The Significance of Building Robust Digital Ecosystems

Leading companies around the globe are eagerly investing in developing robust digital ecosystems that help them attain their strategic goals. From generating higher revenues to exploring new markets and opportunities, digital ecosystems have much to offer the business community.   

The covid19 pandemic and the ensuing shift to digital have made a strong case for building such ecosystems. Business leaders are increasingly focusing on this arduous yet advantageous endeavor.   

According to a report by Mckinsey, the ecosystem business model is rapidly growing. The integrated network economy is expected to make up 25 % of the total economy, with worldwide revenues reaching a whopping $70 trillion by 2030.  

So, what are digital ecosystems, how do they work, and what benefits can businesses expect from them? This article answers all these questions and makes a case for why you, as a business, should double down on digital ecosystem development 

What are Digital Ecosystems?  

A digital ecosystem refers to a set of interconnected IT resources that synthesize to work as a coherent whole. It is made up of multiple stakeholders and entities, including but not limited to customers, suppliers, business partners, web and mobile applications, legacy and modern tech stacks, third-party service providers, etc.  

Interoperability is critical to an ecosystem’s success, and market leaders shape many digital ecosystems. The concept has its roots in Keiretsu (Japanese for “group”), which refers to a business network comprising multiple businesses, suppliers, distributors, financiers, etc.   

By integrating enterprise applications, data, and business-to-business (B2B) practices, you can unleash the true potential of a digital ecosystem. No wonder so many companies from different industries – automobile, financial institutions, healthcare, retail giants, etc. – are moving towards establishing such ecosystems.  

However, if you don’t guide the development of your business ecosystem in specific ways, it might cause a lot of harm to your organization. Therefore, it is critical that you outline an ecosystem’s dependencies and then control them accordingly. Building a digital ecosystem map (a visual representation of your organization’s tools, platforms, and processes) helps you do that.  

Let’s explore this further.  

What is a Digital Ecosystem Map?  

Creating a digital ecosystem map is essential to your digital transformation journey. The map helps you identify what your work entails, whether you have the right tools and platforms to support it, and verify their efficiency and effectiveness.   

Here’s what you can do to build a digital ecosystem map for your digital transformation.  

  • Make a list of all the processes, tools, platforms, applications, and systems you currently employ.  
  • Next, determine the user(s) of each tool, platform, system, etc., and allocate responsibility accordingly. This step will allow you to include all the crucial stakeholders in your ecosystem.  
  • Create a tool/platform/system taxonomy that lays down the purpose and departmental ownership of each.  
  • Identify connections between various tools and determine how data flows (automatically or manually) between them. You should also spot similarities between different tools/systems and see if you needlessly repeat any tasks.  
  • Next, establish the effectiveness of each tool by first defining your expectation from it and then determining whether it is performing optimally or not. Based on this, decide if you need to upgrade or replace a given tool. Take feedback from the resources that use the tool daily – they are the best judge of its performance.  
  • Rank your tools and prioritize them accordingly. This will depend on how critical a tool is for meeting your business needs. Also, chart a plan for replacing or upgrading these tools according to their importance to your organization.  

Tools for Managing a Digital Ecosystem  

You will likely face significant hurdles in developing, managing, and leveraging a digital ecosystem. These include but are not limited to data management, service orchestration, monetization, etc.  

Let’s look at the tools that can help you manage it better.  

  • Project management tools are very beneficial, particularly issue-tracking and Agile software development tools.   
  • Data visualization tools like Tableau and Power BI also help you manage your digital ecosystem. You can also add research applications, archives, and resource libraries to your toolkit.   
  • Collaboration tools like Microsoft SharePoint also aid in identifying how effectively your cross-functional teams work with each other.  
  • A customer relationship management (CRM) platform is vital for efficient engagement.  
  • Knowledge management platforms, social media networks, and online wikis also facilitate digital ecosystem management.  

Types of Digital Ecosystems  

Let’s look at the three primary types of digital ecosystems.  

1. Digitizer Ecosystems  

These ecosystems reduce the level of managerial complexity while digitizing an existing product with the aid of business partners (anywhere between 20 –100 partners from various industries). You can build these ecosystems to add new capabilities to existing systems and create new digital revenue streams.  

A digitizer ecosystem will suit you if yours is a business that has limited digital capabilities, robust product development, and an internal focus. It is used in cases where you are looking to turn your product into a smart and intelligent one.   

Automobile manufacturers are an apt example of digitizer ecosystem beneficiaries. They get technology and services others offer to link their cars with digital services.   

