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The ecosystem playbook is an exciting catalyst project featuring Saudi Telecom as project champion along with such digital leaders as IBM, CSG, ZIRA, TCS and Tr3dent participating.

Continue reading the online version below. If you’d like a PDF copy, click on the image above to download.

This guide helps product managers, business architects and marketers build business capability models for ecosystem participants. CSPs and partners can use this guide to evaluate business models, architect technology, and estimate effort to achieve ambitions.

Before we start, some essential definitions…

This guide uses ‘ecosystems’, ‘opportunities’ and ‘capabilities’ in a specific context. 

Business ecosystems are formed when participants generate value by interacting with each other. These interactions can be captured and represented as ecosystem maps. Business architects use these maps to assess if an opportunity exists to participate as a CSP.

The purpose of an ecosystem map is to uncover available opportunities

Opportunities are derived from an ecosystem map based on current and future relationships between players in the ecosystem. 

To make good on these opportunities, we almost always require new capabilities.

Business Capabilities are well defined set of assets and attributes that an organization must possess in order to fulfil the promise of an opportunity. These attributes may include capability dimensions such as people, process, information or technology.

Why is this playbook needed?

Business architects and product managers at CSPs are always exploring new business models. Possible approaches include vertical integration and strategic partnerships to address new markets for services.
 
Increasingly however, an outside in approach is needed for CSPs to explore participation in ecosystems where a number of stakeholders engage in value creation for the benefit of all participants. 

And it is inside these ecosystems that dynamic relationships create opportunities that cannot be addressed via linear partnerships. 

Some factors that bring on the need for ecosystems approach to markets include;

Customer needs are too broad to serve alone by service providers
Time to market is essential as many markets are ‘winner takes all‘
Specialization and collaboration is less risky in digital markets as compared to vertical integration or linear partnerships

Gravitating towards ecosystems is not easy for CSPs or their partners as they have together been evolving in a hub and spoke mode of doing things.
 
Ecosystems are open and discretionary
Ecosystems present a more fluid act of value creation – constantly changing based on market needs. Participants are not necessarily suppliers but rather act as individual participants, there to fulfil a purpose, at will.

Many times ecosystems act as their own governance entities, allowing participants to self regulate and play by the rules.

Ecosystems serve broader customer needs
Ecosystems address variability in products and services by specializing across a number of participants who deliver value to end consumers.

Today’s products and services evolve constantly in scope. They don’t stick to scope limitations.

The dynamic product portfolios are constantly experimented on to validate market proof. Add to this monetizing challenges, efficiency to address reach and uncertain demand and you have a perfect storm ushering in ecosystems. 

Ecosystem participants in collaboration with each other and with a net benefit to all, serve these broad, dynamic needs without restrictive short term partnerships.

Ecosystems address time to market
Whether its first mover advantage or getting the timing right to scale in ‘winner take all’ plays, time to market can be a driver for ecosystems approach to market making. 

Ecosystems are essential levers for B2B2X business models
Two sided marketplaces are quintessential ecosystem plays. However many more business models like pureplay b2b and b2c can also benefit from ecosystem approaches. 

Delivering value in today’s markets is an act of orchestration. 

In 5G era, success for CSPs in most markets will depend on partner participation. Many of these business models will evolve inside ecosystems as opposed to linear relationships.

This playbook helps with tools to understand ecosystems at work. In it we propose steps that a product manager, marketer or a business architect may take to evaluate an opportunity. It then provides a stepwise approach to sharing results for useful action.


When to use this playbook?

If successful, this playbook will help anyone interested in understanding a business ecosystem for possible opportunities. It will also help translate these opportunities into organizational capabilities. 

  • CSPs looking to venture into new business models can use this playbook to quickly build a repository of business capabilities they need to invest in. 
  • Partners can collaboratively assess their own capabilities for participation in an ecosystem with CSPs.
  • Individuals looking to improve their business modelling skills can practice with this playbook and put out deliverables that add value to their organizations.


