Five analog details behind your digital marketplace

As Priyank Chandra, a strategic advisor, notes: “Telcos are trying to follow what worked for the hyperscalers because cloud players have cracked the code across the enterprise space.” As businesses from small innovators to large enterprises change how they consume technology services, operators are finding themselves pulled toward platform-based service models that feature ecosystem-driven innovation and engage stakeholders through digital marketplaces.

Don’t forget these five details

Chandra works with CSP leaders across the Asia-Pacific region and has witnessed some of the most ambitious digital transformation, ecosystem development and marketplace creation initiatives in the industry. Given this breadth of experience, he offers five insights and expert lessons learned by CSPs as they build out marketplaces and ecosystems:

1. Some enterprise services may be too complex for zero-touch: The larger and more complex the solution and the customer’s approach to technology purchasing, the less likely a marketplace model can fulfill it zero-touch, says Chandra. “While these marketplaces are a good bet for SME and SOHO target markets, they may see a little less success in large enterprise clients,” Chandra says. “The moment you look at use cases with more complex and in-depth requirements, the trickiness starts,” he adds, “but even for cloud providers, marketplaces are not there yet for complex use cases.”
2. It’s easy to add sales complexity by accident: The primary reason for a digital B2B marketplace is to make it easier for a greater range of business customers across sectors to buy, use and manage sophisticated solutions. Chandra advises that while CSPs want to start with quick wins to build momentum behind their marketplaces, it is important to “work very closely with clients and partners to ensure marketplaces don’t end up creating more sales complexity for clients”.
3. Support and disputes become much more complex: “Marketplaces may face challenges with complex products, activation, provisioning and reversals of wrongly configured solutions, including disputes generated through them,” Chandra explains. Supporting an expanding catalog of integrated products and services derived from an ecosystem with dozens of suppliers will be complicated. When disputes occur over who is responsible for what, whether it’s effort or cash, it could negate the marketplace intent if not governed well with clear and responsive operating models.
4. Determine if customer procurement processes may not be ready: A hurdle that may undermine some of the assumptions driving marketplaces is that many businesses are not organizationally designed to buy solutions in a marketplace fashion. “I see this in the cloud procurement side of business too,” says Chandra. “Are processes aligned for cloud adoption? Often, no. Are CSPs’ customers ready for marketplaces? Not necessarily,” he says. Chandra adds that most enterprises still buy telecoms services through a procurement process, but in a marketplace setting says “there needs to be more focus on co-execution with the client and partners.”
5. Review your contracts and agreements: A slew of documents must be exchanged and executed to govern a marketplace’s multi-party commercial relationships, where any party can be a buyer and a seller. “There’s a lot of operating model preparation to do,” says Chandra, to outfit a marketplace with all the contracts, agreements, waivers and other required documents.

While substantial attention is paid to automating operations, price quotes, product management and revenue management challenges as keys to unlocking ecosystems through digital marketplaces, the difference between success and failure can be in the tricky business details that reflect the complexity of delivering solutions through an ecosystem and making sure everyone is compensated correctly.

For a closer look at what it takes to build a successful digital marketplace, download our e-book How to Build a Successful Digital Marketplace.