The Importance of an Open Digital Ecosystem in IIoT

When information flows within digital ecosystems, everybody wins.

813

You walk into the call center of a large transportation fleet. There are four teams separated by cubicle walls.

Each group has a different “dashboard” on a tv screen. Each group is using different applications. Applications from one of their major OEMs or service providers. Communication across groups and sharing of data is manual — by phone, email and shared files.

These IIoT data access problems impact almost every industry.

Why?

Many have equated control of data to control of the customer and thus success.

Systems and information became cloistered.  Anyone viewed as a competitive threat had access restricted.

“In a world of mounting pressure, there’s a natural human instinct to stick to what you know. Don’t go out of your comfort zone because things are really scary out there. And so there’s a tendency to just hold on and just squeeze harder on what you’re currently doing.”

Change is hard for any organization. Information sharing seems to be one of the hardest.

It’s scary.

So companies (departments and individuals) want to proclaim ownership to all data. Some believe sharing information means it is free. So, each group tries to wrestle control over information. They proclaim to be the system of record. Applications remain siloed.

Phone calls, emails, and manual data entry continue to be the de facto standard.open digital ecosystem

Closed Ecosystems Limit IIoT Value

IIoT project failures are rampant. For many, failures are a direct result of poor information sharing and inefficient collaboration.
Frustration builds with customer and partners. Leading to cost increases, limited adoption, and reduced potential ROI. The promise of IIoT requires frictionless (but secure) ecosystem access to information.

business ecosystems for IIoT

What’s a Digital Ecosystem?

A digital ecosystem is an interdependent group of actors, including enterprises, competitors, customers, regulators, individuals, Internet of Things devices, and other stakeholders that share standardized digital platforms to achieve mutual benefit.

There is not a single digital ecosystem.  Each is unique to each company and unique to each target market.

  • Shippers, 3PLs, and suppliers are a few members of the digital supply chain ecosystem.
  • Manufacturers, service providers, fleets, and tow providers participate in the service supply ecosystem.
Recently, I worked with a complex but not atypical ecosystem. It included up to 7 different business entities. Each entity used up to 20 different applications/systems. Each application contained relevant data (historical and real-time).

5 Pillars for Success

The following 5 key areas can help define your digital ecosystem approach.

  1. Start with the customer. What are they trying to achieve? What information is required? The same also applies to business partners.  This helps define APIs as well as information security requirements.
  2. Look at different business models. Look at different business models – Short term revenue gains may not deliver increased customer lifetime value. Think through your options. Each member of the ecosystem requires a value proposition.
  3. Be transparent about your business practices. Don’t call yourself open when you are not. Focus on being easy to do business with.
  4. Protect what’s important. You may have insights and data that others don’t, so use it to your advantage. Don’t be greedy.
  5. Establish clear rules of engagement. Be clear what data you are willing to share, and why. Include your desired quid pro quo.

IoT and digital ecosystems

Yes – It Really Works!!

When information flows within digital ecosystems, each business entity wins:

  • Lower costs
  • Improved efficiencies and productivity
  • Increased uptime
  • Reduced problem identification and resolution
  • Improved financial results (top and bottom line)

The chart below compares two multinational equipment manufacturers. Both made IIoT an integrated part of their offerings. Neither represented 100% of the customer’s connected operating equipment. Only one was able to create ecosystem-wide value.

IIoT digital ecosystem value

There’s No Correct Answer – Except Not Being Open

The new digital world is complex. It challenges many long held beliefs about competitors, data sharing, and value propositions. Your new digital relationships will be different than prior relationships.

Don’t fret. Be open and transparent. Engage your customers and partners, and everybody wins.

Digital platforms have tremendous potential to bridge industries, meld ecosystems and empower businesses to better serve customers and achieve higher levels of performance.