Platform Economics in Mechanical Engineering
The platform economy will ring in a new age in mechanical engineering, just as it has in the B2C sector. In the future, the added value provided via digital services and business models will be a key element in helping mechanical engineering companies stand out. A position in the platform economy must therefore be a crucial part of any mechanical and plant engineering company.
The success of platforms – an example for mechanical engineering to follow?
Platform companies such as Amazon and Google have changed many B2C markets from the ground up. As they now penetrate the B2B segment, German engineering companies too are joining the fray. Though the corresponding ecosystem is still a work in progress, the trend is clear: In the industrial environment too, platform-based applications are becoming the key factor of differentiation.
That, however, confronts the corporate sector – especially small and medium-sized enterprises (SMEs) – with huge challenges. Further barriers to entry are raised by the complexity and diversity of the platforms currently available and the question marks that still hang over business cases, not to mention the need to acquire completely different knowledge and skill sets compared to the industry's traditional core business.
Study offers insight
For the study “Platform Economics in Mechanical Engineering: Challenges – opportunities – courses of action”, Germany's Mechanical Engineering Industry Association VDMA, trade fair operator Deutsche Messe and Roland Berger investigated the platform economy in the German mechanical and plant engineering sector. The 15 VDMA members that took part in a series of workshops and discussions include firms of all sizes and at every link in the value chain – from midcaps to blue chips, from traditional mechanical and plant engineering companies to providers of factory automation and software solutions. At the time of the study, all these companies had already gained relevant experience with platforms – building them, using them or engaging in early-stage operation – and each was therefore able to contribute varying perspectives. The workshops focused primarily on the companies' platform applications, bringing together and analyzing crucial experience accumulated "by practitioners for practitioners" in order to learn new insights and develop recommendations on how to get the most out of platforms.
Building on the questions discussed and the outcomes arrived at by the group, this study addresses the following aspects:
- What are digital and IoT platforms, and what does the platform landscape of relevance to mechanical engineering look like?
- What new business models and models for success are there?
- How can companies position themselves successfully in the platform economy?
- What obstacles and challenges should be expected?
- What criteria should be applied when choosing a platform?
- And just as importantly: How will the platform economy continue to evolve going forward?
The study you are reading is the first comprehensive analysis of the structures of platform-based business models in the B2B segment in general and mechanical and plant engineering in particular. As well as making it easy to understand the role played by the platform economy in mechanical engineering, it also provides valuable guidance for business decisions.
Whitepaper "Platform Economics": Focus on Digital Services and Spare Parts Procurement
The more complex and customer-specific the product and service offering is, the later it will be able to be mapped in terms of platform economy. This circumstance offers the industry the opportunity to enter the platform economy with dynamic business areas. At the same time, valuable experience can be gained to effectively and sustainably secure and expand profitable market segments. For the majority of companies in our industry, it is hardly an option to become platform providers themselves. Rather, it is important to recognize which platforms should be used and how to move in a world in which various platforms may have to be addressed that are incompatible with each other.
The VDMA has now published a whitepaper that is intended to give companies an orientation on how to place their products and services individually and successfully with their customers via platforms in the future. You can order the white paper "Platform Economics: Digital Services and Spare Parts Procurement" from Biljana Gabric.