08/10/2018 The Evolution of Smart Business Systems Click for Google's Universal Smart Business Platform Most of today's smart business platforms started as online buyer-seller exchanges, with technology as basic as online chats & cataloguing software. This is difficult to imagine as today, they have evolved into smart eco-systems which manage large numbers of users belonging to multiple categories – mainly by using workflow automation, data exchange and a generous dash of automated decision-making, using machine-learning algorithms. These algorithms rely on digital profiles of users (a.k.a. digital identity or digital double) along with dynamic scenarios created from the collated real time data! By the way, the first smart business platform was not the Amazon Online Book Store. It was Google who launched the world's first smart business platform, catering to myriad business categories. (With the main category being the day-to-day consumer - the everyday "Online Joe" who is addicted inter alia, to Google Search & Google Maps!) Google continues to make sure that the consumer is satisfied with its free services of the highest quality. In turn, this helps Google generate revenues from millions of businesses across the world. Businesses which serve the main category to generate their own revenues - with some of them being smart business platforms themselves! Eco-systems Today’s smart business platforms are complex eco-systems, which play multiple roles. Of the multiple categories of players, a single category of of player is considered as the “main” category. All other categories in general, serve to fulfil the needs of users of this “main” category. The backbone of the eco-system is a tech-enabled platform which comprises of software & IT infrastructure. This backbone plays the key role of coordinating between players of multiple categories in real time. The technology mainly revolves around: a. Efficient & secure data sharing b. Machine learning based algorithms Thus, the platform is able to give different users real-time suggestions to help make decisions based on individual objectives: a. Profit maximisation b. Delay minimisation c. Cost optimisation Even the very objective behind each suggested action may vary from time to time, as the analysis is based on real-time data being accumulated continuously. Objective & Role of Smart Platforms In a single line, the ultimate objective of the smart platform is to shift decision-making from manual to automated. Thus, all evolving design efforts have one objective: how to collect & store data efficiently & constantly & how to use this data coupled with historical data — to ‘run’ the smart platform with minimum human intervention. This is achieved by ensuring that: 1. Every task is executed via software. 2. Smooth interaction between various systems installed across players / within a single player (APIs). This ensures that every digital interaction captures maximum data — both primary & secondary in real-time. 3. Machine learning is applied routinely to the real time data to automate an increasing majority of decisions. Automated decisions are based on algorithms which “learn” from the real time data is the real objective of smart business platforms. (Note: There is rising concern that that these algorithms are increasingly opaque, leading to a situation where human life will be “controlled” by such black box algorithms.) Ride-sharing Platform — An Example Let’s analyse a ride-sharing platform like Uber. This eco-system has multiple players who belong to different categories. But of these categories, a single category is the reason why the eco-system exists (or thrives!). The Categories: Car Owner Car Driver Map Supplying Co (e.g. Google) Car Loan Co Car Maintenance Co (viz. garages) Car Insurance Co Car Manufacturing Co Mobile Service Co Rider — This is the main category as Uber will cease to exist the day there are no riders! One thing is obvious about any smart business platform: all categories must benefit from the platform. But the main category is the reason why the platform exists. At the base, Uber has a strong technological backbone — whose sole purpose is to take automated decisions with minimum manual intervention! Thus, drivers are assigned rides & customers as assigned cars based on optimisation of mutual requirements & co-ordinates. While each ride is assigned a route based on real time traffic & map data! Digital profiles (also called digital doubles) of each consumer are created & updated in real time. And automated decisions/actions are initiated based algorithms which rely on the digital profiles of multiple consumers. Thus, complex decisions like handling consumer complaints, errant drivers, bad payments are ultimately managed without any human intervention. Role As Marketing PlatformOnce a smart platform is set up, it needs to be branded & marketed like any service - supplemented with regular promotional offers to bring in new users. But once it is accepted, it becomes a marketing platform that can be used to introduce and sell new & existing products to the various categories of players. A fact which Google has capitalised on to generate many billions of dollars per year! Google’s Universal Smart Platform The Google Platform design has evolved over the decades to address 4 broad categories of players: Consumers Advertisers Online B2C Platforms B2B Services Of the four, Google’s main category was & still remains the online consumer. Early Stage Strategy Google’s early stage strategy can be summarised as: “Provide excellent online services, free of cost to (individual) consumers. And convince advertisers to pay for serving online advertisements to the same consumer.” Consumers were always Google’s main category. Google built its business by providing consumers with an excellent Online Search Service, absolutely free of cost. It followed up with many other services - of which Google Mail & Maps were two of the most important. Advertisers were Google’s only source of revenue in its early stages. It started with local advertisers using a micro-finance model. Google tapped businesses who wanted to influence the consumers (who used Google Search extensively) by offering multiple advertising options. Soon it covered non-search ads by its acquisition of DoubleClick (which was the most popular ad serving engine, then). Note: Google’s subsequent acquisition of YouTube ensured that video advertising was included as a part of its offerings. And it ensured that it retained its consumers as they migrated to the mobile world, by acquiring Android & releasing it as a free OS for smart phones – many years before smartphones were used by almost everyone! The Second Stage Google’s second stage revenue target was ONLINE PLATFORMS. As B2C & B2B trading platforms like online bookshops, online retail & online travel sites appeared on the scene, Google’s services like Search, Maps, Calendar, etc. soon became indispensable to these platforms. (For example, it was easier to use Google Map services for a fee rather than build & maintain one.) This category soon became its 2nd major source for paid services, enhancing its revenue manifold. Note: Google’s early strategy of offering its mobile phone OS free of cost to handset-makers enhanced the value of its services when consumers started using smartphones instead of laptops & tabs! The Third (Current) Stage Google’s third stage revenue target is PAID B2B SERVICES. With its huge user base spanning across all economic categories, Google soon started offering paid B2B services to businesses - starting with email, moving onto online data storage and onward to managed web servers for business users. It included both small & large businesses. As well as a segment of individual users who had a high requirement for (say) online storage! Note: Google developed it’s 3rd category by offering to businesses for a fee, the same set of utility services that it maintained for its own products (viz. online storage, managed servers, managed email, etc.) Thus has emerged as the world’s largest Smart Business Platform!