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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.