Managing the Ecosystem Optimize Magazine By Marco Iansiti

1. Managing the EcosystemOptimize MagazineBy Marco Iansiti Presented by: Noha Zaki

2. Concept • Increasingly interconnected world • Smart companies rely on networks (partners, Suppliers, and customers) • Networks are like biological ecosystems (companies succeed and fail as a collective whole) • Ecosystems help companies become more resilient to market changes and more responsive to customer needs

3. concept • Business ecosystems are wide spread in industries such as: banking, biotechnology, insurance and software • IBM and Microsoft: remain at the hub of their business ecosystems by working with a network of partners to bring products and services to customers

4. Question How a company best manages assets it doesn’t own but are critical to its success?

5. First Step • Understand ecosystem strategies • Executives must craft new strategies that fit the new networked world • Rely on ‘key stone’ species to maintain the health and productivity of the entire system • eBay, Wal-Mart

6. Second Step • Use technology as the connective tissue that lets the ecosystem function, grow and develop • Technical infrastructure that allows them to share information and encourage collaboration • CIOs have central roles

7. Wal-Mart • Success depends on IT decisions that are closely tied to its understanding of its ecosystem • Supply chain ecosystem (from manufacturing to consumer) • Creates value by providing massive new channels to reach consumers worldwide • Capturing customers and sales data by using a computer system that manages thousands of stock-keeping units from thousands of vendors • Analyse data and share it with suppliers • Significant cost advantage

8. Measuring the health of performance • Robustness: • ability to survive disruptions and unforeseen changes • Provides a buffer against external shocks and provides a degree of predictability • Survival rate of ecosystem members ( customers, suppliers, distributors)

9. Measuring the health of performance • Productivity: • Ability to consistently transform technology and raw materials( labour, process) into lowered costs, new products, and functions • Measured by return on investment • Niche creation: • Ability to create new, valuable functions and foster diversity that creates real value

10. EBay Vs Enron • EBay: • keystone strategy, benefiting entire ecosystem • Easy- to use tools (simple for buyers and sellers) • Transparent trust system • 85% of web-based auction revenue

11. EBay Vs Enron • Enron • Make profit ignoring the health of its network • No sharing of information • No transparency • Flamed out through combination of misguided strategic decisions and unethical behaviour

12. Steps to be followed by CIOs • First month: Take stock of your system • Know your ecosystem and how it’s working • Analyze your role • Understand role of technology • Analyze how your changing ecosystem is impacting your role, your strategy, and your business model

13. Steps to be followed by CIOs • Second month: look at where you and your ecosystem are going • Is your role in the ecosystem the one you want • Identify the network strategies that work best for you • Determine the assets needed to manage and execute your strategy (potential new partners)

14. Steps to be followed by CIOs • Third month: Set up metrics to help manage ecosystem • Examine need for new information sources and business applications • Define critical ecosystem measures • Examine partners and develop metrics to assess ongoing evolution • Build ecosystem dashboard • Examine critical technology and information assets that help in shaping the business ecosystem