To take full advantage of new business technologies, technical directors need to adapt their traditional IT approaches to the opportunities and challenges of emerging technology ecosystems. Here’s how it’s done.
The role of IT in the traditional sense is the foundation for the company’s operations. One of the main functions of the business was to protect the company’s operations with firewalls and encryption in order to limit access to technologies from outside.
However, with the development of technologies, a large number of opportunities and sources of competitive advantage appear outside the traditional business framework. These opportunities are combined in many new ecosystems.
Ecosystem archetypes: explosive growth
Such ecosystems often overlap. For example, a social payment application can be part of an ecosystem of mobile, social, information and banking services. The Internet of Things (IOT) is an ecosystem in which multiple applications interact with each other as a network.
By connecting to such an ecosystem, companies can access the entire network. Among other things, they can find new customers, connect to new data sources and improve current business processes.
Technical directors and IT organizations have a key role to play in leveraging these opportunities. But they will not be able to do so if they continue to do business the old-fashioned way. In an ecosystem environment, an excessive emphasis on “self-protection” will limit the company’s ability to take advantage of new opportunities.
In order to adapt their complex business architecture to the ecosystem world, IT directors will have to figure out how to simultaneously use external technology and address security issues while managing the rapid flow of technological innovation.
IDC predicts that by 2018, more than 50 percent of large enterprises and more than 80 percent of enterprises with advanced digital transformation strategies will be building industry platforms or collaborating with existing ones. At the same time, according to Cisco, more than 50 billion devices will be connected to the network in 2020.
These figures lead to a radical rethinking of what IT is and suggest that technical directors should manage them differently: not as a set of internal information technologies (IT), but as a broad network of ecosystem technologies (ET). For the CTO, this shift also creates an excellent opportunity to work closely with the CIO on business priorities and become a key strategic partner.
What are ecosystem technologies
ET includes an extended set of IT features and functions (Appendix 2). The Technical Director still needs to manage the “multi-speed” IT functions as well as the ongoing two-way programs. The next level, ET, represents a new set of features as well as an extension of existing ones.
Open up internal IT to the outside world
This approach is to build an IT architecture to communicate internal systems and capabilities with external systems. One example of this approach in action is the Delta Air Lines mobile application, which interacts with Uber so that travellers can order a taxi as soon as they land.
Kraft has made its prescription application a shopping management tool that creates a list and easily passes it on to the Peapod product delivery service. Take this as an extension of the user experience – and the company’s customer relationship – through integration with other service providers.
Many companies are already providing opportunities for integration to higher and lower-level partners – technologies such as EDI (Electronic Data Interchange) have existed for decades.
However, these integration points often remain static. These are two-way links to a small pre-selected group of partners, such as distributors and suppliers. These integration points are seldom used, and often in an integrated manner.
In the future, integration with external ecosystems will force companies to interact with many partners covering a wide range of functions, from customer search to social advertising and payment solutions.
This will be because the low cost of technology and the dynamic startup environment have led to a significant increase in the speed of implementation of new services. Thus, IT must follow the “Amazon principle”, making system components available as services to ensure integration with the ecosystem.
Interfaces need to be open, dynamic and functional in real time so that they can integrate partners, technologies and applications as needed.
One obvious consequence of this process is the need to develop a lightweight technology architecture based on microservices and application programming interfaces (APIs) to allow third parties to easily connect to the new ecosystem.
Technical Directors need to think in terms of the platform categories and architectures used by automotive OEMs to enable future upgrades across the entire ecosystem. They may even need to provide users with an app store so that they can choose the right features. And, of course, the infrastructure must be reliable and secure.
An example of how this can be implemented can be found in telecommunications companies that are expanding their range of interconnected services to include e-commerce, music, insurance, healthcare, education, media and smart homes.
All these services are integrated into one ecosystem, offering several services to the client through the backbone of the telecommunications company. Salesforce’s AppExchange already implements this model, creating a cloud environment where developers can create and release their own applications.