What this playbook is not

Like many frameworks, this playbook aims to garner appreciation for ‘ecosystems thinking’ within CSP organizations.
 
We believe a change in mindset begins when practitioners adapt to a changing outlook of their industry. 

And ‘ecosystems thinking’ is the need of the hour as CSPs embark upon an era of partner collaboration.

This playbook speaks to ‘ecosystems thinking’ within CSP organizations. Its target is not the telecom industry. Instead it calls on practitioners within CSP organizations; these are business architects, strategy teams and product managers.
 
The playbook provides CSP teams with tools to achieve better results designing for ecosystems instead of always looking inwards at CSP’s telco business models for success. 

Put another way, this playbook is not a defacto guide to enterprise architecture but a methodology to get better ecosystem outcomes and faster.

Also this playbook does not aim to be a method of creating better products or services. Nor is it a recipe for procuring partner services more efficiently albeit it may help achieve both of those outcomes.

In the end, this playbook is not a replacement of alternate tools and methods for making TM Forum standards more pervasive within the industry to accelerate digital transformation. 


Playbook Structure

The playbook is divided into three phases, each consisting of three steps each.

  1. Visualize ecosystem deals with a high level examination of the opportunity
    1. STEP 1: Draw current relationships
    2. STEP 2: Draw constraints & moves
    3. STEP 3: Draw opportunity scenario
  2. Model opportunity is about testing the ‘value hypotheses’ of the opportunity
    1. STEP 4: Define value proposition for participants
    2. STEP 5: Assess ecosystem growth potential
    3. STEP 6: Select key value streams
  3. Identify capabilities provides a list of essential capabilities needed for addressing the opportunity
    1. STEP 7: Map capabilities to Value streams
    2. STEP 8: Extract Epics & features
    3. STEP 9: Update capabilities portfolio

We discuss steps 1-3 in chapter one, followed by 4-6 in chapter two and steps 7 through 9 in chapter three.

CHAPTER 1 – VISUALIZE ECOSYSTEM

Whether an inquiry into new line of business or to address a pressing pain point, sizing up an ecosystem opportunity requires an understanding of its structure.

  1. Why are we seeking an opportunity in this space?
  2. Who are the major players with impact in this space?
  3. How do they interact and what business models exist?
  4. Are there constraints for new entrants that impact our assessment?
  5. Could we create new relationships or alter existing ones?

This leads to our first step in the playbook; drawing up a map of the ecosystem.

Step 1 of 9 – Draw current relationships

The first step in visually describing a business ecosystem is to define stakeholders currently active in it. But before even this, start with a label for your ecosystem. 

A good label helps define what the ecosystem visualization boundaries should be. 

A good approach is to not use domain, or an industry label as it risks increasing scope of your inquiry. It’s best if its a specific area of business interest for the CSP – potentially an entire market segment, a product or service category or even as specific as a process area.

Once you have a label, start by identifying current stakeholders involved. What are their roles?

  1. Orchestrators drive the ecosystem and act as middleman e.g Uber, Google, CSPs
  2. Producers are the original creators of equipment/content/products (e.g. Toyota)
  3. Enablers are facilitators for both producers and orchestrators (distributors, catalysts without whom the relationships won’t work)
  4. Actors are customers, buyers who consume what is produced
  5. Entities are any objects that have a relationship with stakeholders 1 through 4. 

We also use enablers as a term for internal infrastructure like systems, processes, and assets within CSPs. For example CRMs, Partner onboarding policy, HR guides.

These enablers can be used interchangeably together with the defined set of external enablers like suppliers, distributors etc. 


To understand the relationships between key stakeholders, we must identify their roles. This is the first essential step in describing an ecosystem.

Start by describing the relationship between each of the stakeholders. 

