|In the run up to the event, we have invited Shri Krishan, Senior Industry Principal at Infosys to give some of his insights and thoughts on an exciting trend in the telecommunications space: Marketplaces.|
Digital marketplaces are fast emerging as a vital area for CSPs to create new digital offerings for business growth, as they otherwise find themselves hitting various walls in terms of market saturation.
The numbers are already impressive: 130% YoY growth in collective sales on marketplaces in 2021, and no signs of slowing down.
Earlier in the year CloudSense collaborated with TM Forum to explore the fundamentals of setting up a digital marketplace, and in particular how to integrate one into an omnichannel customer experience.
But now we want to explore how to make them work.
There are four key building blocks for successful marketplaces; 1. Business, 2. Technology, 3. Processes and 4. Partner Ecosystem, with specific focus areas that contribute to its success.
Right from the start, marketplaces need to be able to support a wide range of business models, enable curation of new digital service offerings by integrating multiple services from different partners, provide a rich set of tools and processes that enable transparency and flexibility, and facilitate partners selling to customers independently or jointly.
Marketplaces also need to be centered around collaboration. While there will be different levels of collaboration depending on marketplace maturity, this collaboration model allows a seller to:
- Directly sell products to customers
- Collaborate with other partners and sell E2E product and services with partners
- Leverage services available from other partners or from marketplace providers - such as dispatch services or billing and payment gateways, insights available to cross-sell and upsell, and personalized offerings to customers on a marketplace
Business models, monetization models and collaboration models are aimed to provide desired flexibility and ease of doing business for the success of all involved parties in a marketplace.
One of the critical success criteria for a marketplace is the ability of marketplace platforms to cater to the significant technical customer demands, in order to meet the desired customer experience, and facilitate partners and product onboarding and collaboration across multiple parties with complete transparency.
- Allow customers to easily complete transactions with multiple partners/vendors seamlessly with no disruption in customer experience
- Allow partners to easily integrate with the marketplace for product onboarding, product updates, modifications, fulfillment journey, invoicing and settlement
- Provide customer-centric experience rather than a product- or partner-centric one
- Ensure data privacy and security is non-negotiable
A marketplace should offer transparency on billing and settlement between marketplace owners and partners, as well as between partners. A recent PWC report found a 60% increase in the number of companies investing in an omni-channel experience, meaning that marketplaces also need to be equipped with technology that facilitates an omni-channel experience, ensures data security and privacy, and handles a high volume of transactions with better performance. Having the right technology is key for a flexible customer centric marketplace.
When all of this is done effectively, you create a unified commerce solution, consolidating your customer buying experience, partner experience, order management, product catalog management and customer service.
Processes play an important role in successful marketplaces, where robust and seamless operations need to be set up at the start in the areas of sales efficiency, contract management, marketing, partner and product onboarding, and customer support services.
These marketplace processes need to strike the right balance of sufficient checks and control to manage what is being made available on the marketplace and how it is being sold, as well as flexibility to enable easy multi-party collaborations. These processes can be matured and refined over a period of time and can be customized based on needs. Some processes like information security and data sharing will need the highest level of maturity from the beginning, however some of the other processes can vary from partner to partner, e.g. processes to change prices, processes to modify product specs etc.
4. Partner Ecosystem
Creating a marketplace, especially a successful one, is not easy. Nevertheless, with the right strategic partner there is a pot of gold at the end of the rainbow. It’s essential for marketplaces to attract partners that have consulting and advisory services with a broad capability set.
There has to be a give and take in any partnership. Marketplaces - while they need capabilities from partners - must also offer advantages and opportunities for potential partners such as:
- Increased customer reach
- Capex/Opex saving with the pre-established platform
- 360-degree dashboard view of products sold and customer orders
- Ease to do business with other partners in terms of selling products together
In order for marketplaces to reach their full potential, partners are a necessity, with research indicating that the most successful marketplaces have 40 partners on average.
Marketplaces must foster and facilitate easy and quick onboarding of partners that can unlock new opportunities, with the help of well-established supply chain management. Success of marketplaces depends on the flexibility and scalability to bring in new partners from a wide range of industries.
With the foundations of a marketplace outlined and set, marketplaces are in a position where they not only hold an endless array of opportunities, but are on their way to gaining momentum, customer adoption and growth, fast.
Stay tuned for our next guest article from Shri where we’ll be following up what it takes to stay on top in the marketplace environment.