Successful digital marketplaces develop their gravitational pull from network effects. Simply put, this means that the more vendors and resellers join a platform, access to more choices attracts more customers who pull in more product and service providers – and this virtuous circle keeps spiraling outwards.
Clearly, it is critical to ensure that vendors and other partners can join a digital marketplace and become operational as painlessly and quickly as possible. Doing this well can have spectacular results: For example, BT, the UK’s largest telecoms service provider, reduced its average partner onboarding time from six weeks to two days. Streamlined processes and standard APIs are foundational to supporting high degrees of automated self-service for the onboarding itself, and transactions.
Conversely, partners might look elsewhere if the onboarding process is not quick and straightforward. There is a danger of the marketplace losing momentum because network effects work in reverse too. If influential partners and vendors decide it’s easier to do business elsewhere, the marketplace’s appeal diminishes, and customers defect, so other vendors have exposure to fewer customers.
This is why getting it right from the start is critical. Onboarding is not only about admitting a partner or vendor to the digital marketplace ecosystem. It is also about getting the necessary integrations in place so that the partner is up and running quickly and efficiently, without delays and retro-engineering.
But that’s only the beginning. The key reason companies join digital marketplaces is to:
- Shorten the timeline from concept to cash for their product and services
- Short circuit the traditional linear supply chain approach
- Mix and match those products as tailored offers to customers (perhaps with those from others)
- Extend their reach and addressable market in the quickest time possible
Why onboarding counts TWICE
Angela Duckworth’s global best-seller, Grit, describes why effort counts twice: “For talent to become skill, you have to apply yourself. So, talent times effort equals skill; skill is not enough.”
Talent x effort = skill
She adds, “Once you know how to play piano or do math, you have to apply that skill…then you need effort a second time to apply that skill and to create things to achieve things. It's skill times effort that creates human achievement. So…effort counts twice.”
Skill x effort = achievement
Respectfully adapting Professor Duckworth’s formula, onboarding is all about applying talent (a company’s products or services) to the marketplace by joining an e-commerce system.
Products & services x effort = Entering a digital marketplace
Simply joining a digital marketplace is not a guarantee of success. Ensuring the right integrations are done correctly and quickly from inception not only gets someone ‘on’ the market fast, but also massively improves their chances of success because it makes them easy to do business with.
Participating in a digital marketplace x effort = Success at speed and scale
In both these adapted equations, APIs are intrinsic to the ‘effort’ element and can multiply what it achieves massively because they are the most pragmatic, speedy, and economical way to achieve many necessary integrations. This means onboarding is completed quickly and painlessly through standardized and consistently applied APIs.
Ongoing API management means the APIs are replicated and reused at every opportunity, reducing IT costs and minimizing time to market over and over again. They are also centrally managed to ensure they are maintained, applied, and updated in a cohesive, consistent way to present a consistent look and feel of doing business with customers and avoid broken processes, smoothing the path to repeat business and profitable transactions.
Behind the mask
The essence of a digital marketplace is, from the customers’ point of view, to seamlessly blend the attributes and resources of the marketplace with the services and products on offer from the vendors or other partners. That way, the vendors expand their reach rapidly, without high upfront cost, and customers get more choice at the click of a mouse.
Onboarding vendors and partners is a complex business – the trick is to mask the complications and make it easy for them. A good analogy is driving a car – the average motorist doesn’t need or want to know anything about the intricacies of the engine; they just want it to perform as expected, every time.
To hide complexity from vendors and partners during onboarding, the digital marketplace owner needs to:
- Create a single end-to-end experience for those onboarding
- Integrate onboarding steps with internal assets and external systems
- Use simple, uniform application programming interfaces (APIs), applied consistently
- Capture any document as part of the onboarding process
- Enable all participants to see the status of onboarding activities
- Minimize the time spent on manual tasks for onboarding.
Using and reusing standard APIs at every opportunity is arguably the biggest success factor, which is simple to say, but needs centralized structure, management, and governance to leverage and maintain the benefits.
Making things appear simple to ‘onboarders’ and, further down the line, to those onboarded partners’ customers is complex.
The marketplace provider needs to have a really good understanding of the experience of all the platform’s participants – and smooth, properly set up onboarding is foundational to both. Onboarding isn’t just about getting a partner admitted into the ecosystem; it’s about how well it is integrated into the platform, which, in turn, dictates how well it interacts with other participants, as partners for reselling or bundling, and with the end customers.
Other onboarding requirements
The onboarding process must be secure, preferably through integration with a secure platform that validates identities. It must also allow new joiners to customize the onboarding flow and experience without disrupting other parties’ settings and arrangements, supporting different operational and business models and practices.
The vendors’ onboarding teams must be able to collect, upload, and sync documents digitally, and, of course, the time between inception and being ready to trade should be as short as possible. However, this will vary as the platform owner does not control the onboarders’ systems and processes.
In the interests of speed, security, uniformity, and cost – and to avoid the unnecessary expense and learning curve of reinventing the wheel – companies should consider using a tried and trusted platform that can get them started almost immediately.
In the next section, we look at the steps in the onboarding journey.
Onboarding is a journey
Onboarding has five overarching steps, each involving a series of business capabilities, as shown above.
Clearly, a company might not want to onboard everyone who applies to join their digital marketplace. Hence pre-screening is essential. Avoiding a problem is always a better option than fixing it, and poor partner selection could tarnish the reputation of the entire marketplace.
Pre-screening – and all the other steps shown above – should be as automated and comprehensive as possible.
The first thing a company needs to consider is what its desired end-state for the marketplace should look like – it should be similar to the schematic shown below.
