Commoditized Digital Processes and Business Community Platforms: New Opportunities and Challenges for Digital Business Strategies


The emergence of the digital business strategy concept has coincided with three other conceptual advances for our field. First, it is increasingly recognized that companies need to strategize not just about product-market segments), but also about their ecosystems. Second, there is growing awareness of the potential benefits of replacing proprietary data exchange conventions with open, Internet-based standards such as RosettaNet’s partner-interface-processes in high tech, MISMO standards in the mortgage industry, and RFID standards in retailing. Third, there is great interest in the possibilities of shared digital platforms like Salesforce.com and Amazon’s cloud-based hosting services (Markus and Loebbecke, 2013).

With their article, Markus and Loebbecke (2013) want to invite the Information Strategy Community to consider the implications of three new conceptual developments in the field. First of all, they propose the concept of the business community as consisting of overlapping ecosystems of competing orchestrators (large, powerful companies at the core of an ecosystem) in defined areas of business activity (for example automotive retailing or mortgage lending). Secondly, they distinguish standardized and commoditized digital processes in business. According to Markus and Loebbecke (2013), whereas standardized business processes are still heavily customizable to the preferences of an orchestrator, commoditized business process seem to be substantially the same across an entire business community. Finally, there must be a differentiation between customizable digital platforms that are ‘shared’ by many companies that are not necessarily in the same industry and business community platforms that are tailored for use by all members of a business community.

As stated by Markus and Loebbecke (2013), when ecosystems overlap, the digital business strategies of orchestrators have consequences beyond the boundaries of their own ecosystems. Orchestrators impose the costs of multiple platforms and process variations on their partners by pursuing competitive advantage through customized business processes and closed digital platforms. By doing this, the orchestrators will be harmed as much as their partners due to the resulting inefficiencies in terms of costs, errors and, delays. The holy grail of the digital business strategy is to achieve efficiency without sacrificing flexibility or differentiation. Markus and Loebbecke (2013) wonder whether truly efficient, dynamic business interoperability can be achieved without commoditizing business processes. Additionally, they wonder whether business community platforms are the way in which process commoditization and commonality of business practices will first come about.

Based upon the former doubts, Markus and Loebbecke (2013) believe that the concepts of business community, commoditized business processes, and business community platforms open up a range of important research opportunities concerning digital strategy. The following three opportunities are important to consider:

  • How much advantage do orchestrators really get from business processes tailored to their preferences?
  • When, how, and why do business process commoditization and/or widespread adoption of business community platforms occur?
  • What are the consequences of process commoditization and/or business community platform adoption, to the extent that they occur?

The focus of Information Strategy research needs to be expanded beyond business ecosystems to business communities.

Source:

Markus, L.M., Loebbecke, C. (2013). Commoditized Digital Process and Business Community Platforms: New Opportunities and Challenges for Digital Strategies. MIS Quarterly, Vol. 37 No.2/June 2013.

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