Retail consumers – Challenges
Competition to secure retail consumers has resulted in price cutting, as differences in service features is marginal. The option to secure loyal and an increasing number of consumers through facilitating businesses, particularly SMEs, who in turn would act as a channel to generate what we call the “network effect”, is a proven formula that has been used successfully by digital giants.
CSPs have traditionally focused on directly wooing the retail consumer, which does not permit significant value addition to the consumer’s business model, outside of the CSPs own intrinsic capability. An alternative has been - to create communities consuming related artefacts, operating under the CSP’s network in a platform model, such as Smart Cities to secure IoT (Internet of Things) traffic.
While this was a step in the right direction, the reality of revenues from IOT did not, as yet match expectations, nor was there a growing number of consumers onboarded. Such initiatives were put on hold, maintained as pilot projects or even discontinued. As we analyze what really drives traffic, it becomes clearer that increased traffic is the consequence of transactions taking place between parties that did not transact prior, or, as a result of meaningful interchange that is enabled, takes place with far higher frequency. This additional traffic, in a business to business setting, would drive loyalty if the CSP continuously enriched transaction possibilities by matching algorithms or housing applications that are relevant to specific industry groups to which individual platforms for engagement are offered.
B2B2C as a channel to add value
Platform revenues as we know are generated by the exchange of value between supplier and consumer under the umbrella of a Platform sponsor/manager. The value provided by the platform owner often being that of curation of content, in terms of matching supply and demand in the most appropriate manner. Airbnb finds the right accommodation based on search criteria being matched with available properties at the time, listed with the platform.
With retail consumers, engagement with the platform to consume goods or services offered, is often quite simple, involving a downloaded application which accesses a repository exposing current inventory and a payment gateway. In the case of business to business offerings, value exchange is limited by the technical ability of the participant’s own IT infrastructure to expose and consume what it has or what it orders.
APIs we know are the universal means of exposing technical assets, data and functionality. If the platform participant does not possess the ability to expose his offerings in an API friendly billing model, his ability to play in the digital marketplace is severely curtailed. This is invariably the case with the vast number of traditional businesses that while being able to purchase from e-commerce sites or even display their wares, do not have the required back-end systems to engage commercially, outside of the platform owner’s billing mechanism which controls the transaction. Such models involve significant fees to the platform owner under whose umbrella the transactions are conducted.
Platform 2.0 – the true differentiator
Building extended families
A CSP on the other hand, earns from the transport of data, not from the value of the transactions on the network. His revenue model therefore does not require him to impose a transaction fee but simply facilitate traffic. This would allow the CSP to forge durable relationships between participants without taking control of transactions, except to curate, and even actually make available business support systems (BSS) such as Billing, Customer Management, Fraud Protection and where required, Payment processing i.e. BSS as-a-platform. This offering together with customized, industry specific matching algorithms, would allow several digital participants to engage. Tools and products necessary for the participant to store, expose and orchestrate its own APIs with those of the partner ecosystem, that is introduced by the CSP, could be made available. These tools, such as API Gateways and Repositories are individually often too expensive for small and medium businesses (SMEs) to purchase and configure.
Torry Harris Business Solutions (THBS), offers a complete suite of products and services that could be white-labelled and offered by the CSP to facilitate its platform partners. THBS is a middleware focused solutions provider established in 1998. It works extensively with CSPs and other large enterprises such as BT/EE, Airtel, Telefonica O2, Three Ireland. THBS also manages the Integration Framework for Schneider Electric, which drives their Go Digital initiative.
These products are a direct result of actual needs of clients identified during THBS’s twenty years of experience and expertise in the Integration space. These engagements often fill the gaps between expensive proprietary systems that do not adequately interface with older but extremely valuable customer-friendly legacy systems, that cannot be retired without customer impact. Each block or product within the API-o-Blocks family is separate and addresses a specific integration need. They can be used together or with other industry products. They are built on transparent Open Source libraries. They are available together with the required services, to rapidly expose the CSP’s own back-end systems to its platform participants and also, most importantly, as the key differentiator, can be made available to the platform participants themselves under a branded offering by the CSP.
The diagram below illustrates the differences between Platform 1.0 and Platform 2.0
A shift is therefore realized, from price reduction to value enhancement. The CSP transitions to a DSP, Digital Service Provider.
Specific improvements in the perception of the CSP through transition to DSP:
- A provider of new business and employment opportunities
- A trusted advisor offering industry-specific tools and advice
- An introduction service to other network participants
- Provision of back-end systems such as Billing/Customer management, needed for small/medium businesses
- End-to-end conveyance and consumption of the business offering in a secure environment
Tools and Services Offered by the Digital Service Provider
DigitMarket is a suite of products and services that allow businesses or individuals (who do not have an API backbone), to quickly expose their assets, inventory, availability of time or services through an API framework that allows real-time integration. Along with API-o-Blocks, it offers a robust and secure way to create an extended family of users of the CSP’s network.
The white-labelled tools the CSP will provide to its users, for quick onboarding to the digital economy, would include:
- API gateway to screen, secure, provision and manage incoming API calls
- Repositories to house their APIs, make available for consumption
- Industry specific APIs and adaptors to widely-used customer management packages
- Customized individual help where required for legacy system integration
DigitMarket can be configured to meet the needs of different communities of users who have common interests and needs. These different configurations or Avatars of DigitMarket are created by any licensed entity or client of THBS.
One such Avatar created by THBS is "Home Jini" that was launched in Bangalore, India in 2018.
Home Jini was designed to enrich the lives of low-income domestic service providers which in India is a way of life for many millions. They include cooks, cleaners, Dhobis (people who attend to washing/ironing clothes, coming home to collect laundry and return it often the next day). An extended service community consists of plumbers, electricians and carpenters. All of them were given downloadable applications on their Android phones that allowed them to connect with similar applications installed on the phones in communities of apartment dwellers in their area.
Ratings are provided by users of each service provider and of each service user. This results in a behavioral improvement as - abuse of time, cancellations, bargaining for fees after rendering of service, is avoided.
The main purpose of the case study being to demonstrate increased network traffic, loyal and expanding subscriber base.