TRANSFORMATION OF INDUSTRIAL BUSINESS PLATFORMS IN THE CONTEXT OF DIGITALIZATION

ПРЕОБРАЗОВАНИЕ БИЗНЕС-ПЛАТФОРМ ПРЕДПРИЯТИЙ ПРОМЫШЛЕННОЙ ОТРАСЛИ В УСЛОВИЯХ ЦИФРОВИЗАЦИИ

Научная статья

Майорова К.С.*

ORCID: 0000-0001-7218-0221,

 Санкт-Петербургский государственный морской технический университет, Санкт-Петербург, Россия

* Корреспондирующий автор (xs-ksu123[at]mail.ru)

Аннотация

Целью данного исследования является выявление и определение особенностей цифрового преобразования бизнес-платформ предприятий промышленной отрасли. Автором было определено, какое влияние цифровые технологии оказывают на существующие платформенные промышленные продукты. Рассмотрены ключевые цифровые элементы бизнес-платформы предприятий промышленной отрасли, наличие которых необходимо для успешной реализации специфичных аналитических направлений развития индустриальных продуктов. Проведен анализ трех этапов зрелости цифровых бизнес-платформ промышленных предприятий и выявлены особенности каждого из них. Автором было отмечено, что такой трехэтапный план развития позволит цифровым программно-ориентированным платформам интегрировать разнообразные физические аппаратные системы и сервисы в новые рыночные предложения в разных отраслях промышленного производства. В исследовании были сформулированы пять ключевых факторов, оказывающих влияние на успешное и эффективное функционирование цифровой бизнес-платформы предприятий промышленной отрасли в современных условиях, что впоследствии станет ключом к успешной конкуренции на будущем глобальном рынке.

Ключевые слова: бизнес-платформа, цифровизация, «smart» продукт, экономика промышленности, трансформация, индустрия 4.0.

TRANSFORMATION OF INDUSTRIAL BUSINESS PLATFORMS IN THE CONTEXT OF DIGITALIZATION

Research article

Maiorova K.S. *

ORCID : 0000-0001-7218-0221,

St. Petersburg State Marine Technical University, Saint-Petersburg, Russia

* Corresponding author (xs-ksu123[at]mail.ru)

Abstract

The purpose of this study is to identify the features of the digital transformation of business platforms of industrial enterprises. The author determines the impact of digital technologies on existing platform industrial products. Key digital elements of the business platform of industrial industry enterprises, the presence of which is necessary for the successful implementation of specific analytical directions of industrial products development, are considered. The author carries out an analysis of three stages of maturity of digital business platforms of industrial enterprises and identifies features of each of them. The author notes that such a three-stage development plan will allow digital software-oriented platforms to integrate a variety of physical hardware systems and services into new market offerings in various industries. The study outlines five key factors that influence the successful and effective functioning of the digital business platform of industrial enterprises in the modern conditions, which will later become the key to successful competition in the future global market.

Keywords: business platform, digitalization, «smart» product, industrial economy, transformation, industry 4.0.

Introduction

In a data-driven world, it is important for any industrial enterprise to create a digital business platform around its product, and subsequently become part of a smart ecosystem. It is the combination of these stages that turns business into an engine of innovation and growth. The business platform and ecosystems based on the industrial Internet of Things (IIoT) are very complex. To build them, the leaders of industrial enterprises must think in non-standard ways, consider the need for cooperation with a wide variety of partners and the emergence of new business opportunities, and all this with the aim of creating products and services focused on results. Such work will require the complete abandonment of obsolete industrial strategies focused solely on the product.

When creating a digital business platform, industrial enterprises can adopt a strategy according to which their products will become more and more key elements of the platforms. Then in the future they will be able to serve as centers for creating high-performance product-centric ecosystems.

The superiority of digital business models for industrial enterprises is obvious: they offer significant operational efficiency and scalability; Improve the quality and pace of innovation. In addition, they provide a better understanding of data, which improves customer service. To date, about 180 platforms of companies of global scale have already been created. The total value of the companies behind these networks exceeded $4.3 trillion. This trend is developing very quickly: by 2021, more than 50% of enterprises are expected to create or collaborate in industry cloud platforms [1].

Based on the above, the purpose of the study is to identify and determine the digital transformation of business platforms of industrial enterprises in modern conditions.

