The evolution of the product-aligned operating model is a trend that is not being discussed enough despite its significance and proliferation. This transition is driven by the recognition that as organizations adopt a product-aligned operating model, there are many products that are alike and thereby creating a need for global products that can be run as shared platforms.

Research indicates that companies with mature product-aligned operating models have experienced 60% greater total returns to shareholders and 16% higher operating margins compared to their counterparts using less mature models​. Furthermore, organizations with high product-aligned operating model maturity enjoy 38% higher customer engagement and 37% higher brand awareness, reinforcing the model's efficacy in maximizing business performance.

As the demand for rapid innovation and enhanced customer experience at reduced cost increases, organizations find themselves at a crossroads, contemplating the future of their operational frameworks. This momentum raises a critical question: Is the product-aligned operating model the ultimate design framework for organizations?

To address this, we must explore the emergence of shared business platforms. They are designed to build upon the strengths of the product-aligned operating model, enabling organizations to adapt to the complexities of modern, global markets while continuing to enhance value delivery and customer satisfaction. By understanding the shift to platform-centric frameworks within the product-aligned operating model, organizations can better navigate the challenges presented by an ever-evolving business landscape.

The role of platforms in the product-aligned operating model

To clarify at the onset, platforms within this context should be understood as business platforms, which are distinct from technology platforms. The proliferation of platforms represents a significant advancement in the way organizations approach their operational strategies, particularly as an evolution of the existing product-aligned operating model. This trend is not a rejection of the product-aligned operating model; rather, it enhances and expands upon its foundational concepts.

While the product-aligned operating model focuses primarily on delivering specific products and services to meet customer needs efficiently, the use of platforms adds a broader, more integrated, standardized and harmonized approach that facilitates shared value creation and cost optimization across multiple business units of the organization. These platforms enable a synergized suite of capabilities that can be effectively utilized across various business units within the enterprise, including KYC platforms in banking, procurement systems, HR platforms and more.

Evolution of shared business platforms

There are two types of business platforms: shared and dedicated business platforms. Shared business platforms serve as a valuable resource for organizations, enabling them to drive efficiencies while addressing cost concerns prevalent in today’s macroeconomic landscape. By creating common standards and harmonized processes, shared platforms facilitate economies of scale that benefit multiple entities within an enterprise, allowing for streamlined operations and reduced redundancy.

The benefits of shared business platforms are significant

• Organizations can reduce costs by leveraging shared resources and processes, avoiding unnecessary duplication of effort
• Centralizing operations leads to a consistent approach across the organization, improving collaboration and communication
• Standardized platforms reduce complexity, making it easier to manage offerings while allowing for necessary customization where it matters most
• By unifying distinct platforms into a single, robust shared platform, organizations can reach wider audiences and drive top-line revenue growth

A pertinent example of a shared business platform in action is the global Know Your Customer (KYC) platform used by a major banking institution. At a multinational banking and financial services corporation, we implemented a global KYC and Customer Due Diligence (CDD) solution, enhancing its anti-money laundering compliance across 30 countries.​ The platform supports various customer segments, business units, geographies and financial products and includes features for onboarding, periodic reviews and KYC offboarding.

​Ultimately, such instances of shared business platforms being used for crucial functions illustrate how organizations can evolve their product-aligned operating models to foster agility, efficiency and sustainability, positioning themselves favorably within competitive marketplaces.​

Driving specialized capabilities with dedicated business platforms

In the evolving landscape of business strategies, dedicated business platforms emerge as a critical component for an organization’s differentiation.​ These platforms are tailored specifically to address unique business units or capabilities that require specialized focus, enabling organizations to enhance customer engagement and differentiation.

A notable example of a dedicated business platform is a global life sciences company's initiative specializing in healthcare and agriculture to integrate its digital solutions for crop science.​ This platform unifies various agricultural practices, enhancing collaboration among farmers and improving access to innovative technologies that drive efficiency and sustainability in farming.

It is important to note that both shared and dedicated business platforms still operate within the framework of the product-aligned operating model. When a particular customer segment demands highly customized solutions or when a business operates in a specialized industry, dedicated business platforms become essential.

Layered-cake architecture for complementary roles

For business platforms to deliver on their potential, having the right architecture is essential. By considering the unique and complementary roles that various platform types play, a layered-cake approach emerges as the best solution. This structure organizes the platform into distinct levels, each with a clear purpose, enhancing its overall efficiency and effectiveness.

Here’s a simplified view of the key layers in this architecture:

• Foundation layer: This is the technical backbone, hosting essential tools and functions like user authentication, activity monitoring and error handling. Think of it as the core infrastructure, much like the basic utilities in a smart home. Examples include platforms like SAP BASIS or Pega Core, which provide these foundational capabilities.
• System layer: This layer contains features that businesses across industries commonly need, such as approval workflows, escalation processes or lifecycle management tools. These are flexible, configurable and not tied to any specific business context – much like a universal toolkit that fits many tasks.
• Leveraged layer: Here, we have components that can be reused across an organization. For instance, in a global banking system, this layer could include tools for monitoring transitions or screening media that apply to various products and regions. It’s like a shared library of resources for different teams.
• Differentiated layer: This layer focuses on features unique to a specific business, product, or region. For example, a pet care unit might have an order management system tailored to its needs, which would be different from one designed for consumer services. This is where customization happens.
• Personalization layer: The personalization layer brings the entire architecture to life by delivering tailored experiences for end-users. It focuses on aligning services with individual preferences, business-specific contexts or customer needs. For instance, using customer data to create a seamless experience across regions or brands.

To make these layers easily accessible and adaptable, they are developed with the principles of being composed via microservices, consumed via APIs/streams and cloud-native. The personalization layer, which delivers tailored user experiences, leverages special experience APIs designed specifically for aligning services with customer needs.

Charting the course forward

At HCLTech, we are at the forefront of helping organizations unlock their full potential by balancing these models. But this isn't a journey we make alone. It's a collective evolution that requires shared wisdom and experiences.

A noteworthy observation is the emergence of a 60-40 rule, indicating that approximately 60% of organizational capabilities can be aligned with shared business platforms, while the remaining 40% are suited for dedicated business platforms. This trend toward shared business platforms is steadily increasing as organizations recognize the importance of scalability and cost efficiencies while continuing to meet the nuanced demands of their markets through dedicated business platforms. Embracing both shared and dedicated business platforms allows organizations to navigate the complexities of modern business environments effectively while enhancing customer value and operational performance.

So, let’s continue this conversation. Our insights and perspectives could be the catalyst for the next big innovation in our industry. Let’s build a better future where product and platform models augment each other to create value like never before for enterprises.