Capture new value from your existing technology infrastructure

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Axiata Group, a Malaysia-based telecommunications conglomerate, has created an exciting new venture using APIs to enable small businesses in Sri Lanka and Bangladesh to use its technology assets to create more than 90,000 services. His experiences can help other licensees understand how to unlock the potential of their technology assets.

When senior executives think about how to respond to the threats and opportunities of technological change, they often dream of the same thing: if they could just create a new company or division that isn’t held back by conventional thinking or patterns. obsolete commercials. But what if they instead asked themselves how they could extract real value from their technology assets?

That’s what Axiata Group, a Malaysia-based telecommunications conglomerate that operates in emerging economies in Asia and has annual revenues of $6 billion, has done. It has leveraged its network assets to help small businesses, including startups, launch over 90,000 services in Sri Lanka and Bangladesh that generated over $100 million in revenue in 2021 for Axiata.

In 2013, one of us (Rodrigo) and his team set out to extract more value from the company’s network assets. The team was frustrated that companies such as Facebook and Google were growing their businesses through Axiata’s data channels, relegating the company to a utility providing reliable connectivity to customers.

In addition to data channels, Axiata’s network assets included the systems necessary to operate its mobile communications business: location data, billing, messaging, quick codes that allowed mobile phones to communicate with a telecommunications operator for queries such as checking if a customer had a negative account balance, and much more. Telecom operators, such as Axiata, have used these systems to track and bill mobile phone usage, sell SIM cards, and introduce targeted product promotions (eg, phone upgrades), among other activities.

In the past, Axiata offered large enterprises access to its network features, but giving it to everyone often took months. Legal and revenue-sharing agreements had to be negotiated, and deployments often ran into hurdles such as developing custom software, which had to be secure, easy to use, and compatible with Axiata’s varying IT requirements and of big business.

Rodrigo’s team realized that Axiata’s network assets could be particularly valuable to very small businesses operating in markets where credit card or online payment usage was low and who could not design and promote new services because they could not access digital channels to reach potential customers. Perhaps Axiata could use its IT assets to enable small, local businesses – like a hair salon, food stand, astrologer, tutoring business or game developer – to reach potential customers, take appointments and get paid quickly.

To support these companies, Rodrigo and his team decided to experiment with a radical approach: transforming them into “do it yourself” innovators. Axiata has made its network assets available through Application Programming Interfaces (APIs), accessible and configurable through an app or web interface. Business owners were now empowered to: They became the innovators who could come up with ideas for new services that worked for them, and no telco involvement was necessary. This community, named Ideamart, has more than 70,000 small businesses or entrepreneurs who want to launch new services in Sri Lanka and Bangladesh and is expanding to other markets such as Malaysia and Cambodia.

How to create an innovation community

Axiata found that developing the software was the easy part. Building and engaging the small business community was much more difficult. Three important ideas emerged.

Open the market.

Axiata launched Ideamart in 2012, but in the first six months few customers accessed the available network features. By interviewing small businesses that had expressed an interest in getting involved, the team learned that business owners had many ideas for new services, knew how to write the required software, but didn’t know how to market new customer services.

So Axiata taught them how to do it. The team selected five businesses, developed a marketing plan for them, helped them grow their customer base, and pitched their stories to the Ideamart community. In 18 months, approximately 1,800 developers participated in the Ideamart and launched new services. To promote and grow the innovation ecosystem, the Axiata team has organized hundreds of hackathons and educational programs every year. She also organized events targeting women entrepreneurs, who managed to increase their contribution to Axiata from 0.5% of its income to 16% in just three years.

Make technology easy.

Many small businesses were unfamiliar with writing software. Recognizing this, Axiata created web-based tools and dozens of standard feature templates that made the company’s network features available to every small business. No coding is required: a small business can design an online service by simply checking boxes and Axiata automatically generates the software.

Experiment with business models.

Axiata’s traditional business consisted mainly of customized voice and data products and services for different markets. Rodrigo’s team realized that Ideamart would require a different approach. It was to enable customers to create bespoke services and was to design new revenue models, which included charging customers a revenue share, transaction fees (lower than other payment services) and fees for specific services (for example, helping a pizzeria target 1,000 customers in a product campaign). To operationalize all of these models, the company had to conduct experiments to determine what prices small businesses would accept, which were usually low because the company did everything itself.

Axiata also learned that it needed to change its internal business practices. For example, the company needed to figure out how to transfer the revenue it was collecting on behalf of small businesses within days, whereas the typical credit period for large customers was 30 to 60 days. It also needed to make transaction revenue information available to small businesses in real time.

Yet another lesson: the team had to work in a framework that suited their clients. A small team of 10 people in Sri Lanka supports the local Ideamart ecosystem. And when the team was asked to move from a rambling building to a gleaming headquarters in Colombo, its members refused, fearing small business owners, who often wear shorts and flip flops, would be intimidated. by a high-rise office tower.

From data channels to an innovation ecosystem

Companies should think about the technology assets in their backyard and the value they leave on the table. Like Axiata, they need to be more creative and experiment with new models of innovation to capture their full value.

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