The object of this study is the business platform of industrial enterprises, while the subject of the study is the processes of digital transformation of business platforms of industrial enterprises. Scientific novelty of this study: the author proposed a three-stage plan for the development of business platforms of industrial enterprises in the digital market and identified the features of each of them. In addition, it was determined that the digital business platform can independently create exceptional value for partners and customers in the context of digitalization, as it responds to market and technology changes. Thus, the author formulated key factors influencing the successful and effective functioning of the digital business platform of industrial enterprises in modern conditions.

In connection with the established goal, it is necessary to solve the following tasks:

• determine what conditions contribute to the emergence of digital business platforms of industrial enterprises;
• consider key digital elements of the business platform of industrial enterprises;
• analyze the maturity stages of digital business platforms and identify their features
• articulate key factors that influence the successful and efficient operation of the digital business platform of industrial enterprises in today's environment.

Research methods and principles

Consider what existing platform products, combined with ecosystems, can teach industrial production. Most important of all is a powerful, consumer-oriented platform that literally absorbs knowledge and achievements from the surrounding ecosystem and combines them with internal technological advances, creating value and generating overall profits for all ecosystem partners. The huge hardware base makes creating applications attractive to independent developers. The expanding range of applications makes the choice of equipment offered more and more exciting for consumers. The platform literally feeds itself, and industrial enterprises can achieve a similar effect. Business platforms that can create an independent growth momentum are characterized by network dynamics and multiplicative effects. Although not all platforms act exclusively as digital hubs, most of them use powerful, data-based mass Internet connectivity mechanisms. The network nature of business platforms itself allows for increasing the critical mass, as users involve each other at a growing pace, thereby increasing their value.

The core of simple business platforms is a purely market-based mechanism that simplifies transactions. If it outgrows this stage, then the transition from the role of a transaction aggregator to the role of a platform for intelligent exchange, where powerful innovations can appear. This is closer to the business platforms used by manufacturing companies, in particular the developer platform for Apple [2]. The more advanced form offers the basis on which innovators mutually exchange offers for new products and services and commercialize them. In this case, the business platform is built into an innovative ecosystem, where the greatest power is achieved when both types of exchange - transactional and intelligent - are in perfect proportion, creating an integrated structure.

There is no more powerful source of new ideas than thousands of software enthusiasts and marketers seeking profit when they together generate offerings for platform products. The creators of any industrial business platform will strive to retain control and final approval in such a complex ecosystem. Thus, a heavy equipment manufacturer serving the raw materials market, or the commodity market can attract independent external entrepreneurs to develop a software solution for managing the fleet of its quarry dump trucks or checking the loading volumes of iron ore wagons. With the same success, a machine-building company or a manufacturer of household appliances may invite external software partners - or the same equipment manufacturers that will add value to their own products for overall profit [3].

Large industrial enterprises, such as GE or Siemens, either already offer powerful cloud platforms for industrial industries, serving as a universal software through "fabric" for customers and their equipment, or are engaged in the creation of such platforms. The market for such software platforms is still in its infancy, but it will quickly develop. So, sprawling and previously disjointed industrial enterprises for the first time will be able to combine everything that happens in all their functions. This will increase transparency and efficiency by several orders of magnitude.

For example, the Predix Industrial Internet of Things platform created by GE is an open architecture operating system [4]. It is designed to create applications that connect to industrial assets, collect, and analyze data; and provide information to optimize industrial infrastructure and operations. The Predix platform is implemented in GE and other industrial enterprises and is designed to perform several tasks, including end-to-end integration of production data in GE. With it, customers using Predix as an IIoT platform can better control and maintain their own equipment and those of their customers. Thus, the system provides the company with a command post from which it is possible to control a complex business organism, as X-ray translucent operations. The reaction time is sharply reduced, and service cycles are optimized, while the economic benefit is obvious.

There are some impressive real examples that are already working. A fully digitalized and largely automated iron ore mine in Latin America is remotely controlled by supervisors located at the parent company's office in Australia [5]. Without an industrial software business data aggregation platform, this would not have been possible. The Siemens MindSphere Platform performs a similar task. It can be compared to a system of connector units, which is easily installed on existing infrastructure and equipment. The system collects data from sensors and machines, combines them, and sends them to the cloud for analysis, visualization and management decisions. Such platforms are easy to adapt to the application in industrial enterprises of any industries and areas of activity. They can be used by the management of anything: from relatively simple mechanisms and configurations like baggage management systems at airports to complex car assembly lines. It is possible to connect R&D departments and customer service departments to such systems.

