The process of creating products and services has undergone significant changes in the past 20 years, and we have come to hear the word “platform” often in recent years. This is because the importance of defining and implementing platforms for creating products and services that respond to the diversifying and changing needs is gaining recognition.
Digital companies such as GAFA (Google, Apple, Facebook, and Amazon) are already expanding their presence even more by taking full advantage of these platforms. Obviously, these platforms are utilized not only by these four companies but also for hardware, which is an aggregation of a number of components, such as in the automobile industry and also for building game consoles and network distribution services in the video game industry, where I used to work.
It can be said that platforms originated from “department stores” and “markets.” In other words, platforms existed from long ago and are transforming their presence with the flow of the times.
Platforms are also gaining attention as a solution for inherent problems faced by companies. The “Report on DX” released by the Ministry of Economy, Trade and Industry in 2019 anticipates the “2025 Digital Cliff”, which refers to the situation where issues such as the aging, ballooning, complication and blackboxing of companies’ IT systems are hindering their management and business strategies.
This report points out that companies that are unable to acquire technological competitiveness by 2025 will not be able to utilize data that will increase explosively and may become losers in digital competition. The “introduction of a common platform” is indicated as one of such countermeasures.
As you can see, platforms are gaining attention not only as a business model but for corporate systems as well. They have become the keyword of modern business.
What I am focusing on under such circumstances is the “process” of considering platforms. I believe that there are important lessons to learn for business people, as there are many hints for viewing business directions included in this process.
It is apparent that the use of platforms will facilitate the provision of products and services throughout the world, and in order to build such platforms, approaches that differ from those that consider and design a single product or service will be necessary. Approaches that are based on product design or service design will not work well.
Why? Because in many cases, when considering a product or service, these approaches often start by analyzing how they are used.
Let’s say that when we develop a game machine, we design it by focusing only on racing games. If the machine is exclusively for racing games, a “handle” will be the best solution for the controller.
However, we can readily see that this will not be the best solution for playing different types of games such as role-playing games, which depict spectacular stories, or thrilling action games, which require instantaneous input operations.
This is an extreme case but platforms should be created with a completely different viewpoint from analyzing the uses limited to just one product or service.
Based on my experience, I believe that the development of a platform should start with “abstraction.” Here, “abstraction” means to fantasize by looking ahead. The word “fantasize” may give you a negative impression but I believe that we can envision the future image that goes beyond general expectations by fantasizing consciously.
When I want to develop a new game machine, I start by having a wide range of “fantasies”, such as what kind of content will be created in the future and what kind of technology level and communication infrastructure will prevail when they appear.
As I have to imagine things a few years ahead, the images are naturally obscure at times but the important thing is to formulate a real hypothesis by fantasizing as much as possible. In doing so, it is also important to fantasize not only the content of the game software but also its business model and method of provision.
The method of provision refers to whether it is provided in packaged media such as DVDs and Blue-ray discs or through streaming. We must also think of the charging method such as the free-to-play style, in which users can play the game free of charge to some extent but must purchase a paid service according to their needs, the pay-to-play style where users can play as much as they like with a monthly fee, or a completely new style. The key is also to fantasize various elements surrounding the content.
Platforms should be defined so that as many applications as possible can be used, and the functions and performance provided by the platform must fully guarantee the requirements of these applications. This process requires an extremely high level of abstract fantasizing before it is realized.
By fantasizing all kinds of possibilities and abstracting them at one point, it will be possible to anticipate applications that may be developed in the future. We will then be able to understand what kinds of functions must be incorporated in the platform. If we can envisage the prototype of a platform that takes into account these abstract elements, the next process is to analyze various cases of use that will interest users and verify whether the platform has functions and performance that can fulfill users’ expectations.
So, what we are doing in envisaging platforms is making a transition from “abstraction” to “materialization.” In general, an evolvable platform that covers existing applications and also supports future applications is required. Examination including future images of products and services will be necessary in the “materialization” process, meaning that it requires imagination.
As you can see, the process of defining a platform requires practice that goes back and forth between “abstraction” and “materialization.” A broad and deep understanding of applications that will be used with the platform and the ability to fantasize are essential in this process.
You may not actually have a chance to build a platform so often but I believe that the processes of “abstraction” and “materialization” and going back and forth between these steps, which are necessary when building a platform, will assist you in various business situations. This thinking process, which starts with fantasizing, can be utilized as an approach to seek future visions that exceed general expectations and provide new value to the world. I am also confident that it will be effective in solving inherent problems faced by companies.
I am hoping that everyone will “fantasize” through the process of building a platform and that this “fantasy” will become materialized and lead to a business that will be recognized in the global market.
※This article was published in "Forbes JAPAN posted on September 7th, 2020". This article has been licensed by Forbes Japan. Copying or reprinting without permission is prohibited.
KPMG Ignition Tokyo
President and CEO
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