2. Platform Ecosystems  

These are relatively more advanced than digitizer ecosystems. Platform ecosystems aim to connect users and devices on a platform seamlessly. And they do this while offering high-quality services and few hurdles.   

This type of ecosystem earns revenue through platform use and utilizes the data generated to facilitate similar business and service models. Moreover, it is best suited for organizations that already have robust digital capabilities and an emphasis on external competencies. Thus, well-established technology companies are the most likely contenders for using the platform ecosystem as their business model.  

Usually, these ecosystems have anywhere between 50 to 10 million partners from a maximum of 5 sectors.  

3. Super Platform Ecosystems  

These are the most complicated types of digital ecosystems. A super platform ecosystem aims to integrate multiple platforms into one integrated offering. It also obtains user data from the integrated platform and transforms it into a revenue stream by utilizing adjoining business models.  

Super platform ecosystems work best for companies already possessing high technological capabilities, along with a desire to work with business partners. Therefore, technology companies with established assets and competencies prefer this type of ecosystem.  

The Importance and Benefits of Digital Ecosystems  

Businesses worldwide are learning to adapt to technological disruptions. The best way to do so is to accelerate the adoption of emerging technologies and let go of legacy tech stacks.  

Irrespective of where a company is along its digital transformation journey, it is vital to build and leverage a digital ecosystem to aid external communication. A digital ecosystem lets you double down on your strengths and root out problems, including outmoded legacy B2B practices. It also helps you build lasting customer relationships by enabling you to meet and surpass their expectations.   

Digital ecosystems are significantly changing supply chains, bringing isolated and separate markets into one integrated ecosystem. This, in turn, helps businesses develop new products, target new markets, and achieve new efficiencies.   

Here are some of the significant benefits of digital ecosystems.  

  • They facilitate the rapid adoption of emerging technology, thus enabling businesses to benefit from cloud services, artificial intelligence, and software-as-a-service (SaaS).  
  • Integrated digital ecosystems offer new opportunities for businesses to develop new products and services. Thus, you can explore and leverage new revenue streams.  
  • They also help you improve your workflows and streamline processes by letting you track and analyze vast amounts of data as it moves through your organization. In other words, these systems bring down your operational costs and fuel profitability through higher efficiency.  
  • Digital ecosystems enable you to build sustainable and valuable customer and business partner relationships.  
  • Mapping your digital ecosystem helps you identify possible loopholes in your tools, platforms, applications, and systems. Therefore, adopting an excellent digital ecosystem strategy can significantly enhance your security.  

Examples of Digital Ecosystems  

  • Modern Banking Apps – Banking applications today offer a host of services (in-house and third-party) on a single platform. They create an ecosystem that integrates multiple services like digital passbooks, digital wallets, loans, etc., under a unified roof, so to speak. This gives users greater power over their finances while enabling financial institutions to offer their services to more people.  
  • Healthcare Sector – Digital ecosystems can encompass a patient’s entire journey. This includes scheduling appointments with doctors, documenting prescriptions, gathering test results, and giving follow-up reminders. Not only this, but digital ecosystems also help healthcare web and institutions comply with government regulations by allowing them to possess the necessary documentation and audit capacities.   
  • Automobile Industry – Automotive manufacturers also use digital ecosystems to partner with each other across various industries. This saves the time and effort required to form partnerships and contractual agreements with many suppliers.  

Auditing your Digital Ecosystem  

Although digital ecosystems have incredible business benefits, one must remember that a dysfunctional ecosystem seriously harms your business by chipping away at your finances and workforce morale.   

For example, if your tools, platforms, or systems are not synchronized or require upgrades, the ecosystem is not functioning well, thus wasting your time and efforts. Hence, conducting regular digital ecosystem audits is critical.  

Here are some questions you should seek to answer while performing the audit:  

  • How does your company manage and govern the tools it uses? What is your plan for the future needs of the company?  
  • Do your tools help achieve the company’s strategic goals and overall vision?  
  • How does data flow in your organization? How can the digital ecosystem increase your company’s efficiency?  
  • How do individuals, departments, and cross-functional teams collaborate? Who has access to what? How can you increase their productivity using the digital ecosystem?  


The growth in adoption of technology partnerships is set to expand rapidly as companies around the world shift to digital ecosystems. The goal is to drive improved business outcomes by engaging your customers through omnichannel means, thus offering them a relevant and consistent brand experience.  

Our team at Xavor can help you build a powerful, integrated digital ecosystem to enhance efficiency, increase scalability, and fuel business growth. Contact us at [email protected]. 

Let's make it happen

We love fixing complex problems with innovative solutions. Get in touch to let us know what you’re looking for and our solution architect will get back to you soon.