This is important as the marketplace, by definition, does not function in isolation. The platform owner might sell its own products to customers or in bundles through vendors or as part of a solution through a reseller, depending on the nature of the marketplace. This means that the marketplace’s owner needs to integrate data from its catalog, pricing, quotation functions, billing, order management, payment gateways, and other customer-facing systems.
How API-friendly those systems are will determine how fast and easy it is to onboard partners. This can be significantly helped by creating policies for onboarding third parties that include electronic know your customer (e-KYC), credit checking, validation of legal entities, and much more.
Integration that relies on standard, open APIs applied consistently means these steps can be automated by simply ‘plugging in’ third-party services that offer the necessary validation capabilities. A secure API management solution will map which touchpoints need to be enabled by APIs to make onboarding as quick and painless as possible and avoid enterprises having to be involved in working out which touchpoints need APIs to make the process work.
Instead of looking into the workings of ‘the engine’, a platform that is ready to use and combines e-commerce and APIs to enable dynamic partnerships looks more like this:
The partner wishing to join the marketplace is either invited to the vendor portal or makes their own way there to sign up for onboarding and registering the potential onboarder.
Next, forms are automatically generated to collect and create essential data such as the entity’s identity and account number and collects documents pertaining to things like product or trading licenses, insurance and so on. The data is validated using an external API.
While all these processes are in progress, the platform track activities, monitoring the approval of manual and automated processes. The onboarding status is visible to all participants – see below, which shows a sample screen.
Simple-to-follow dashboards democratize the process, making it is equally available to staff within IT and business units.
That’s the way to do it – case studies demonstrate the benefits
In the Abstract, we touched on how the UK’s biggest provider of fixed and mobile services, Plus pay-TV slashed its partner onboarding time by 95% using an API-centric approach. Back in 2016, when BT acquired mobile operator EE, it needed to consolidate its fixed line, broadband, and pay TV services with EE’s mobile network services. However, each had its own complex IT environment and back-end infrastructures.
A centralized API factory model eliminated back-end complexities, encouraged collaboration, and improved operational efficiencies. As a result, the company reduced the average onboarding time for a partner from six weeks to two days. The solution was deployed in six weeks, from inception to launch. This means that both Marketing and IT can turn service concepts into service offerings at an unprecedented speed. The approach can also be extended to additional lines of business, as required.
You can read more about this case study here, but in short, the centralized API approach enabled different lines of business to reuse APIs from a centralized library that controls their application maintenance and governance of APIs to guarantee scalability and quality while fostering the reuse of API at every opportunity, substantially reducing IT costs.
This solution was developed and deployed in collaboration with Torry Harris Integration Solutions (THIS). It fed the additional experience and expertise it gained from this highly successful initiative into its DigitMarket™ digital marketplace, which embeds API management into e-commerce.
It can be deployed by platform owners in just about any sector using various models, including business-to-business (B2B) and busness-to-consumer (B2C) or any combination of the two (B2B2X). This is borne out by another example of a telecom, which is B2C, rather than BT’s B2B example, or, as shown below: the epitome of a digitally native business, rather than a digitally transformed traditional industry.
The magic of Home Jini
Digital is for everyone; its benefits should reach all economic segments of society and not be limited to a handful of big tech giants. Home Jini’s digital marketplace links trusted, semi-skilled people to those needing their services in India through an app on their phones. There is a vast array of services on offer, from social event planning to cooks, fitness training and hairdressing at home, architects, construction, interior design, decorating, drivers, security guards, gardening, and much more.
HomeJini uses DigitMarket™ to combine API management and onboarding new partners. Participants can use it as a buy, sell or rent within neighborhood communities.
The key business objectives of the platform were:
- To extend the reach to the economically weaker section of society through the platform business model
- To increase this workforce’s level of employment at the rate of 15% a month
- To expand the consumer base and build a healthy pipeline
- To allow third parties to advertise so more people can see the services on offer.
The implementation was carried out in three phases to make sure it went smoothly and demonstrates that successful onboarding is not just about technology:
- Success depended on the participation of those selling services, and they were on-boarded through awareness sessions and invitations to workshops before Home Jini turned its attention to customers.
- Vendors were trained on every aspect of the digital marketplace app – from installation to the features and functionalities – and a feedback cycle was incorporated to resolve any sticking points quickly.
- A customer-service centre was set up to ensure that vendors and customers had a single communication channel that was updated in real-time. After services are delivered, customer service representatives follow up with customers to see if they are satisfied with the service and amend the vendors’ ratings accordingly.
The onboarding journey for service providers is shown in the schematic below.
The results exceeded expectations with regards to onboarding service providers and those wanting the services. Between December 2018 and March 2019, Home Jini attracted more than 2,514 active customers and more than 840 vendors, and these numbers continued to grow rapidly.
On average, vendors increased the workload by 23% month-on-month, and the number of vendors who joined the platform increased by 90% a month.
It's interesting to see the network effects of that onboarding: The trajectories of growth for onboarding vendors and customers are similar.
Many people within India’s vast semi-skilled workforce are not well educated. Hence the onboarding process had to be simple and quick and, of course, tailored to work well on a mobile phone. The remarkable early success showed just how well Home Jini succeeded.
In homage to Angela Duckworth’s formula that explains why effort counts twice, so does excellent, API-enabled integration as part of onboarding. It is central to partners hitting the ground running, and being able to scale, at speed, in the future.
Platform owners should seriously consider using a tried and tested digital marketplace platform that embeds API management so that their efforts, too, from onboarding onwards, are multiplied many, many times over.