The value of adopting open system architecture solutions has often been debated. On the plus side, it opens doors to more innovation. On the downside, though, is the risk of arming competition with access to all those same innovations. Increasingly, the supply chain has been moving to an open architecture approach and that is creating value for enterprises up and down the chain while also reducing costs.
Your operation may already be running on an open architecture system, although there is still a significant portion of the industry that is not. The Business Dictionary defines open architecture systems as “vendor-independent, non-proprietary, computer system or device design based on official and/or popular standards. It allows all vendors (in competition with one another) to create add-on products that increase a system’s (or device’s) flexibility, functionality, interoperability, potential use, and useful life.”
In essence, it allows a single solution to bring together the value and power of many systems.
If you are not running such a system, you could be losing out on many advantages. Implementing this approach, though, is not as simple as making a software decision. It must consider factors that can alter the value proposition.
“While generally, there are going to be cost savings, the value proposition we bring to the market is not based only on that cost savings,” explained Dan Gordon, Vice President - Solution Design, for Redwood Supply Chain Solutions. “The value is the flexibility and scalability as well as the speed to delivery. That’s really where it comes into play.”
Gordon noted that when any customer is looking at adopting a solution – either open or proprietary – the first and most important consideration is whether it solves the business need. At Redwood, an integration resource team made up of experienced industry experts works with clients to find the right solution.
“Every single person, on our team, really understands the business problem, they’ve experienced it themselves, they understand the pain, and they can implement solutions,” Gordon said.
This approach sets up customers for success and allows those customers to benefit from disparate systems that are connected through the RedwoodConnect solution. RedwoodConnect, a proprietary integration platform built by Redwood with open architecture principles in mind, streamlines the process of connecting disparate systems.
The idea, Gordon said, is to bring flexibility to customers by leveraging the technologies they already have installed. This reduces cost and improves efficiencies, but it all comes back to solving the problem at hand.
“You can make the technology work and still not solve the business problem,” Gordon said. “For example, we are partners with one of the leading TMS providers out there, but using TMS as an example, we believe that that specific product has been commoditized. [Still], customers experience pain when implementing a new TMS or [adding] a customer. We take a lot of that pain away by allowing the customer to use the same patterns they’ve been using and we’ll make the technology match.
“It’s the practice of adapting the technology to fit the customers’ business versus asking the customer to adapt their business to fit the technology,” Gordon added.
A significant benefit to this open architecture approach is that customers don’t need coders. “Most integrations fail because there is a significant lift required from a client’s IT department,” Gordon said. “We have built a process where a customer does not have to build their own connections or write any code on their end. They simply repoint their current format to a connection on our end and we handle the rest.”
Adopting an open architecture approach to software deployment can generate an initial 20 percent savings over paying an IT consultant to handle the integration of systems. “After that, we see exponentially savings on additional integrations because we’ve already [made those connections],” Gordon said.
According to Gordon, while prices vary based on the complexity and unique business case, a TMS implementation quoted at $100,000 can end up costing much more, up to $300,000 or more in some cases, because of integration problems. Deploying a standalone TMS [without integrating] can also limit a customer’s value to less than 50 percent of its capability, he added. An open architecture approach eliminates many of these problems as the solutions are designed to adapt to almost any system, and can easily transition from one system to another, say, from an AS400 ERP to an SAP solution without reintegrating your entire network.
The other big benefit often overlooked when deploying technology solutions is scalability. With a solution such as RedwoodConnect, scalability is not an issue. This can be important when growing a business either through expanded services or especially through acquisition, when different software systems are part of the package the customer is acquiring.
In the end, the flexibility an open system architecture can provide opens the doors to ensuring customers are using the right technology solutions for their unique business needs, rather than choosing a financial solution simply because it works well with the dispatching software.
“Businesses continue to evolve and change,” Gordon said. “Think of how much our world has changed in the last 10 years. Having a scalable architecture that allows for inclusion of new technology allows companies to continue to grow and adapt to the changes ahead.”