Technology Ecosystem Governance

Abstract

Technology platform strategies offer a novel way to orchestrate a rich portfolio of contributions made by the many independent actors who form an ecosystem of heterogeneous complementors around a stable platform core. This form of organising has been successfully used in the smartphone, gaming, commercial software, and other industrial sectors. While technology ecosystems require stability and homogeneity to leverage common investments in standard components, they also need variability and heterogeneity to meet evolving market demand. Although the required balance between stability and evolvability in the ecosystem has been addressed conceptually in the literature, we have less understanding of its underlying mechanics or appropriate governance. Through an extensive case study of a business software ecosystem consisting of a major multinational manufacturer of enterprise resource planning (ERP) software at the core, and a heterogeneous system of independent implementation partners and solution developers on the periphery, our research identifies three salient tensions that characterize the ecosystem: standard-variety; control-autonomy; and collective-individual. We then highlight the specific ecosystem governance mechanisms designed to simultaneously manage desirable and undesirable variance across each tension. Paradoxical tensions may manifest as dualisms, where actors are faced with contradictory and disabling "either/or" decisions. Alternatively, they may manifest as dualities, where tensions are framed as complementary and mutually-enabling. We identify conditions where latent, mutually enabling tensions become manifest as salient, disabling tensions. By identifying conditions in which complementary logics are overshadowed by contradictory logics, our study further contributes to the understanding of the dynamics of technology ecosystems, as well as the effective design of technology ecosystem governance that can explicitly embrace paradoxical tensions towards generative outcomes.

Platform Architecture and Quality Trade-offs of Multihoming Complements

“…We have limited knowledge on the interorganizational schemes and mechanisms used by platform providers to guarantee high-quality integration with complements (Tiwana 2015), and to govern the evolution of the ecosystem of complement providers to reduce unintended variance (in quality) and increase intended variance (variety of high-quality complements) (Tiwana et al 2010, Wareham et al 2014). This indicates a common strategy by platform owners to maintain control over the type and quality of complementary innovations produced: they produce complements themselves.…”

“…We suggest that the true costs of multihoming are determined indirectly by platform owners via technological architecture, and thus possibly heterogeneous across platforms. This has important implications for platform evolution and competitive performance (Cennamo 2016, Tiwana et al 2010Wareham et al 2014), and for platform strategy (Cennamo andSantaló 2013, Claussen et al 2013). Third, some work suggests that multihoming renders platforms more similar because users can use the same complement on different platforms (Landsman and Stremersch, 2011).…”

Business ecosystem research agenda: more dynamic, more embedded, and more internationalized

“…These studies narrowed down the BE to a value chain structure or platform structure. However, a BE contains various stakeholders and involves many stakeholders' interactions (Rong and Shi 2015;Wareham et al 2014), and its structure evolves all the time in order to cope with the evolving business and social environment (Adomavicius et al 2008;Liu and Rong 2015). In order to succeed in a BE, it is essential to have a comprehensive understanding of the dynamics within the ecosystem (Piepenbrock 2009;Winter et al 2017 effects of ecosystem dynamics are believed to easily breach traditional industry boundaries (Iansiti and Levien 2004b).…”

Alliance strategy: context, process, and requirements

“…While current approaches to inter-organizational performance management highlight why interorganizational cooperation matters, which phases are required (Dyer and Nobeoka, 2000) and how inter-organizational governance could be setup (Jones et al, 1997;Wareham et al, 2014), it remains mostly silent on the process of developing inter-organizational performance management and in particular its dynamic nature and synergy effects (beyond the primary objectives of partners' cooperation). Performance management is not only a set of interrelated processes (Neely et al, 2002).…”

“…To increase control, interorganizational governance could be set-up (Wareham et al, 2014). Yet academic research on inter-organizational data governance, a subdomain of inter-organizational governance, is still in its infancy.…”