Nobody likes silos. Not only do they restrict the necessary flow of information that conditions proper coordination of actions, but even more, they complicate adaptation to change. No wonder then that for over twenty years, the desire to “break the silos” has become a real mantra for many CIOs. But rather than trying to break them, would not it be better to get organized so that they finally communicate better with one another?
Most often, a company is built by creating, voluntarily or not, data silos that stem from various origins:
- Structural silos with specific applications and optimized for defined business lines;
- Political silos with BUs not always inclined to share their own data (an infinite source of power);
- Growth silos between subsidiaries or branches that result from various financial transactions, such as Mergers & Acquisitions.
Most often useful data can be difficult to access for a given specific need. Even though data might represent THE competitive value creation lever for each business line. At the digital age, control data, you might soon control your very own universe.
An unprecedented shift in business organization
The need to regain control over data and to obtain full visibility on the activity of the company and its environment has become vital. Hence, the need to make silos communicate with one another. Not to break them, as this would inevitably lead to the creation of new silos.
When a company is organized around business lines, it often creates difficulties of collaboration around referential data such as products. Should a reorganization take place around product groups, the same difficulty of cooperation will arise between the newly created product lines.
The objective must then not to destroy those silos. For all their flaws, they can still be very useful as departments in an organization may not often need to interact with domains that do not concern them. It is definitely better then to create communication channel between silos. When, and only when, necessary let the data flow, let business lines compose their own data from various sources to create additional and differentiating value. Such an approach often requires a good deal of questioning within the company but can create significant value.
In the background, the Information System must be sufficiently open to translate this vision into reality. The reconciliation between the new digital / mobile worlds and Legacy assets fosters the spread of APIs. Both are indicators and concrete drivers of change towards the Enterprise Platform.
To support this ambition, the company must be able to rely on technological platforms that are open and adaptable. With the opening of the IS to new entities or new technologies (business partners or start-ups, cloud or mobile apps, objects …), it has become vital to be able to circulate data freely and securely and to allow intelligent interactions between various systems, existing or new.
The shortest way to achieve this agility is the implementation of an Integration Platform in the cloud (iPaas), to manage the flow of data between different applications, be they in the private Corporate Network of the company (“Customer Managed”) or in the Cloud (“Partner Managed”).
From the clustered corporation to the web enterprise
The company has gradually integrated the codes of the knowledge economy: fluidity, interconnection, transparency, collaboration. By moving towards a model of technological, social and interactional platform, the company optimizes its dynamic links with the outside world and thus enters a logic of increased innovation. Microsoft has been one of the precursors of this model by embedding separate software within a single software suite, creating the first platform of the modern era.
Data is, after the human, the most valuable capital of the company. It is therefore the entire functioning of the organization that must be rethought with this idea in mind: interact with an expanded ecosystem composed of customers, suppliers, partners, etc. via a policy of generalization of APIs, which make possible those interactions.
The corporate of tomorrow: a collective intelligence platform
Is it worth remembering that companies that have adopted a platform business model for a decade (Uber, Facebook, Netflix …) have seen their size and revenues increase dramatically. This model is no longer restricted to social networks, music, travel or books. All sectors have been affected, and platform ecosystems are spreading through the digitization of products, services and business processes.
Most platform businesses are inherently digital and capable of capturing, exchanging and monetizing data, including personal data that everyone voluntarily or not gives away on the Internet, via Baidu, Alibaba, and other Tencent for instance. The value of this type of approach is measured by the ability of an organization to interact without limits with a rich and varied ecosystem (individuals, partners, service providers, customers, etc.). To achieve this, platform businesses are generally built around software suites, to which services are added.
Innovation platforms represent another model of platform business. These are built on technological bricks around which innovative companies, from around the world, can develop complementary services or products. A company that opens its technology stack through APIs allows multiple players to develop applications in its ecosystem and maintain the virtuous circle of innovation. Apple is the most significant example.
The strength of the network is the strength of the platform. The more users there are, the more valuable the platform becomes, and the more attractive it becomes to new users, again allowing a virtuous circle to take shape.
Admittedly, the network effect already existed before the appearance of online platforms, especially in the field of telephony, but with some 1.47 billion smartphones sold in 2016 (source IDC), the phenomenon took a completely different scale. Connectivity, present in all hands, provides a huge playground for business platforms.
Elon Musk himself has compared his Tesla company to a platform, that fully integrates the need to understand the use of vehicles and driving habits. All the data collected improves both service and customer experience.
A few years ago, a car manufacturer would have found it hard to collect all the available data, especially those of its end customers. From now on, the approach is a pre-requisite for the sustainability of any organization, in any sector.
CUSTOMER CASE STUDY: L’OREAL
L’Oréal group has long understood the benefits of such a transformation and offers products that revolutionize cosmetics. For example, the patch La Roche Posay collects information on the skin and age of a customer and sends them to an application that combines them with weather data, to advise on the proper use of UV and customizes the recommendation adapted products. The brand Kerastase has launched the first connected brush that allows “to listen” to the hair and correlate customer data with the weather or other data, allowing again to establish personalized diagnosis. Behind those marketing transformations of the offer lies a platform that allows the patch and brush to acquire information, consumer data. The company has thus gone from a traditional company offering cosmetics to a company that learns, advises and prescribes relevant and personalized beauty advice to customers. Through the collection and processing of scientific data, it brings real added value to the consumer. The connection of those two products is made possible thanks to an iPaaS platform, which makes it possible to easily connect Data, APIs and applications.