Relationships can be one of the following  

  1. Owner relationship (buy, sell, distribute)
  2. Qualifying relationship (holds, can, is)
  3. Defining relationship (known as, meant to, does)

Using stakeholders and relationships, draw as many known contexts within the ecosystem as you can using available information. 

It is important to keep a high level view of the ecosystem at this stage. Going too deep can narrow focus and obfuscate competing patterns inside the ecosystem.

Our goal is to understand opportunities not build a directory of all possible outcomes in an ecosystem.

Let your partners and team members help you iterate a few times before everyone involved feels comfortable with the fidelity of the map in explaining the current scenario.

How can you tell a linear partnerships apart from an ecosystem?
In working with ecosystem stakeholders if a CSP is the orchestrator and if

  1. CSPs act as distributors for partner offers or inputs, it’s more of a partnership and not an ecosystem
  2. CSPs offer partner inputs as standalone and bundled services, it’s more of a partnership, not an ecosystem
  3. CSPs offer tools to customers to use inputs from partners or to increase value of CSP service through actively engaging with partner services, is more of an ecosystem.

Establishing a partnership apart from an ecosystem helps you differentiate the benefits ecosystems bring in the form of synergy and value creation. These differences help identify possibilities of new business models beyond reach with simple partner collaborations.


Step 2 of 9 – Draw constraints and moves

Once stakeholders and current relationships are in place, it might be worthwhile to identity patterns in the ecosystem that emerge from constraints or possible competitor or upcoming/expected stakeholder moves.

Ask the following questions. Describe answers visually on the ecosystem map?

  1. Are there stakeholder moves you’ve heard of about to take place affecting existing relationships? Will these alter existing relationships? Try drawing these in.
  2. What are barriers to entry for stakeholders?
  3. Are their quotas, price ceilings, or other qualifying criteria?
  4. Are their regulatory constraints in place?

Insert the rhombus notation in existing relationships to identify constraints. Use number labels on each rhombus so you can paste comments within your map to explain these patterns. 

Understanding ecosystem strategy and nature of relationships
Once you’ve drawn out the various plays, an ecosystem map is a good place to ask some questions related to its characteristics.

Q1 – Is this an open or a closed ecosystem where orchestrators determine participation? This can impact competition, scale and efficiency.

Q2 – Does the orchestrator monitor participant activity based on rules it can impose? For example Google or M-Pesa can define how you play in advertising or ecommerce transaction respectively within their ecosystems

Q3 – Does everyone benefit? Can CSP be an orchestrator or will it have to be an enabler?

Q4 – Can new participants freely challenge/upend existing capabilities and capacity? This can determine the defensibility of the ecosystem.

Step 3 of 9 – Draw opportunity scenario

We are all but done with building the ecosystem map. By now stakeholders and relationships are in place and constraints, if any have been inserted.  

This is when you check for key contexts like business model nuances and service exchanges to be visible on your map.

When you are happy with your map, close it with one of the two possible options;

  1. Draw a hypothetical scenario on your map that illustrates the opportunity you believe exists for the CSP…or
  2. Identify sections on the map that represent a potential opportunity for the CSP. 


Place a hover over the area of interest on the map as a placeholder for future reference and label the opportunity for use in the next step.

Using the ‘opportunity hover’ helps you label your opportunity which comes handy at the start of your next phase when you start with building a model for this opportunity. 


For the opportunity being considered, consult with your partners to validate the map and gain internal alignment. Follow up with a simple story that describes this opportunity.

Chapter 2 – Model Opportunity

In chapter one, we developed an ecosystem map and captured opportunities by either identifying them within existing relationships or by adding new ones onto the map.

In this chapter, we will break the selected opportunity down into value streams for use in the third and final phase. 

We start with the opportunity captured during ecosystem visualization (step 3) and plug into ‘ecosystem opportunity canvas’ to identify our value streams.

Ecosystem Opportunity Canvas is a toolkit inspired by Osterwalder business model Canvas. It aligns the ecosystem opportunity with value proposition for each participant and with three key growth modeling frameworks – acquisition, retention and monetization. 

