Wednesday, November 29, 2023

What is a Digital Platform, and what are its Business Benefits

By Bineesh Mathew - June 30, 2023 7 Mins Read

What is a Digital Platform, and what are its Business Benefits

Digital platforms are vital components of the digital transformation of corporations, creating an online space for interaction and transactions between consumers and businesses—different digital platforms, including service, media-sharing, and social media platforms. A company’s selection of a particular digital platform depends on the desired outcome of the digital business.

The operating model of social media platforms works on advertising sales and user interaction. Service platforms can speed up digital transformation by providing simplified access to products or services via a single click. Meanwhile, media-sharing platforms may adopt a business model that leverages data-driven advertising to achieve their strategic objectives.

A platform should have top-notch security measures for customers and the business and encourage fruitful engagement between the enterprise and consumers to be successful. Moreover, it should be flexible to grow and evolve with the ever-changing digital environment and deliver value to its users. The appeal of digital platforms depends on their user-friendliness and aesthetic design. Furthermore, incorporating Application Programming Interfaces (APIs) can be a strategic tool for expanding an organization’s ecosystem and maximizing platform utilization.

The strength of platforms depends on their ability to offer integrated analytics and personalized solutions, providing a competitive edge. Each digital platform shapes user interactions by implementing specific regulations such as limitations on advertising revenue, content, supplier management, and user relationship guidelines. By addressing issues such as complex vendor management workflows, labor-intensive metadata publishing procedures, and limited distribution avenues, digital platforms can alleviate extended product launch times and the operational expenses attributable to manual back-end operations or legacy platforms that lack self-service capabilities. Additionally, these platforms can enhance the customer experience by streamlining front-end systems that are often cumbersome and challenging to navigate.

Digital platforms offer solutions to various challenges by enabling non-linear content distribution, creating bespoke service-oriented applications, optimizing workflow management, enhancing flexibility in defining digital assets and media formats, simplifying customer front-end systems through a unified interface, integrating analytics, and offering personalized support services.

Examples of successful digital platforms are:

Social media platforms: Facebook, Twitter, Instagram, and LinkedIn

Knowledge platforms: StackOverflow, Quora, and Yahoo! Answers

Media sharing platforms: YouTube, Spotify, and Vimeo

Service-oriented platforms: Uber, Airbnb, and GrubHub

Distinct Features of Digital Platforms

  • Open and Shared Data

Utilizing a digital platform allows organizations to access open and shared data, which experts can intelligently analyze to gain heightened insights into the industry and generate new forms of value. In addition, companies can comprehensively track customer behavior. With data being made accessible to all parties involved, the digital platform promotes transparency within business processes and precision regarding data management.

  • Network Effect

One viable strategy for businesses looking to unite diverse users in their ecosystem involves developing and deploying a digital platform. Such a platform enables partners and merchants to collaborate with more customers, expanding the market base. When more participants come together, the risk and cost of market creation shift from business to network. As the network grows, the digital platform ensures a fair and equitable distribution of costs among participants.

The networking effect works exceptionally well for businesses that intend to establish a platform that connects their user base, including suppliers/vendors, organizations, and end customers. However, this approach may not be as relevant for entities seeking a digital platform to facilitate business growth.

  • Concurrence of Technologies

Incorporating advanced technologies into operations can enhance business processes and strengthen customer satisfaction. Modern technologies such as cloud computing, artificial intelligence, machine learning, automation, industrial internet, analytics, and mobility can be effectively utilized when developing a digital platform. Introducing an “as-a-service” digital platform can significantly impact investment levels, cost to serve, and speed to market. Integrating business processes, infrastructure, and software with the digital platform offers small and large-scale organizations the opportunity to benefit from modular, scalable, and plug-in services.

Capabilities of a digital platform

  • Basic Digital Platform

Digital platforms have revolutionized how organizations conduct their businesses by providing facilities that optimize business processes. These platforms offer eCommerce capabilities that enable online product sales and facilitate digital transactions with suppliers, retailers, and customers. Consequently, businesses must frequently update their website content and product information to remain competitive in the digital marketplace. It is important to note that such capabilities are ubiquitous and can be found on most popular digital platforms.

