There are many similarities and parallels to draw from the unlikely pairing of a pond ecosystem and a business ecosystem. They must both have the right balance of elements to sustain life: adapting to the conditions, dealing with the introduction or removal of items, and providing an environment that’s healthy for all members.
Gartner defines a business ecosystem as: “a dynamic network of entities (people, businesses and things) interacting with each other to create and exchange sustainable value for participants.” There are many other definitions out there, but essentially, they deliver the same message – a group of items that must work together for collective success.
Five essential elements explained
Let’s ‘decompose’ this definition to the following five core elements of a business ecosystem:
- network of entities;
- create and exchange; and
- sustainable value.
The word dynamic is key. An ecosystem is not stagnant or dormant; it is growing. It may also rely on other ecosystems to survive or grow.
2. Network of entities
The ecosystem is made up of the people, organizations and things (anything from physical IoT sensors, to cars, to applications). These are often referred to as participants, stakeholders or actors. Ecosystem members all have a role to play for the ecosystem to thrive. Some will be leaders, others followers, orchestrators or partners. Depending on the complexity of the ecosystem some members can play multiple roles – providing value to some members but being a consumer to others.
This, in my opinion, is the most important word in the definition, because without interaction you do not have an ecosystem. An ecosystem will have many types of interactions: product/service, contractual, financial, operational and most importantly, data, which is shared between ecosystem members through APIs, such as the TM Forum Open APIs.
4. Create and exchange
Since the beginning of time humans have created items and then exchanged them for something else. Within a business ecosystem, members deliver value through collectively creating and exchanging items, and/or enabling other members to do so.
5. Sustainable value
The value created and exchanged between members must be sustainable. Ecosystem members get value through their membership in the ecosystem. It can be measured as money, bookings, likes, customer satisfaction, improved health. Those members not providing or receiving sustainable value will either not remain in the ecosystem for long, or (based on their role or importance) the ecosystem can become stagnant or die. It’s also important that the value is sustainable, which is achievable through trust and the right business model.
Going back to the pond analogy, although nature does have a wonderful way of adapting, we also know that it doesn’t take much to upset the balance, and the consequences can be disastrous. Not that different to a business ecosystem is it? But without mother nature’s wrath, of course!