Ecosystems are driven by these three self propelling growth loops which act as blueprints for its success. Opportunity Canvas captures these loops as value streams. 


Step 4 of 9 – Define value proposition for participants 

In the first step after listing down the opportunity, define what the ecosystem means to each participant.
 
For each stakeholder segment, the opportunity must spell out a clear value proposition.

Ecosystems exist to benefit everyone contributing to its existence. Ensure that the ecosystem you want to participate in has the best interest of its participants in mind.

The process for identifying value proposition for each participant is not simple. However it’s advisable to keep things at a high level and spell out what’s in it for everyone.


Step 5 of 9 – Assess ecosystem growth potential 

There are many possible ways of evaluating an opportunity.

With opportunity canvas, we go for an evaluation based on growth potential of the solution being proposed.

This entails three growth frameworks.

  1. Market Product Fit (Retention)
  2. Product Channel Fit (Acquisition)
  3. Channel Model Fit (Monetization)

With these models we frame retention, acquisition and monetization potential of the opportunity. This leads to better judgement on whether to opt for the ecosystem opportunity or pass up on it. 

Use these models to study the business case and operational impact of the solution.

Growth models simplify selection of value streams for identifying opportunities as they cover the entire organizational context from commercial to technological and operational concerns.

Let’s start with market product fit. 

Demonstrate that there is evidence of demand for the solution in the market – enough to offset churn. The value proposition you put forward is addressing a current need and together with partners, you can meet this stakeholders’ need and evolve as the need changes. 

Here are the questions that help you construct the market product fit. The first three are inherent in your canvas. 

  1. Will the participants provide expected value to each other and customers?
  2. If not, what needs to happen to make sure customer expectations will be met?
  3. How is the value proposition changing going forward?
  4. Is there stickiness in the solution proposed?
  5. Can adjacent prospects (not onboarded first) be sold to with improved value to them?


Next we perform the product channel fit. 

Here we are tasked with assessing the acquisition potential of the proposed channels. Is there a single dominant channel available to onboard customers at scale? Is cost of acquisition suitable relevant to the ARPU expected? 

CAC = (customer acquisition costs)
ARPU = (annual revenue per unit)

Here is a list of questions to answer

  1. Is the value proposition broad or narrow? (size and attractiveness)
  2. What about transaction size, cost? 
  3. Is time to value short or long?
  4. Compared to the cost of acquisition, how well does the ARPU stack up and which channels can we prioritize for this mix?

The first four questions are there to help you select a channel strategy suited for your solution with regards to the cost of the channel.

You can use these steps to develop a high level estimate of costs required to build a quick business case.

Next three questions help you select digital and traditional channels based on their suitability.

  1. Do network effects come into play?
  2. Which channel; free, low cost, or high contact (p2p sales) suitable?
  3. Can a single channel be prioritized? 

Remember you can devise a solution to fit a channel and not the other way around. 
With product channel fit, you have an assessment of the costs of acquisition adjusted for time and scale.


In the third step, we perform the channel model fit 

Here we are concerned with monetization. Do we plan to monetize this opportunity? if so, what kind of unit economics exist for us to understand and set up? 

Monetization is challenging as it impacts operations. It impacts stakeholders across a CSP organization as well as its partners within the ecosystem.

Monetization concerns pricing, competitive strategy, marketing, sales, customer care and more.

The questions to answer to fill this part of the canvas

  1. Is this a big enough market for all of the partners?
  2. How will we charge customers or monetize the solution (if at all)? 
  3. What is the unit economics (revenues/costs) for the solution? 

This clarifies cost benefit for the solution using channels as proxy. Use the approximations from your analysis to construct a high level business case if required. 

A clear strategy together with partners on how monetization will work is crucial. Other times, monetization is not even considered. Perform assessment with care as it can impact success significantly.


