Plug-n-play businesses of the future

A couple of years back, I wrote about Antifragility, APIs and Amazon like businesses.

The main point of the discussion was how Amazon (for example) could unlock lots of value by decoupling and exposing different 'layers' of its business as services, using APIs or some equivalent, as it has done extremely successfully with IT infra.

As business leaders are thinking 'how to' for the post-COVID recession future and considering ways to 'variabilize' their cost base, I am increasingly reminded of this thought and it's relevance today. Consider the following:

1. The thought process of 'variable everything' is becoming more prevalent - especially in the startup stage business ecosystem. Don't get tied down to anything, the thinking goes - 'hire' office, operational staff, everything really, as a variable cost 'subscription' or short term 'gig' of some kind - holding only the hard core of technology skills, IP or customer relationships in house. And then sell your product 'As A Service' as well.
2. Increasingly, every single part of the business has a corresponding IT backbone which enables its function and creates visibility into what is happening. For significant parts of the business, 'work' flows from one part to another over these systems. As we move towards a formalized (e.g. GST/Aadhaar), contact-less and technology enabled world, more players in a value chain will find themselves surrounded up and down the chain by others who are also technology enabled and theoretically capable of technology 'integration'.
3. In IT, there is a popular idea called the 'Microservice Architecture' - an approach to move away from the traditional monolithic (single) application towards a collection of loosely coupled, independent services structured around business functionality. Other themes such as containerization also build into the idea of separating out functionality.

Now, the idea I'm illustrating stretches these thoughts together into a different kind of future, where not just whole organizations, but parts of it, start interacting digitally like organisms, buying, selling and contracting - within and outside the organization.

Illustration: Plug and Play businesses

Plug and play businesses is the idea of the future organization which is able to maximize asset efficiency and respond fast to changing market dynamics based on the ability to rapidly and seamlessly transact for capabilities, supported by deep and open IT integration. It could allow for deep specialization of enterprises with the associated efficiencies, unique operating models as well as very fast scale up of successful business ideas.

Admittedly, this is very far fetched - not meant to be presented as a realistic near future possibility but more of a thought experiment or thought starter. Several requires pieces probably do not exist today - including marketplaces for B2B services, electronic (code-based) contracting, and the 'Management API's responsible for synchronizing and optimizing the entire system for an organization. However, I believe the concept presages the disruption of established industry value chains where transparent & reliable information flows and technological maturity may allow many traditional industry role archetypes to change unrecognizably or even disappear (E.g. - the travel agent, or hyperlocal commerce firms supplanting traditional FMCG distribution).