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Collaborative IT architecture: A make-or-break for modern businesses

Embrace APIs, IoT, and blockchain. Squad up for your business’ future.
By Wipro
Published Last updated This article is more than 2 years old.

Twentieth-century industry was defined, in part, by strict secrecy of IP and a zero-sum culture of innovation. To keep competition at bay, companies kept R&D findings, breakthrough strategies, and tech solutions hush-hush and in-house.

Increasingly, siloed innovation is being replaced by a paradigm shift: co-innovation. To accelerate growth, firms are collaborating with external partners, whose R&D, services, IT, and data are supplementing internal initiatives. A young firm, for example, can rely on resource-expensive AI and cloud capabilities from a large firm, rather than replicating that architecture. Conversely, young firms bring fresh perspectives on emerging markets, and are unburdened by incumbents’ complex processes, demanding customers, or fixed capital costs. In one survey, 71% of C-suite respondents expected over 25% of revenues to be generated via co-innovation by 2030.

These partnerships go beyond joint venture and service provider arrangements. There’s been a meteoric rise of open source software as companies recognize value in crowdsourcing innovation—providing fail-fast laboratories, reducing burden of regressions, and sharing in security review. There have been greater collaborations between industry, civil society, academia, and consumers as data flows across countries and sectors. Global banks are working with fintech startups. The US healthcare industry landscape is being reshaped by a private non-healthcare consortium. Tech powerhouses are sharing supercomputing and superintelligence capabilities with small developers and large enterprises alike. In 2016, more than half of startup accelerator funding came from corporations.

“Collaboration is not a new construct. The difference today is in how businesses can use technology to scale collaboration at a pace they could not have imagined before,” says Abidali Neemuchwala, CEO & Executive Director of Wipro Limited.

Today, collaboration and Open Innovation are critical to meet long-term objectives of organizations.1 However, such rewarding co-innovation is often limited by clunky legacy IT, which is often ill-equipped for collaboration. In a recent industry survey, more than 40% of CIOs cited complex legacy architecture as a major hindrance to digital transformation. Luckily, partnership-enabling innovations like shared and open APIs, IoT solutions, and blockchain are a boon for businesses seeking staying power.

Bringing architecture into the API fold

Open APIs provide businesses with easy, pre-packaged access to one another’s IT without sacrificing IP.  They’re a simple and secure way for organizations to knowledge swap. APIs also reveal latent demand for services, which can uncover hidden revenue channels. For example, a travel-booking app may integrate with several airlines’ APIs to aggregate flight information for consumers, collecting comprehensive data about frequent flyer behavior in the process. The app can then use this data to tweak offerings or roll out premium services tailored to traveler preferences.

With APIs, established companies can adopt solutions on a piecemeal basis instead of continuously reinventing the wheel, and scrappy startups can increase access to resources that pave the way for further innovation.

Today, most major banking institutions are embracing open APIs and inviting fintech startups into the fold. Open Banking is the term for this hybrid industry, and it’s a major shift away from the monolithic stereotype so frequently associated with big banking. This mesh of stable establishment and nimble technology allows both parties to meet user demand for data-driven customizable products. With APIs, established companies can adopt solutions on a piecemeal basis instead of continuously reinventing the wheel, and scrappy startups can increase access to resources that pave the way for further innovation. According to a recent World Fintech Report, more than two-thirds of fintech companies cited “collaborating with traditional firms” as a primary business objective in 2017.

APIs allow companies to better focus on niche specializations without dedicating resources to every single element of the end-user experience. For instance, a food-delivery app wants to reduce the time it takes customers to get its pizzas by anticipating traffic flow. To do so, the app doesn’t need to develop and deploy its own IoT-integrated traffic-monitoring technology. It can simply tap into other companies’ mapping APIs. Those mapping companies, in turn, can monitor exactly how many pizza places are within a three-block radius, and store that data for ad-targeting in the future.

