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Platform Economy: why you need a modular IT architecture

platform economy

The Platform Economy is probably the most effective technological and organizational phenomenon, especially for companies aiming for internationalization. Indeed, the modularity of platforms allows any type of organization to gain the agility and resilience required to forge more and more collaborations with strategic partners and to compete with far more structured and established competitors in the industry.

Just think of what startups such as Tesla, Uber, Spotify, and Airbnb have been able to do in terms of growth, and how, thanks to the Platform Economy over the past few years, they have been able to revolutionize the logic and mechanisms of markets established for decades, traditionally in control of several large corporations.

A definition of Platform Economy: the importance of the technological factor

But exactly what do we mean by Platform Economy? The field is so young that even on the academic side there is no single definition. Some circumscribe it as a component of the economy that leverages digital transformation to enable new business models and innovative interactions, both inside and outside the organization. Others see it as an infrastructure potentially common to all industries. And then there are those who call it the layering of all kinds of digital companies that rely on the concepts of sharing, collaborative, gig, and on‑demand economy.

One thing is for sure: in order to enable processes to seize the benefits of the Platform Economy, it is necessary to focus on creating a digital environment that is strongly connected to its ecosystem. Therefore, the Digital Platformthat is the foundation of the Platform Economy is crucial, but its core value cannot be separated from the surrounding ecosystem. In other words, the success of the platform is determined by its ability to respond to the specific needs of the industry it belongs to, as well as by its ability to scale quickly as the business evolves. In particular, the company with the ambition to transform itself into a platform leverages technological resources and expertise to connect assets, people, processes, and organizations through data in the context of an interactive, dynamic, and ever‑evolving ecosystem. Following the Platform Economy, the organization can enable an infrastructure of services that can be made available in real time not only to its employees and partners, but more importantly to customers and prospects.

The benefits of a modular IT architecture focused on the Platform Economy

In Platform Companies, data and services are made available to the business as if they were building blocks that, when combined, enable the quick creation of new solutions consistent with business objectives and stakeholders’ needs. Moving beyond the departmental, monolithic, and rigid logic of classic IT infrastructures and taking advantage of the potential of cloud technologies, Platform Companies leverage a modular IT architecture and a more flexible business structure. This capability enables them to seize new business opportunities in a timely manner and to strengthen and expand established ones. 

Therefore, the architecture should be based on microservices that communicate with each other and with the outside world via APIs, and it should rely on an intermediate layer that can exploit fast data and decouple external channels from the underlying applications.

The challenge of every Platform Company: the orchestrating complexity

As business needs, platform capabilities, and user traffic increase, the complexity of the systems and the platform itself inevitably increases. Thus, it becomes critical to be able to manage and orchestrate this complexity by adopting the right technologies and planning forward‑looking strategic choices. Here are some aspects and critical issues to keep in mind:

In addition to technology solutions and expertise, companies embarking on the Platform Economy path should also implement new business skills and knowledge, with the goal of identifying market needs and opportunities by devising effective long-term strategies. In this regard, Business Agility becomes a basic requirement for responding quickly to the drivers of the competitive scenario, but it is the propensity for openness, along with resilience and flexibility, that will ensure easier integration with new partners and new customers.

This article was written by Mia-Platform Team

If you want to know more about the platform ecosystem, read this article