Forty years ago, technology vendors had it all figured out. They would differentiate themselves by continually bringing new proprietary solutions to market—a recipe for success in an age of a closed hardware dependent architecture. By exclusively building their own product portfolio under patent or trade-secret protection, companies could easily secure long-term revenue. This proprietary race fueled business for decades, and it still does today. Consider proprietary software solutions from Apple, which have licensing terms that limit usage to only Apple hardware (for example, Mac OS X).
A proprietary model offers several perks, yet not enough in today’s era of digital transformation. Intelligent, connected technologies like IoT, AI and machine learning have ushered enterprises into a new era of any-to-any communication, one filled with seemingly limitless collaboration and CX possibilities. As companies worked to keep up with the rapid pace of innovation, they came to realize that proprietary solutions stifled their efforts to grow and evolve, and they could no longer rely on one or multiple vendor or their life cycle timelines to develop the next-gen CX and/or vertical-specific services they needed.
A Big Change in a Small Amount of Time
Over the course of just a few short years, we saw a massive paradigm shift in which companies began seeking niche vendors to drive revenue and competitiveness. They turned to cloud-based businesses that were born in the digital era. They looked to startups that specialized in vertical-specific strategies. It wasn’t long before the average organization had created a unique, multi-vendor ecosystem in which various solutions were integrated to meet specific customer and vertical requirements. Case in point: the average business now leverages up to six different cloud solutions.
As every market filled with competing vendors, it seemed the most influential players were those that offered engaged, open ecosystems. These vendors allowed customers to freely modify original source code for virtually any purpose, versus retaining copyrights. With so many companies operating complex, multi-vendor ecosystems, open architecture that enabled collaborative app development became ideal for driving desired customer outcomes. We even see customers now acquire their own technology to accelerate the digitization of their business. You can’t do that in a proprietary and rigid architecture.
Multi-vendor Ecosystem vs. Open Ecosystem
This rise of niche vendors isn’t expected to slow down anytime soon. In fact, Gartner predicts that startups will overtake leaders like Amazon, Google, IBM and Microsoft in markets like AI by 2019. If not properly supported, however, a multi-vendor environment can create infinitely more harm than good.
For starters, companies must secure their multi-vendor ecosystems. Research shows that the average organization’s network is accessed by 89 different vendors and partners per week, a number that should send chills down your spine from a security perspective. If that’s not shocking enough, one-third of companies admit they don’t know how many vendors access their systems at any given time. Despite this, over 70% believe their number of third-party vendors will increase by 2018.
In addition to this is the inherent challenge of seamlessly leveraging multiple different vendor solutions. You see, if these solutions aren’t properly integrated, they don’t represent a truly open ecosystem. To build targeted solutions that continually improve outcomes, companies must be able to seamlessly collect, track, share and use the data that exists across all vendor platforms and knowledge bases. None of these systems can be siloed from one another.
Consider the benefits of an open ecosystem within the transportation industry. Picture this scenario: administrators have taken notice that the 7:45 a.m. train fills up every morning to the point where passengers must wait for the next train. In a truly open ecosystem, management can leverage data collected across various integrated solutions (i.e., ticketing platforms, video surveillance systems, Wi-Fi/carrier grade services, mobile app systems, movement sensors, etc.) to identify the root cause of the issue and begin driving better customer outcomes. Data from the ticketing platform, for instance, may show that tickets purchased for 7:45 a.m. exceed the train’s maximum capacity by 15%.
At this point, management can leverage data in various ways to determine the best solution to the problem. For example, they may want to build a sophisticated level of automation to dynamically change the train schedule, monitoring it for continual improvement. They may choose to send automated SMS messages informing customers of anticipated congestion times and suggested alternatives for work travel while displaying updated information in real time on their digital signage systems. They could incentivize daily commuters by offering 15% off monthly passes if used for an earlier or later train time. Regardless of how the experience is enhanced, the entire technology ecosystem should be actively working together to make it happen. As I say, dealing with congestions on highways by constantly rebuilding the roads with more lanes is not exactly the smartest approach. Maximizing and optimizing its usage through smart traffic distribution and management can be proven to be way more effective while meeting the citizen’s experience.
The Future of the Customer Experience Relies on Open, Extensible Architecture
The more open a business ecosystem, the more seamlessly data can be leveraged to drive desired customer and citizen outcomes. The ability to track, collect and share data across dispersed systems is what allows companies to create custom solutions that target exact customer requirements. This open, extensible nature is vital within a next-generation platform.
Differentiating oneself is no longer as simple as rolling out a new proprietary solution. To drive desired outcomes and deliver true value, organizations must be open, agile, integrated and future proof. As the world continues transitioning to an open ecosystem, we become that much closer to eliminating a longstanding dependency on legacy hardware and hierarchal architecture.
So far, I’ve discussed four of five critical components that organizations must start looking at within a next-generation platform: next-gen IT, IoT, AI and open ecosystem. Up next, we’ll take a deep dive into the final and most significant of these: the customer (or citizens) experience. Stay tuned.