategy Labs, in Platform Revolution: How Networked Markets are Transforming the Economy and How to Make Them Work for You, is a “business model that uses technology to connect people, organizations, and resources in an interactive ecosystem.”
They contend that the ranks of today’s most valuable companies are increasing populated with those that successfully build and control platforms. Think Apple with iTunes, John Deere with its My John Deere Operations Center, and a host of other platform-based companies as diverse as McCormick Foods, Amazon, and Uber.
The problem with platforms is context. The authors think platform-based businesses eventually will come to dominate every industry, but they caution readers that the window of opportunity for launching a successful platform will vary according to the characteristics of a specific industry.
How do you know if and when your industry is ripe for platform disruption? As this excerpt from the forthcoming book (reprinted with permission) details, the emergence of platform businesses is most likely in highly-fragmented industries with non-scalable gatekeepers in which information is both a significant source of value and extremely asymmetrical. The emergence of platform disruption is less likely in resource-intensive industries that are subject to high levels of regulatory control and high failure costs.
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Wearables enable and incentivize employee fitness: Amgen, DaVita HealthCare Partners, and Lockton are offering Apple watches to their employees for $25, reports Rachel Emma Silverman in an article in The Wall Street Journal (subscription required). Oh yea, there’s also some fine print: For two years, participating employees must either meet monthly fitness goals (tracked on the watch) or they pay cash for the watch in installments.
The companies are participating in a program conceived by Vitality Group, which also manages and monitors it. The payoff for employees is enhanced fitness and a cool device. Employers should benefit from lower healthcare benefit costs. (And Apple, which is not a partner in the program, sells a bunch of watches.)
Vitality says there are already 17,000 participants in the program in South Africa. The early results: “Vitality members using Apple Watch increased their average weekly physical activity by 96% after joining.”
Optimizing distribution networks with big data analytics: Most corporate supply and distribution chains are siloed, piecemeal, inefficient networks, writes a team at The Boston Consulting Group in a new article. The problem with optimizing them is complexity: A company can easily have a network consisting of more than 500 nodes — plants, clients, transloading locations, and warehouses — and as many as 100,000 arcs — ways to move between the nodes. “To optimize such a network, a company would have to analyze as many as 100 billion possible combinations,” calculate the authors.
The solution, of course, is big data analytics. But before you can put them to work, the authors say you need to do three things: First, pull together all the stakeholders to map the locations of the business’s suppliers, clients, plants, warehouses, DCs, and modes. Second, identify the cost drivers, “including particular modes of transportation, inventory in transit, and specific types of equipment,” and constraints, “such as lead time obligations to clients and production capacities of various plants.” Third, bring in a team of logistics and modeling experts to build, test, and tune a network optimization tool.