The cloud platform, which is offered "as a service", is connected to the database, so it has high scalability. Other manufacturers, such as Schneider Electric or Trumpf, have launched their own industrial platforms on the principle of "everything as a service," hoping to further create vast and powerful ecosystems around them [6]. Software vendors, such as IBM or Microsoft, also joined the creation of industrial platforms. It is important to note that platforms such as Predix and MindSphere will eventually come with application packages and thus form their own "smart" ecosystem of developers and business partners in the future. Third-party software developers will receive all the software documentation needed to create their own customized applications for typical applications such as data analytics, materials management, location tools and services. Everything is developed very individually and sold for the company's own needs. In fact, Apple will be taken as a role model, striving to become centers of large-scale ecosystems.

It will be common for industrial and heavy machinery enterprises to create their own market platforms for their products and associated data flows. For example, the German manufacturer of concrete pumps Putzmeister plans to both rent out its mobile pumps and simply sell them [7], [8]. Users of products will be able to exchange information, which will benefit all partners in the future "smart" ecosystem, because they will receive the necessary data to optimize the configuration of equipment, the use of materials and various machine parameters, energy consumption models, etc., as well as eliminate sources of errors and outages. The practical experience of users connected by such platforms will add value to everyone, and the creators of the platform will be able to monetize it through the introduction of paid access.

This study was conducted based on scientific literature and publications on the issues raised in the field of transforming business platforms of industrial enterprises in the context of digitalization. Based on the analysis of the above sources, the following assumptions were made:

1. the networked nature of digital business platforms increases critical mass;
2. the main tasks of digital business platforms are data collection, monitoring, analytics for decision making, active control of processes and equipment;
3. since business platforms are focused on efficient data analytics in a digitalized environment, this allows for implementing cost-effective predictive service schemes.

Main results

To successfully support and implement analytic specific areas of use of advanced analytics, it is important to have key elements of digital business platforms, namely:

Data. In the digital economy, data is "new gold". The more data the company collects, the more justified its decisions will be. Players have been collecting large-scale information for many years, but they still lack the ability to combine all this information and receive useful conclusions from their analysis [9]. In some cases, this is due to technical reasons, in others - to the organizational nature.

Analytical tools. Having collected the data, it is necessary to analyze them to obtain valuable conclusions. New algorithms of machine learning systems with artificial intelligence open new opportunities for analysts. Analytical tools are usually divided by the type of analytics used: descriptive, predictive, or prescriptive. In the first case, the analysis simply explains past events. In the second case, the model predicts the future with some degree of accuracy. In the third case, the analytical tool directly recommends a reasonable and realistic action.

New competencies. In addition to the managers to whom the results are addressed, and the technical specialists (big data analysts, data engineers and others) who process these results, companies need another category of employees - business intermediaries - in the process of transformation. They should be able to set out business requirements for analysts and engineers, as well as explain to management what types of analysis can be carried out and what conclusions can be expected. The professional requirements for these specialists are very high. People who act as a business intermediary should understand both the features of advanced analytics and the specifics of the business. Currently, this is the rarest competence in the Russian labor market in the field of analytics. In general, companies often underestimate how skilled their employees must be to efficiently use large amounts of data and advanced analytics. Therefore, they are often reinvested in the development of IT systems and underinvested in the development of people. As a result, employees simply do not use new, incomprehensible tools and work "in the old way."

Processes. Data, analytical tools, new competencies, and IT all combine into whole business processes. It should never be forgotten that the value chain is only as effective as its weakest link. If the data collected are incorrect or insufficient, even the best analytical tools will be useless, since the results of the analysis will not make sense. But even if both data and analytical tools are excellent, problems can arise due to the human factor. However, when used properly, large amounts of data and advanced analytics can solve the most complex problems.

