What is a Digital Ecosystem? Benefits, Types, and Examples

Have you ever thought about how companies that started simply become giants that take in multiple markets? Take for example Google. It started as a search engine and now you have Gmail, Drive, Ads, Shopping, and much more. How did it happen? Because of the digital ecosystem model.

This concept might not sound very familiar to you. Still, no worries because in this article you are going to learn what a digital ecosystem is and how it can benefit companies.

👨‍💻  Digital Ecosystem definition

A digital ecosystem is a group of interconnected companies or services and products within one company. The key to its success is the connection, unification, and interoperability between all parts, which can be providers, suppliers, partners, technologies, and even the proper customers. 

There are digital ecosystems made from companies partnered together so they can widen their product or service offer, but sometimes only one company manages to create a whole ecosystem of products and services interconnected.

The main focus of a digital ecosystem strategy is to provide more value to the customers. By understanding each customer better and adjusting the product or service offering, an ecosystem company can grow revenues and expand its market reach.

image of marketing meeting

📱   Main characteristics of ecosystem business models

Let’s see some of the main characteristics of a digital ecosystem company: 

1. Uses data as the key

Digital transformation is allowing companies to gather much more data and information about, for example, their customers, products, services, or processes. This data can result in very valuable knowledge, if used properly, for making better and informed decisions.  

2. Focused on the customer

As we mentioned above, digital ecosystems are customer-centric and strictly focus on offering value. Some of the most important companies nowadays started without even thinking about monetization, they just focused on offering the best product or service and fame and fortune followed.

3. Automates as much as possible

Automation improves customer satisfaction, allows lower costs and it is very useful in building up a digital ecosystem. For example, many companies gather insights from their suppliers or third parties that act automatically upon other parties of the system to improve the final result.

4. Committed to going global

Since scaling is notary when a company decides to create a digital ecosystem, limiting it to a certain region or country could be counterproductive. That’s why these companies seek to go global and are committed to achieving it by collaborating across different geographies and handling cultural barriers. 

5. Mindset ready to adapt and react

Being dynamic is very important while scaling toward a digital ecosystem. Some processes need a quick adaptation and reaction, so these companies must cultivate a flexible mindset, along with strong business intelligence.

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📝  Digital Ecosystem Examples

We already talked about Google as an example of a digital ecosystem strategy for amplifying its market, but let’s see some more examples. 

Amazon

This company started as an online marketplace, but now you can not only buy the e-reader but also the books for it, along with audible books that you can listen to on their connected home device Alexa. And this is just the tip of their digital iceberg, all based on their customers’ needs

Healthcare digital ecosystems

These systems digitalize multiple processes of the patients, making the experience more agile and comfortable. For example, a digital healthcare ecosystem could include:

  • Appointment scheduling and reminders.
  • Test results notice and registration.
  • Digital prescription connected to pharmacies.
doctor working on a computer

🖥️  Types of Digital Ecosystems

On one hand, digital ecosystems can be classified by the number of companies involved. In that case, there are two possibilities: 

  • In-house ecosystems: where a single company offers multiple products interconnected, sometimes gathered as a suite. Frequently this implies benefits for the clients that choose to use more than one product, like extra features.
  • Multi-company ecosystems: in this case two or more companies collaborate and partner up to offer a wide variety of products and/or services. Unlike a merger, in a digital ecosystem, each company continues being independent, while contributing and benefiting from the network created. 

On the other hand, digital ecosystems can also be classified by their offer:

Functional Digital Ecosystems

The ecosystem is built around an existing offer or product, being this is the simplest digital ecosystem business model. Normally in these cases, the system tends to have some limitations like, for example, the fact that normally it’s closed.

In the automotive industry, this kind of ecosystem is popular. Partners create a network to optimize their manufacturing and supply chain, achieving a more autonomous, electric, and connected product. 

Platform Ecosystems

This digital ecosystem offers a common platform where all the companies connected work and operate together. It connects users and smart devices on a platform, while simultaneously guaranteeing high service levels and limited obstacles.

Super Platform Ecosystems

Super Platform ecosystems integrate various platforms to create an even more complete service. Normally they involve different industries and can create a wide range of customer journeys. This type of ecosystem is common in tech giant companies like Apple or Amazon.

image of amazon's alexa

✅   Benefits of the Digital Ecosystems

If things are done well in a digital ecosystem, this model of business offers lots of benefits, both to the company and the customers. 

  • More customer loyalty: the fact of offering a whole family of products means listening more to the client’s needs and helping them better. Also, since they can find many more solutions in the ecosystem, and they are all interconnected, they won’t need to look elsewhere.
  • More revenue sources: using another company’s infrastructure can help a partner create new products or fasten their production, which results in growth and increase of their revenue. Also, customer acquisition costs become lower when a company offers a family of products.   
  • Better preparation to confront changes. Any economic, technological, or global issue can be confronted much easier when being a part of a digital ecosystem. This business model allows companies to adapt to circumstances like, for example, a global pandemic much more quicker.
  • Improved workflow and work relationships. Digitalization allows a company to work much better with data and insights, from customers and workers, making it possible to improve workflows and create a whole new mindset. 

 

It is clear that these ecosystems are a great model to improve companies, making them grow to unimaginable levels. If you want to become an expert, capable of developing ecosystems as such, you might be interested in our Master in Digital Business Innovation, in which you will learn the skills necessary to lead the digital revolution 🚀

Shirly Nowak
Shirly Nowak es una experimentada Project Manager y Copywriter, con más de 5 años de trayectoria, en los que ha podido trabajar en proyectos de diferentes sectores.