Re-approaching the Digital Supply Chain: Are We Ready for an Enterprise Digital Marketplace and leveraging Service catalogue enterprise wide?
By: Arvind Mehrotra
Tags: It Strategy, Service Catalog, Supply Chain, Digital Strategy, Digital Transformation

Re-approaching the Digital Supply Chain: Are We Ready for an Enterprise Digital Marketplace and leveraging Service catalogue enterprise wide? Arvind Mehrotra Follow May 30 · 6 min read

In my last blog, I wrote about how the cracks in supply chains are beginning to show due to COVID-19. Surprisingly, the same holds true for digital supply chains as well, which often mimic the inefficiencies of their physical counterparts. Forrester recommends IT infrastructure and operations (I&O) leaders evolve their #service catalog into a strategic control point for the business to enable visibility, agility, and control. Without one, your business will struggle. Working with some of the world’s leading digital companies in the last few weeks the fault lines are developing internally, as organizations co-locate to WFH or operate from temporary offices the internal teams struggle to deliver seamless service to business functions. Expectation from IT organization is no longer just to keeps the lights on or a successful execution of business continuity, rather digitally enabled and successful IT organization are expected to enable the business with technology, along with it partners so that the business is able to achieve organization wide goals.

To facilitate this shift, IT organizations must now focus on the support, delivery, and operations of services rather than just IT technologies service. IT organizations must have an expanded view of the service catalog to encompass all shared services groups in the organization (e.g., HR, finance, facilities, etc.) extends the cost savings of service catalogs while also providing employees with a single, intuitive interface for requesting any type of enterprise service. But most service catalogs today simply describe the capabilities and available services that IT offers to the business. Service catalogues are never ‘complete’ because they become out-of-date the minute a new service is deployed. It’s better to think of them as continually evolving but with information that is as-complete-as-possible at any given moment.

Specific service components are left in the lurch, unable to move full steam ahead with the momentum you would need for business continuity.

Could an Enterprise Digital Marketplace come to rescue? What are some of the tools and solutions you can use to deploy a full-scale Enterprise Digital Marketplace to tide over this period of crisis?

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Planning for a More Evolved Marketplace Environment

To begin with, one must acknowledge the disruption that COVID-19 has introduced. Supply chains have gone from “digital-first” to “digital-only” almost overnight, and enterprises without the requisite agility saw significant cracks. But your customer needs (and by the “customer,” I mean every service consumer — from employees to partners and vendors) have not gone down.

Therefore, an enterprise digital marketplace must continually evolve to bring in the functionalities and capabilities you need to offer a stronger value proposition to “customers.” This value proposition has two prongs:

● Better offerings — New capabilities available in the marketplace for customer use, which could include freemium products, loyalty programs, on-demand services, ins-tore integration for purchased services, conversational interfaces for support, and so on.

● Better availability — The ability to onboard new partners to replenish your offerings/add to them, which includes complimentary product providers, local logistics partners, payment gateways, third-party developers, and so on.

The goal is to achieve an Enterprise Digital Marketplace that has all the convenience of a physical storefront with none of its inefficiencies — and actually enhancing value via digital technologies.

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The Technologies You Need to Power this Hyper-Resilient Marketplace

At the heart of the enterprise digital marketplace lies a next-gen ITSM platform coupled with a marketplace layer on top.

For instance, CloudFX has a digital marketplace platform that provides customers with secure and easy access to multi-cloud services. This comes with SSO protection as well as built-in identity access management. You can integrate the platform with your existing financial management and information management stack, effectively building a unified marketplace for physical products, packaged services, SaaS — the whole nine yards.

An enterprise digital marketplace like this enables a “single pane of glass” visibility that you’d need to anticipate customer demand, gauge supplier capacity, and align your logistics.

For enterprises starting from scratch, however, I would recommend a digital commerce solution with native marketplace functions. Think on the lines of Broadleaf Commerce (an open-source platform for B2C/B2B marketplaces) or StoreHippo (a SaaS platform for enterprise e-Commerce).

Several enterprises have seen impressive results from developing a resilient marketplace. In 2015, ServiceNow launched its own app store that would strengthen its customers’ ROI from ServiceNow. The company is constantly adding to its catalog, with solutions from a diverse spectrum of vendors like Cisco, Deloitte, IBM, and of course, ServiceNow’s own offerings.

As you can imagine the revenue generation possibilities here are immense.

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Reaping the Benefits with a Best-Fit Revenue Model

When it comes to monetization, there are several options to consider. Here are some of my recommendations:

● A commission-based structure — The enterprise levies a percentage or a fixed fee for every transaction.

● Purchasable features and tools — Like ServiceNow’s own offerings on the app store, these bring in direct revenues.

● A subscription model — Customers become recurring members (akin to a loyalty program) to access products/services.

● Monetizable support — The enterprise offers monetizable support services like implementation, customization, integration, etc. to complement a marketplace offering.

● Ad revenues — Monetizing the website real estate of your marketplace through advertising.

● Logistics services — The enterprise looks after the distribution aspect, charging marketplace vendors a fee for warehousing, shipping, and returns.

● Commercial services — The enterprise offers vendors support like customer service, payment gateways, and financing for a fee.

● API calls monetization — For marketplaces offering digital assets, enterprises can charge a recurring fee as per the number of API calls.

Needless to say, your choice of monetization approach will depend on the nature of what you’re selling, who you’re selling to, and who is your partner/vendor. In my experience, not every marketplace will extract a positive ROI from day one — it is advisable to wait until there is a critical mass of users/transactions before hitting monetization.

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It is Time to Rethink Operational Processes for an Enterprise Digital Marketplace

A digital marketplace can be an effective way to achieve and sustain your market leadership — especially during a time of crisis. Now that our traditional supply chains and distribution networks are starting to fall short (I’ll amidst the occasional exception to the rule), enterprises can reimagine their operations, to unlock fresh opportunities.

First, one should look at partner selection and onboarding processes to streamline the very base of your marketplace. Next comes the payment workflow — defining your transaction processes, payment collection, and revenue distribution. Logistics is also a vital area if your marketplace features physical products.

This will help you improve efficiency and lower costs in the short term, as you are eliminating the typical inefficiencies of B2B marketing, sales, and distribution. In the long run, you are looking at an exponentially better customer and partner experience that reduces churn to a bare minimum.

To continue this conversation, please drop me a line at <<Arvind@AM-PMAssociates.com>>.