The digital business platforms of industrial enterprises are primarily aimed at creating efficient information centers, based on which wide "smart" ecosystems can be created, providing intellectual and financial interaction [11], [12]. The main and most important function of such a platform is to stimulate partners for unlimited network cooperation, which creates synergies between companies. In view of the above, the following three stages of maturity of the digital business platform of an industrial enterprise can be distinguished:

Connected Product. The starting point for any industrial platform is a "smart" connected product or some connected equipment. For example, the company Biesse Group, its basis is provided by "smart," connected to the network hardware components with software filling. They know their own production and usage history and generating data that is transferred back to their manufacturers for analysis and application in improving products and processes. This is the basic initial platform model for all industrial manufacturers that is necessary for the development of the platform economy. Smart products will thus become a physical platform on their own. For example, a car can act as a node on the Internet - as well as a factory machine controlled over the Internet.

Smart service. The use of platforms provides an analytical ability to filter valuable information from incoming product data. This is then available to third-party service providers who can use it to develop smart services based on smart equipment. At the second level, industrial platforms, usually different machines, or products, are already interconnected and create a certain degree of collective mindfulness, which allows both sides of the platform, the supplier, and the user, to create software services [13].

System of systems. The last and most advanced stage. At this stage, aggregator platforms appear that offer all participants even more opportunities. It is very important that intelligent service platforms are no longer tied to physical objects, brands, or "smart" products of a particular manufacturer. In the industrial sector, for example, one can imagine a company that organizes the timely arrival on the construction site of everything necessary: construction materials, workers, tools, and heavy equipment. It is important that each new level of aggregation can bring new additional service capabilities.

Such a three-stage development plan shows that software-defined platforms will eventually begin to integrate a variety of physical hardware systems and services into new market offerings in various industries [10]. The emergence of software-defined and intelligent service platforms, including a variety of online marketplaces based on the application stores in which they are embedded, will be key to successful competition in the future global market. Note that enterprises will have to determine who they want to be within the framework of the platform - suppliers or operators and organizers. Also, how closely the platform will be connected with their product - whether the product will become open, or the platform acts rather as an additional function of the product to which someone belongs.

This plan also shows how the traditional notions of competition will change in the digitalized industrial world. An old business that sought to offer the best product on the market is hardly more appropriate. In the future, platform ecosystems, their participants and managers will become competitors - as is already happening with the Apple OS ecosystem and the Google Android empire [14]. But one should remember the key thing: in industrial industries, the basis for building all digital business platforms will remain a smart product connected to the network. The launch of the platform blurs and shifts the boundaries not only within the organization, but also outside it. This will undoubtedly lead to significant changes in the management of companies and management installations. A special form of transitional governance would be required. Industrial enterprises will have to start a cautious transition to the digital environment without losing their traditional core business [15].

Discussion

In the process of digitalization, one should transfer the centralized structure of the organization to a hybrid, and as a result - to a decentralized structure. The digital strategy and its implementation should be aimed at fulfilling the business case of the new platform, at joining the required resources necessary for prosperity in the "new world". The main skill of business platform managers will be to make decisions at any time about the optimal volume, scale and characteristics of the platform, partner participation shares and measures taken against violators of the rules. Sufficient incentives should also be created to promote best practices and harmonize conflicting goals and strategies among partners. The creation of an industrial platform implies that the hunt for profits now goes beyond the usual commodity markets - the wider market of the "smart" ecosystem. Thus, the division into the main categories of assets becomes fundamental: the enterprises with new assets and the enterprises with traditional assets.

Currently, most industrial manufacturers being innovators are somewhere in the middle between traditional and new assets. For example, automakers are engaged in the traditional production of cars, but invest heavily in schemes for sharing cars and other transport solutions that do not intersect too much with the main business [16]. For them, the main goal is to keep the traditional business in a form that brings benefits, allocating labor and financial resources to new platforms with changing parameters.

Maintaining platform productivity requires a management style that causes the platform itself to be continuously updated. Only a platform can create exceptional value for partners and customers that responds to and adapts to market change and emerging technologies. The network effects and critical mass for the success of a digital business platform depend on the following five factors:

Openness. Software platforms need to standardize development modules to remain efficient. The use of application programming interfaces (APIs) is in many cases critical to the operation of the industrial platform, as they are the most reliable way to ensure the preservation and transfer of important data to all stakeholders in the ecosystem. APIs allow for working with standard modules, while ensuring flexible and uninterrupted data flow. Therefore, one can easily expand the platform by quickly adding additional features. If all developers use a common API, they can jointly solve problems, perform tasks, and correct errors. Manufacturers focused on sales growth benefit from platform membership through increased margins, a short business cycle, expanded global reach, and powerful services in local languages.

