Collaborative value creation in digital ecosystems: Success factors using the example of a blockchain-based tokenization platform
Nearly all companies today operate in ecosystems. Traditional business networks are giving way to this new value creation model, in which multiple organizations collaborate to more effectively meet the needs of customers. This shift to ecosystem-based value creation requires efficient coordination and the use of technology. One innovative enabler for establishing digital ecosystems in this regard is blockchain. But what skills does it take to participate as an actor in these new platforms?
In this article, we will take a closer look at these platforms using an existing example and derive initial findings for success factors in shared value creation. The results are based on a research study, which was lead-managed in collaboration with the University of Bern. For this purpose, a case study was conducted on a Swiss blockchain-based platform in the financial services sector. From the organizational perspective, new capabilities could already be identified, which must be considered in a differentiated manner across the development stages of the ecosystem.
Blockchain as an enabler of digital ecosystems
Gone are the days when a single company could satisfy all customer needs. Ecosystems have emerged as dynamic networks of interconnected companies, such as manufacturers, software vendors, and banks, working together to create value. These ecosystems require efficient coordination among participants. To manage this complexity, companies are turning to new technologies such as blockchain to enable seamless collaboration and improve value creation.
Blockchain technology, also known as distributed ledger technology (DLT), enables the operation of distributed databases (i.e., distributed ledgers) that are organized in a decentralized manner [1]. On this basis, services can be mapped to distributed ledgers, e.g., to record transactions between actors (e.g., companies) and to trigger associated processes in an automated manner through formalized business logics (i.e., smart contracts). DLT systems can host multiple software applications that can be used by any member of the system. For detailed reference, we have already provided a basic description of how blockchain technology works in a previous blog post.
This decentralized approach not only enables secure data exchange in ecosystems, but also common process models for collaborative value creation. Building on this concept, the integration of blockchain technology creates a new paradigm: actors can be brought together and grouped around a digital platform.
The relevance of organizational skills increases
In this environment, there is a need for new capabilities for the participating actors. Using blockchain to facilitate efficient value co-creation presents not only technical challenges, but also structural hurdles [2]. Co-creation of services requires a shared vision among all participants, while operationalization of value creation depends on effective processes and proper provisioning of resources [3]. In the context of financial services, special skills may be required, especially due to the highly regulated nature of markets such as the Swiss financial market, where proactive engagement with regulators is essential for the introduction of new services.
In recent years, the intangible resources of companies, such as their capabilities, skills and knowledge, have become increasingly important. There are two main perspectives when looking at companies: the knowledge-based perspective and the resource-based perspective. The knowledge-based perspective assumes that a company’s capabilities, i.e., its ability to effectively design, implement, and use its resources to achieve its goals, give it a competitive advantage. In the information systems field, there are differing views on how IT contributes to a company’s capabilities. Some see IT as a valuable resource, but also emphasize the critical role of employees in using IT effectively.
Recent studies have examined how companies can develop capabilities and collaborate within digital platform ecosystems to create shared value. These capabilities include the ability to innovate, orchestrate, collaborate on sales, and create a shared vision. Figure 1 provides an example overview of organizational capabilities from research by Schreieck et al. (2021, p. 369).
| Resource | Organizational Capabilities | Description |
| Human | IS Technical Skills | The ability of a company to use the current knowledge of its employees in terms of hardware and software. |
| Technology | IS Infrastructure | A company’s ability to mobilise and deploy IT resources, including hardware, software and network technologies, in combination with other resources and capabilities |
| IS Development | A company’s ability to implement solutions based on new technologies, combined with alertness to innovations and trends | |
| IS Planning & Change Management | The ability of a company to anticipate technological changes and plan the deployment of IS accordingly | |
| Relationship | Structural IT Governance | A company’s ability to align “business and IT management (decision-making) functions” and enable exchange between them |
| Process IT Governance | A company’s ability to “formalise and institutionalise strategic IT decision-making”. | |
| Relational IT Governance | The ability of a company to “coordinate competencies and combine knowledge across company boundaries”. | |
| Digital Business Innovation | The ability of ecosystem participants to organize and coordinate to jointly explore new avenues for innovation supported by IT. |
Case study: collaborative value creation on a blockchain-based tokenization platform
An overview for technology deployment and related relevant capabilities has not yet been identified in research. As the central object of investigation, we aim to provide this integrative perspective on capabilities in the use of Blockchain in ecosystems. With this in mind, we extend Schreieck et al.’s (2021) original understanding of organizational capabilities to include blockchain. To provide real-world insight into the required capabilities, we address a concrete case study that addresses collaborative value creation on a Blockchain-based tokenization platform. For illustrative purposes, the names of the actors have been simplified.