  • Advanced Digital Platform

Leading digital platforms such as Pimcore offer more than just product, content, and commercial transaction management. They allow businesses to create a customized digital platform tailored to their needs, efficiently managing customer, vendor, supplier, and distributor-related information and streamlining marketing operations for business growth. An advanced digital platform handles all post-production activities, with different operations managed by different frameworks. Let us understand these frameworks in greater detail.

Business Benefits of a Digital Platform

Establishing a digital platform offers many advantages to bolster a business’s success. A company can attain quicker innovation and market launch capabilities by automating and abstracting cloud setup and simplifying governance processes. Furthermore, this can result in more business model opportunities and reduced risk while testing novel ideas in multiple marketplaces. The implementation of digital platforms requires meticulous planning and execution, despite its significant benefits, making it a challenging yet highly rewarding task for companies striving for faster innovation, higher quality, improved reliability, reduced costs, and employee satisfaction. By streamlining processes and targeting business problems, organizations can leverage digital platforms to gain a competitive edge.

Digital platforms allow businesses to quickly and efficiently address customer needs and feedback. For instance, an integrated digital customer relationship management system can share important customer data across various departments if a customer contacts the customer service department with a technical issue. As a result, the technical support team can promptly return the customer’s call and have immediate access to all pertinent details related to the complaint. This streamlined process improves the customer’s experience by eliminating the need to repeat their concerns.

Automated configuration and infrastructure solutions offer superior quality and effectiveness compared to manual testing. The increased efficiency of automated testing reduces environment-specific issues. Nevertheless, manual testing provides the advantage of human judgment calls. To achieve optimum results, combining manual and automatic testing is ideal. Moreover, implementing an effective rollback system with health checks facilitates quick and efficient resolution of deployment failures.

Another advantage of implementing a digital platform is its enhanced reliability. The logging, monitoring, and alert features facilitate the speedy identification of any atypical operational occurrences, improving business continuity. Furthermore, this technology catalyzes innovative and experimental policies while promoting more efficient and straightforward procedures. Lastly, leveraging cutting-edge technology at a reduced expense is another valuable benefit of incorporating a digital platform into business operations.

Standardizing cloud building blocks offers a cost-effective means of providing cutting-edge technology to digital service teams and optimizing traffic flow. Furthermore, this approach promotes cost management and lowers the expenses of expanding a digital team. Organizations can effectively visualize and manage infrastructure costs by centralizing automated infrastructure touch-points, resulting in overall savings. A digital business platform creates a more productive and happier workforce.

Also Read: Top 6 Digital Transformation Best Practices for Enterprises

Summing Up

From a business perspective, a digital platform encompasses a space where exchanging information, goods, or services occurs between producers and consumers and the associated community that engages with the platform. It is vital to recognize that the community is a fundamental component of the digital platform, as the absence of such a community renders the platform relatively worthless.

The ubiquitous use of digital platforms can be attributed to their success in serving various purposes and businesses, leading to a diverse range of platform models. Continuous interaction with these platforms has become commonplace.

Enhancing the standardization of business processes by implementing a digital platform can significantly improve workflow efficiency and transparency, leading to improved internal management and better customer satisfaction. This technology allows companies to develop and launch products more efficiently, offer superior customer service, gather valuable intelligence to enhance operations and inform strategic decision-making. This improved intelligence empowers employees, including customer service representatives, with the necessary data, analytics, and insights to more effectively engage customers and boost revenue.

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Bineesh Mathew

Bineesh Mathew is an accomplished senior writer with 10+ years of experience in multiple domains. With a proven track record, he has specialized in writing for business strategies, innovations, the latest technologies, and management topics. Currently, Bineesh is working as a Senior Content Writer with On Dot Media. Bineesh is an English Literature graduate who has mastered the language with excellent editing skills. As a writer, he has contributed exciting writing pieces for various topics such as digital marketing, cybersecurity, and different latest technologies, including supply chain, management, enterprise leadership, and much more.

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