Improving pricing. Although traditional business models can reluctantly force managers to give away products and services for free, this practice can be very successful in the context of the platform. Especially when one part of the market is used to attract another. Platforms receive extensive information from markets, so that platform pricing strategies differ dramatically from traditional approaches. They involve many more elements that dynamically change in real time and require more flexibility. Here one can easily implement elements of the Freemium business model, in which the brand offers a double offer - the younger version of the product or service is offered for free, but the expanded version, additional or related functionality requires payment. This allows for using usage-based payment models or demand-based pricing models, in which rates change every minute. Enterprises with a developed platform heavily exploit this side of digitalization.

Flexibility and agility. Creating a platform, one needs to understand well to what size and how quickly the business can grow. The platform should be flexible enough to adapt quickly to new market trends or attract promising new participants to the future smart ecosystem. It is essential that ecosystem managers recognize the importance of its flexibility and scalability. Platforms must be adaptive enough to accommodate partners who complement products or services, provide payments, or develop applications. This further enhances the platform's ability to scale quickly and reliably.

Personalization. It is on mass personalization that the ability of the entire platform to target individuals and organizations across all channels depends. One needs to understand the intentions of customers, and then dynamically and uniquely adapt the experience gained to each person and each situation. In different countries and regions, the applicability of personalization practices depends on local data privacy laws.

Cybersecurity, which is the key to everything. Customers must be sure that the appropriate security measures are correct. Authentication of community members and their actions is the main responsibility of the platform owners and their partners, and its importance is much higher than in ordinary business. The protective measures envisaged by the platform should consider both the prevention of abuse and compensation for harm caused. 

Conclusion

As a result of the study, the author comes to the following conclusions.

1. In the context of digitalization, the powerful and consumer-oriented platform created literally absorbs data, knowledge, achievements from the industry's surrounding ecosystem, thus combining these elements, and bringing total profit to all partners involved in the process. Digital business platforms offer significant operational efficiency and scalability; Improve the quality and pace of innovation; and provide better data analytics to improve customer experience.
2. For industrial enterprises, the basis for building and moving to digital business platforms is also a connected smart product. Thus, the launch of the platform will potentially lead enterprises to significant changes in the management apparatus and management strategies, namely, a special form of transitional management strategy will be required, which will allow industrial enterprises to implement a smooth transition to the digital environment of the business platform.
3. Since business platforms can absorb data, analytics, and achievements from the surrounding ecosystem of the industrial industry in the context of digitalization, they have network dynamics and multiplicative effects. As a result, the presence of several key elements of digital business platforms: data, analytical tools, new competencies, processes are important for the successful support and implementation of analytical specific areas of use of this advanced analytics.
4. Since the digital business platforms of industrial enterprises are primarily aimed at creating effective information centers, based on which wide "smart" ecosystems can potentially be created, providing intelligent and financial interaction, the author proposed to distinguish three stages of maturity of the digital business platform of an industrial enterprise: connected product, "smart" service, system systems. According to the author, this three-stage business platform development plan demonstrates its potential integration of a variety of physical hardware systems and services into new market offerings of industrial industries.
5. The effectiveness of a digital business platform depends directly on its management style, which encourages the platform to continuously upgrade. Only the business platform itself can create exceptional value for partners and customers in the context of digitalization, as it responds to changes in the market and technologies, adapting to them. Thus, for the success of the digital business platform of industrial enterprises, it is important to consider the following five factors: openness, pricing, flexibility and responsiveness, personalization, cybersecurity.

The strategy of transition of industrial enterprises to business platforms connected to the network is based on a complete cycle of transformation. In the new conditions of development and digital transformation of the industrial industry, enterprises are forced to meet new challenges, develop internal business processes, focusing on new factors that affect the functioning and improvement of production. At this stage, this is possible thanks to the use of digital technologies, as well as the active development of new products of the industrial sector of the economy with completely new functions.

Конфликт интересов Не указан.

Conflict of Interest None declared.

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