This article is published in collaboration with the Digital Transformation and AI Awards and Summit. These are two separate B2B events organised by 31 Media. If you wish to exhibit your tech solutions or to advertise your brand at the event, please get in touch at +44 (0)203 931 5827. In this article, you’ll learn about the role of digital platform ecosystems in innovation and the impact of UX.

Author: Dennis Lenard, CEO of Creative Navy UX Agency

The role of digital platform ecosystems

Digital platform ecosystems have become central to how humanity functions and innovates. Boasting major influence in every sector, from marketplaces for goods and services to IoT and smart city infrastructure, it’s undeniable that they’re the main facilitators of value sharing among businesses, individuals, and organisations.

I like visualising digital platform ecosystems as trees: their complex network of interconnected entities functions around a central, core digital platform, as branches do around a sturdy trunk. It can only thrive for as long as its users can exchange value, much like how a tree may fall if its core is rotten or shed the branches have dried. Essentially, without a core digital platform that brings added value to users, the ecosystem is doomed to fail.

Digital platform ecosystems as facilitators 

Each digital platform must balance internal operation management with contributing to the ecosystem, as the success of each part contributes to that of the whole. Additionally, each component should meet a set of criteria to ensure the ecosystem’s health: to be interoperable, to scale well, to be secure, to follow government guidelines, and most importantly to be user-centric.

According to a 2020 report from McKinsey: “Companies leveraging platform business models grow 2.3 times faster than their peers and achieve 2.5 times higher profitability.” Digital platform ecosystems’ major impact on business growth and performance is undeniable. They’ve infiltrated our lives to the point where they’ve become indispensable and changed many social conventions: how we interact with one another, how we share personal updates, original creations, or technical knowledge, how we shop, how we manage our households, how we plan our vacations.

The true role of digital platform ecosystems is that of facilitators and intermediaries. These are just a few key examples of their wide range of capabilities:

1. Online Marketplaces: Is there anyone among us who can say they’ve never used Amazon or eBay? Sellers are reaching potential buyers in corners of the world beyond their wildest imaginations. These types of digital platforms are major catalysts for economic growth.
2. Collaboration and Innovation: I’ve never met a developer that’s not on GitHub. Such collaborative environments allow users to share code, swap ideas, suggest corrections or improvements, and innovate together. These platforms support and encourage the creation of new apps and services, thus enriching the ecosystem.
3. Social Networking: We’re living in an era where everyone is on social media, from baby boomers to Gen Alpha. Social media platforms have charmed millions with how easy it is to share, connect, and build communities.
4. Business and Supply Chain Management: Cross-country supply chain teams can now coordinate in real-time and track their cargo. These ecosystems have even changed how we find and interact with prospects and clients.
5. Accessing Services: Accessing critical services looks completely different than 50 years ago. Telemedicine, financial services, travel services, and educational resources are all at our fingertips. These ecosystems have democratised access to healthcare and education for users who would otherwise experience barriers to entry (poverty, a handicap that might affect their mobility etc.).
6. IoT and Smart Cities: Home and urban life management helps users track energy use, manage costs, and be more environmentally conscious.

Because the power of digital platform ecosystems is centralised, their impact on competition, user privacy, and market fairness has often been brought into question. Big tech companies act as gatekeepers to their ecosystems, controlling who can access their information. This raises many ethical concerns, especially when considering that they’re supposed to be at the service of users, and often end up abusing their trust instead.

The impact of UX on digital platform ecosystems

One of the key characteristics of a successful digital platform is its user-centricity. Frankly, something that isn’t built for people and with people in mind is set up to fail from the get-go. Users who walk away from such a platform are very unlikely to come back, and they’ll associate the company that built it with their feelings of frustration.

A 2021 Forrester report reveals that companies with strong user experience (UX) see an average increase in customer satisfaction of 20% and revenue growth of 10%. Happy people spend more money, no surprises there. Even so, advocating for great UX shouldn’t just be about the financial incentive, but also about treating your customers ethically. User attraction and retention, engagement, added value and trust all depend on the quality of the platform’s UX.

Poor UX is like a poison to a digital ecosystem: it will kill it slowly and steadily. Nothing sends people running to the competition like difficult navigation, inconsistencies, and inadequate support. A dissatisfied user is bound to disengage, and digital ecosystems are nothing without the people who use them.

It’s best to stay ahead of the game and address UX issues proactively. A successful digital platform ecosystem needs people who are constantly asking themselves: “How can I make it better?”

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