Of new ecosystems and more competition:

Of new ecosystems and more competition:

Context

• Instead of adding skills and services in-house, companies are proactively partnering with other organizations

What is happening?

• There is a fundamental shift in industry today of ecosystems, rather than individual firms, competing with each other.
• Companies are looking outside their organizations to acquire skills and capabilities rather than building them in-house.
• This means that they are also integrating and partnering with other organizations more proactively than before.

What are the reasons behind this change?

• The rise of the new-age consumer who is more aware and has access to more information is the main push factor.
• Such awareness makes them extremely demanding, and at the same time not loyal to any one brand.
• This shift is putting immense pressure on organizations to take a holistic, long-term view in terms of revenue and create a sustainable business by increasing proximity with consumers.
• Everyone understands that technologies such as blockchain, cognitive, Artificial Intelligence (AI), robotics, etc., can do wonders for their business, developing in-house capabilities and continuously upgrading those can also become a distraction from the core business.
• Such understanding itself drives organizations to tie up with start-ups and companies excelling in specific areas to deliver these requirements.

Importance of digital technology

• While the operating expenses model of selling and buying services is not new, digital technologies today have made it possible to provide almost anything as a service.
• Organizations are making revenue by developing an ecosystem of companies (like those selling fertilizers, pesticides, farm equipment, insurance, etc.), for whom the farmer is the buyer and the “farm as a service” company providing easy access to these farmers by getting them on the platform.