Your solution must pass through the test of these three models to be able to provide a go ahead to the next stage of our analysis.

The growth models on the one side help with a go ahead from attractiveness aspect of the solution while helping you assess operational requirements.

This leads us to constructing a set of value streams to pick the organizational capabilities required.

Step 6 of 9 – Pick key value streams

Although value streams are the currency for mapping opportunity with capabilities. We loosely adapt them for simplicity sakes.

We use growth loops – acquisition, retention and monetization loops that impact the canvas assumptions and which act as proper proxy for value streams. 

This makes the process rigorous and founded in growth ambition of the ecosystem.  

Growth loops are self propelling loops that allow for acquisition and retention of customers within the ecosystem. The value proposition exists to make it happen. Monetization loops support the acquisition/retention loops align customer expectations.

A list of various growth loops is published separately. Check out references at the end for the details. These are adapted from ecosystems that demonstrate compounded growth over linear growth compared with partnership based systems.


Growth loops are a new concept. If you prefer to use value streams in a classical way, we can recommend using the following method to assign and prioritize these for the mapping exercise.

To pick a few key value streams from many possible journeys, use the following three categories to narrow down the selection;

  1. Customer journeys 
  2. Partner journeys
  3. Operations journeys

The idea is simple. What key journeys do we need to look at in order to achieve operational and organizational alignment needed for this solution?

And this requires that we pick carefully from a list of journeys. Instead of drowning into too many possible options, select a few key journeys that the solution will bring about that never existed before or will be altered from the current state of the journeys.


This concludes phase two of our playbook.

By now, we have isolated an opportunity, its growth potential is clear to us and we can use data points to assess business viability. 

We have also arrived at a set of value streams that represent the value exchanges required in the future if we are to adapt this solution for the ecosystem opportunity. 

Highlight: What are value streams? How can we use growth loops to generate useful value streams?

Value Streams are usually derived from across the operating model. This leads to abstraction problems resulting in vague guidelines as to what they are and what they are not.

Across various journeys that stakeholders embark upon, value streams describe how value is exchanged in these journeys. Value streams typically contain 4-6 value stages allowing us to understand the unique circumstances of value creation in these journeys. 

How value streams lead to actionable results?

Value streams are built from business scenarios using customer, partner or employee journeys making them rigorous and flexible. Value streams string together value generated at various stages of the journey known as value stages.


This allows drilling down to the source of value creation to see if we have the capabilities to create value at each stage and if not, what may be needed.
Once we have mapped capabilities to each value stage in a value stream, it is possible to define feature stories that make up these capabilities. This inventory of features can help prioritize an organization’s investment portfolio for acquiring these capabilities.


How to convert growth loops into value streams?

Using growth loops have two distinct benefits over traditional value stream selection.
First, growth loops depict the growth posture and methodology of the ecosystem. Second a finite list of loops makes the process faster. An additional plus is the comprehensive capture of value across the essential elements of the ecosystem. 
Once loops are selected from the lists and modified as required, they can be easily turned into a value stream using the various stages in the loop as value stages in a value stream.

Once we have mapped capabilities to each value stage in a value stream, it is possible to define feature stories that make up these capabilities. This inventory of features can help prioritize an organization’s investment portfolio for acquiring these capabilities.


Chapter 3 – Identify Capabilities

In chapter 2, we went through a series of modeling exercises to arrive at the key value streams to consider for our ecosystem opportunity.

In this, the final chapter of our playbook, we will go through steps 7 through 9 and build a repository of required capabilities to address our proposed solution.


Step 7 of 9 – Map capabilities to value streams

Having decided on which key value streams to consider for assessing required capabilities, the first step is to appropriately label the value stream and its various stages. 


To do this, break up the value stream into 4-6 value stages using a journey as proxy and ensuring distinct value is generated in each value stage. Make sure the value generated is from the perspective of a single stakeholder. 