In this context, the bank and Token Venture have developed a blockchain-based platform in collaboration with other partners. It enables the tokenization of securities of Swiss SMEs for new process improvements (e.g., instant settlement, automated shareholder register management) and new market potentials in the issuance, transfer and storage of digital assets. With over 1,200 employees, the bank is one of the largest banks in Switzerland and has been in existence for more than 150 years. In addition to its banking services, it operates a trading platform as a market leader for unlisted securities. Token Venture was founded in 2018 and currently employs more than ten people. They operate their own tokenization platform and offer services for the digitization of shares of Swiss SMEs, which facilitates processes (e.g., capital increases) and makes them more efficient.
The bank’s platform is based on a “Public Permissionless Blockchain”[1]. Together with a banking software provider, the custody of the corresponding cryptographic keys is ensured via another specialized solution provider. Furthermore, all modules are technically integrated via an open architecture and comply with existing regulatory standards. The platform was initiated and developed by Innovation Venture. The first proof-of-concept was developed by Innovation Venture, after which the platform was made productive available to the bank. The legal framework for tokenizing shares was developed in collaboration with various legal experts. Figure 2 provides a schematic overview of the digital ecosystem. The use of the blockchain is expected to bring significant efficiency gains and the potential to further automate subsequent business processes (e.g., payment of dividends).
Creating a shared vision and orchestration as essential factors for building ecosystems
The initial findings suggest that organizational capabilities are an important factor in the emergence of the digital asset ecosystem. On the one hand, the technical capabilities of the partners were of particular importance in the design of the platform. The basic technological components were already in place, such as the bank’s trading system, and it was possible to draw on existing partnerships for development. However, specific components related to blockchain had to be fundamentally redeveloped.
For collaborative value creation, the ability to develop new business innovations and introduce them into existing governance structures and processes seemed particularly important. In particular, the novelty of the technology and the new regulatory framework created areas of tension. In our initial analysis, we found that different organizational capabilities were required at different points in the developments. The initiators of the study would like to examine this temporal aspect in more detail in further case studies.
This shows that the ability to share knowledge in an ecosystem and to build it together plays a key role in its success. Stakeholders have knowledge in different areas (regulation, technology, and financial services). Stakeholders invested in knowledge sharing so as to create a common knowledge base and understanding.
The observations also illustrate the importance of creating a shared vision. This was typically understood as an isolated concept defined by the platform operator. However, in the case of the ecosystem studied, the vision was collectively designed and shaped by the various stakeholders. This collective shaping of the vision was deliberately chosen to strengthen the commitment of the different organizations to the common endeavor.
A final and essential factor is also the orchestration of the ecosystem. The governance of the ecosystem was not centrally managed by one actor, as is the case in other platform ecosystems [4], but by several actors together (bank and token venture). The ability to institutionalize this structure was a critical factor in the emergence of the platform.
Best practices have yet to become established
The findings to date show that organizational capabilities play an important role in the emergence and success of ecosystems. Especially in the different development stages of an ecosystem, such as setup or operation, the different capabilities become necessary in a differentiating manner. In this regard, blockchain is proving to be an alternative IT paradigm for building ecosystems. By adopting these capabilities as best practices, companies will be able to manage complexity and open up new ways of creating value in the future.
Sources:
[1] Kannengießer, N., Lins, S., Dehling, T., & Sunyaev, A. (2020). Trade-offs between distributed ledger technology characteristics. ACM Computing Surveys, 53(2), 1-37. https://doi.org/10.1145/3379463 [2] Spohrer, K., & Risius, M. (2022). The affordances of blockchain platforms: why service providers use blockchains. In J. Dibbern, J. Förderer, T. Kude, F. Rothlauf, & K. Spohrer (Eds.), Digitalization Across Organizational Levels. Springer. [3] Valkokari, K. (2015). Business, Innovation, and KnowledgeEcosystems: How They Differ and How to Survive and Thrive within Them. Technol. Innov. Manag. Rev, 5(8), 17-24. [4] Schreieck, M., Wiesche, M., & Krcmar, H. (2021). Capabilities for value co-creation and value capture in emergent platform ecosystems: A longitudinal case study of SAP’s cloud platform. J. Inf. Technol, 36(4), 365-390.