Business Trends Report: Deloitte's Eamonn Kelly on 'Business Ecosystems'

Kelly: Probably one of the longest standing trends in the business world has been the movement away from massive, fully vertically integrated corporations that own all the assets required for the value creation system they're playing in and the movement towards a more relationship-based system of different organizations that's been enabled through things like outsourcing and supply chain. If you look back to the earlier days of the industrial economy it wouldn't be surprising to see a large automaker who literally owns the sand pits to make the glass to manufacture the windows to put in the cars. For many decades through virtualization of organizations and outsourcing and companies concentrating on their own core competencies, we're seeing a development of a much more fluid set of relationship-based value creation systems that cut across different firms.

Consulting: What are some of the things enabling it?

Kelly: We're in this sort of punctuation point where there's this ability to collaborate and compete and change together and evolve, but what's really enabling it first is this specialization of talent and the different abilities. What we've learned over the last 35-40 years is that it's much more efficient for organizations to concentrate on what they're best at and to work together as opposed to one organization controlling everything required for its value creation. Digitization of the economy and far greater levels of connectivity are hugely enabling this. It's not just the ability to connect, it's the tools of collaboration that are constantly improving, the ability to slice and dice work and projects into small chunks that can be put out to people who are best at doing them. What we've got is this technological capability that's underpinning what we already know is a much more efficient way of organizing the economy.

Consulting: Talk a bit about the "sharing economy." 

Kelly: What we're seeing is spare capacity with people's biggest, most expensive assets like their cars and houses, which candidly are kind of underutilized. These are basically underutilized assets in the economy, and the sharing economy is making them productive. That wasn't possible 20 or even 10 years ago, it's the level of connectivity, the tools of connection and the standards people put into these platforms that make this possible. I think this will expand, moving into areas like barter becoming more common, we'll see other assets being shared more as well. This is a pretty profound shift that's occurring.

What this enables is much more fluid relationships and less need for everybody to own everything, and more opportunities to collaborate. The cloud makes it possible for smaller players to have access to sophisticated technology and software they don't need to own. Creating this fluidity is like a lubricant; it's like oil in the engine that makes things much easier to come together. It blurs the boundaries that define the industrial economy. One of them is what small firms and large firms can do. Small players can have much more reach than they used to have and things like the cloud are massive enablers of that.

Consulting: What's an example of how this ecosystem economy will be beneficial?

Kelly: Ecosystems let us do things together that no individual organization can do alone. If you look at food safety for example, it's fascinating to see companies and producers and processors and distributors and retailers compete with each other in the markets, but also collaborating with each other, with NGOs, with food scientists with technologists and governments to identify best practices and share protocols. Essentially they're recognizing that food safety is not a competitive advantage, it's something you collaborate around and then you can compete in areas like quality, taste, convenience and brand power. Around things like food safety, nobody can do that themselves, but in collaboration with these new technologies of connectivity it's possible to massively enhance food safety for everybody's benefit. And it benefits all the players in the industry too.

Consulting: What are the consulting opportunities you anticipate rising from this?

Kelly: Consulting firms will always be working for individual companies as well as ecosystems, so I wouldn't say this changes everything, that's not my positioning in this. Consulting firms have always been very good at having knowledge of industries and sectors. I think they now have to understand the crosscutting dimensions of that. It's certainly an area we've been looking at. Ecosystems cut across those industries and sectors and they're creating new opportunities. The ecosystems themselves need convening and enablement and servicing and facilitation, and I think they're going to be opportunities for consultants to add value to that process as honest brokers and experts.