Sometimes, you are looking to use the same value stream from a point of view of more than one stakeholders. In this case, label value streams and value stages differently for each stakeholder iteration. Do not define the same value stream from multiple stakeholder perspectives.

Once value stages are well defined, use TM Forum Capabilities framework  to map Level 2 capabilities to each value stage. Using a generic fit at this stage is ok. To be more specific, jump to level 3 capabilities and map these out. This will narrow down the focus of the capabilities required in line with the value stages. 

Alternatively use growth loops to define value stages followed by an assessment of the key tasks required from the value stages to be achieved.  These tasks can be grouped together to form L2 and L3 capabilities. 


Step 8 of 9 – Extract EPICs and Features

TM Forum level 3 capabilities provide good starting point to map specific capabilities to each value stages. However this may not be enough to understand the context of the capabilities required. 

The lowest level capabilities need to be further broken down in order to understand exactly what is required to meet the value stage goals.

This is where you can use a hierarchy of breakdown of a level 3 or lower capability.

By treating the L3 capability as an Epic and using various dimensions of this epic to define the features required, you can define the details for business architects.


Use feature stories to describe the L3 capability in terms of people, process, technology or information. Label the feature and use these as inventories in the next steps.

A simple structure for feature stories is required for example; As a <stakeholder> I need <feature outcome>

Now list each L3 capability/EPIC and corresponding features with their feature stories in a table and map them to possible enablers within your organization.


Enablers are platforms that could include large technical systems like the network, IN, billing systems etc or organizational assets and standards such as project management frameworks or customer policies. 

Going from a L3/4 capability (Epics) to features and then to enablers works as iterations towards your intentional architecture. Incremental build up of low level capabilities is the only continuous method of updating our capabilities targeted at specific opportunities.

Step 9 of 9 – Update capability portfolio


Regardless of CSP’s workflow for agile delivery, a portfolio kanban gives a good view into collaborative capabilities development. 

A kanban can have various stages depending upon the framework used and CSP’s preference. Business and tech teams can work together to prioritize features using the portfolio kanban. 


These features present a view of the organization’s existing capabilities and its planned updates.

Also, ability to see how new capabilities manifest with existing enablers (platforms and standards) is very useful. 

Even more useful is a look at possible addition of new platforms as portfolio kanban gives a great rationale for acquiring new capabilities. 

This concludes the last step in our journey from an abstract ecosystem idea to a portfolio of capabilities required to materialize the opportunity. It is an iterative and collaborative process which can be adapted by organizations of any size. 

This playbook approach can save you a ton of time and pain in traversing the landscape for opportunities and the required capabilities. We hope you will enjoy your business architecture projects with a little help from this playbook.


Chapter 4 – Conclusion: A word for practitioners

The purpose of this playbook is to help marketers, business architects and product managers break through the clutter and achieve faster, more productive results from their ‘ecosystem thinking’ efforts.

Like any methodology, this one has its limitations. We recommend using the playbook for strategies related to emerging technologies and new business models that CSPs plan to venture into. 

This playbook is suited to depict an ecosystem, its components and its growth posture. using it for other purposes may have limitations imposed on those problem statements so tread with caution on solving issues with this playbook. it works best with ecosystem descriptions. 

As with all new methodologies, we have tested the model with a tool or two but the true test happens when you take it for a spin. To this end, the team involved in the catalyst will be delighted to support you in your efforts as and when required.


TM Forum assets

A number of tm forum assets were used to make this playbook work

  • Ecosystem Business Concepts and Principles
  • Business Architecture Capability Reference Map
  • Ecosystem Business Key Themes

Available resources

Visit https://www.tmforum.org/from-ecosystem-to-opportunity-a-play-book-approach-for-csps/ for an introduction to the catalyst project on tmforum website

For a list of growth loops to consider for value streams, visit https://bit.ly/3gXceEZ

Visit our linkedin group page: Ecosystem Design Catalyst