As the digital landscape in collections and recoveries continues to evolve, an area that is becoming increasingly topical amongst Arum’s clients and prospects is the concept of platforms.
Our work with clients who are implementing innovative technology, and vendors who are supplying this technology, allows us to see first-hand how platforms are perceived through these two completely different lenses.
One of my main observations from the many thought-provoking conversations that I’ve personally had with both purchasers and vendors is that there is still a degree of confusion around what a platform actually is. So, let’s take a look.
What is a platform?
Marc Andreessen, the founder of Netscape and successful entrepreneur, defined a platform as ‘...a system that can be reprogrammed and therefore customized by outside developers -- users -- and in that way, adapted to countless needs and niches that the platform's original developers could not have possibly contemplated, much less had time to accommodate.’[1]
The more I’ve learnt about platforms, the more this definition resonates, but it also brings to my mind two key questions if you are a purchaser:
- Are the solutions and vendors that are contacting you, and you read about daily, a ‘true’ platform business?
- Or are they, in fact, just a point solution proposition which is looking to solve for specific business use cases?
What makes a great platform business?
When we think about all the great platform businesses, such as Apple, Amazon, eBay, Airbnb, Fitbit and Uber, they have two key differentiators which make them extremely effective:
- They have built a platform which allows full accessibility to third party content creators or app builders. Essentially, anyone can build a business on the back of their platform tech, with minimal access requirements and certainly not requiring the initiation of a ‘project’ on the side of the platform or the user of the platform.
- This platform accessibility, in turn, provides businesses with a fantastic opportunity to generate significant business value and increased revenue by leveraging the ecosystem that is created as a result of all the different platform users, and the associated networks that develop around them. This means that everybody potentially wins.
While appropriate accessibility controls/rules/guidelines still need to be in place for oversight and governance purposes, we can see from examples mentioned how powerful providing access to a platform can be, and it is only the extent to which the platform provider wishes to cede control or have control over what is being created that will constrain things.
Ultimately, regardless of industry, it is not unrealistic to see how a platform provider will be open to businesses who could theoretically build all their customer management capabilities (marketing, acquisition, collections and recoveries, fraud, customer service) using the component parts of the platform, instead of cobbling together (and then having to manage) a variety of different/disparate solutions, an approach that we continue to see today.
What should platform purchasers look out for?
For those businesses who are looking to procure digital capability, and/or general collections and recoveries capability, and are being presented with solutions or services from platform providers, these are some of the questions I would be asking your vendors during your procurement process:
- How much accessibility and control are you giving me?
- What can/can’t I do if you give me accessibility?
- What other types of businesses are using your platform?
- How wide is this network of users?
- How do you get me up and running – training materials and accreditation for my teams?
- What ongoing support do you offer in relation to developing my use of the platform?
- Can application developers integrate to your existing APIs and test without involving your project team?
- How wide is your network of partners and can I see the portfolio of pre-existing apps already integrated?
- Is there an extensible architecture that is designed to easily accommodate custom changes our team makes?
- What type of reporting and/or dashboards are you providing?
- Are your clients able to share data and insights?
- What is the logical separation of client data on your platform?
- Are you multi-tenanted or do I get my own instance?
- Can I visit one of your existing users?
The answers to these questions (and many others) should really help you better understand whether what you are investing in is a ‘true’ platform, with the associated business opportunities that come with it, or whether you’re just getting a simple, standalone software solution, or perhaps a solution trying to move to a platform with associated risks.
In my next blog, I will be looking at the rapidly growing area of Conversational AI and sharing why we believe that this area is going to become increasingly important over the next few years in collections and recoveries and what we have seen with some of the true platform providers in this space.
In the meantime, if you would like to find out more about how Arum can help you with your digital collections assessment and transformation roadmap, digital front-end or conversational messaging interfaces, digital delivery, or digital vendor market analysis, vendor scoring and selection please contact me directly.
Huw Vaughan
Senior Digital Collections Consultant
Arum
[1] http://web.archive.org/web/20080229163206/http://blog.pmarca.com/2007/06/analyzing_the_f.html