Integrating infrastructure with IOT

APIs can link digital space to physical space through IoT, which is a nearly half trillion-dollar industry that has itself benefited from co-innovation. The Connected Workforce Safety project, for example, involved several major corporations, including Wipro, coming together to tackle the costly issue of worker safety in hazardous environments (think mines, oil rigs, construction sites). Every entity involved brought something indispensable: Wipro contributed its proprietary software; one Silicon Valley giant  brought in its cloud technology; another company lent geofencing beacons; and the project itself supplied hardware in the form of modular wearables like watch bands containing links that can be swapped out for sensors. The initiative successfully produced sensor-enabled wearables—hardhats, watches, and eyewear—improving real-time response to dangerous scenarios like gas leaks, low oxygen levels, and workplace injuries.

And while co-innovation drives IoT, so does IoT drive co-innovation. One obvious collaboration case is intelligent supply chains, where RFID and GPS sensors can improve asset tracking, vendor management, and fleet connectivity. For example, a construction company is currently employing connected wearables to monitor construction sites and track vendor orders, while working closely with cloud software companies and data analysis firms. In another instance, one EU energy initiative installed IoT-enabled wind farms that can communicate with one another in real-time, allowing farms to quickly react and alter turbine direction to best capture wind flow.

Securing connected ecosystems with blockchain

IoT creates data by fostering passive connectivity among infrastructure, vehicles, appliances, and people. APIs, in turn, serve as digital ports of access to that information, but what secures these many points of interactions among partners? The hottest technology in today’s business world: blockchain.

If APIs and IoT are how companies collaborate in digital and physical space, respectively, blockchain is the glue that holds it all together.

The power of blockchain is that it creates an automated, self-binding agreement that all parties can view on a digitally distributed, virtually incorruptible ledger. In the context of the healthcare industry, blockchain may enable physicians and patients to track the source of medications. On a consumer level, shoppers will be able view the supply chain of their groceries, smart devices, or diamond engagement rings via blockchain-enabled apps. Likewise, with IoT, startups are developing connected device-to-blockchain solutions that cut the cloud out of the equation.

If APIs and IoT are how companies collaborate in digital and physical space, respectively, blockchain is a glue that can hold it all together. Blockchain adds a new trust paradigm for intra-company, intercompany, and cross-industry partnerships. Within an organization, blockchain transactions may be used to track and monitor employee benefits like health insurance. Among companies in the same vertical, blockchain allows for a safe and seamless exchange of information—doctors’ offices or hospitals sharing medical records, for instance. Across industries, blockchain facilitates transparency, such as manufacturing facilities proving the sustainability of their products to retailers. One pilot study found that a major retailer was able to trace the source of mangoes back to their origin in 2.2 seconds using blockchain—an exponential improvement over traditional source-tracking, which takes around six days.

On a global scale, governmental bodies have begun investigating how blockchain can underpin sustainability initiatives and are turning to technology companies for expertise and scalable solutions. In the future, a world in which blockchain facilitates an entire city’s sustainable ecosystem (smart water management, energy commodity trading, electric vehicle charging, etc.) is a concrete possibility.

This is why, even in its infancy, blockchain is a point of consideration for public and private institutions. One study found that 57% of large corporations are either seriously considering or actively deploying blockchain technology.

Where collaboration becomes co-innovation

Here’s where it all comes full circle: We’re not far from a world in which a fintech startup develops a groundbreaking software solution, lends the product’s functionality (via shared API secured by blockchain) to a manufacturing company, that uses the platform to track the supply chain via IoT-connected shipping containers and vehicles. By increasing access to data and widening organizations’ reach for ideas, energy and talent, this ecosystem-driven approach to progress will soon be the new status quo. If businesses want to remain relevant, they can’t afford to stay stuck in antiquated infrastructure.

[1] http://wipro.com/microsite/winnovate/pdf/NILF-2018-Open-Innovation-Point-of-view.pdf

This article was produced on behalf of Wipro by Quartz Creative and not by the Quartz editorial staff.

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