Open vs Closed: Choosing the Right Architecture for Digital Transformation Success

To today's manufacturers, the choice of whether or not they need to digitally transform their business is a no brainer. As they embark on this often complex journey, they are faced with a key question: while building their manufacturing tech stack, should they invest in solutions with an open architecture or a closed architecture?

First, it’s imperative to understand what the distinctions are between an open and closed architecture platform in the context of manufacturing.

A closed platform acts as a walled garden where only products sold by the same vendor (or those specifically approved by them) are able to be integrated. Data is exchanged using proprietary protocols, which makes it prohibitively difficult for third parties to create new products that natively integrate with their platform. It also means that end users are unable to connect it to existing equipment that is not explicitly supported. Vendors of closed architecture platforms try to overcome this deficiency by offering their own solutions for every part of the tech stack, but manufacturers run the risk of being locked into their specific ecosystem of products.

On the other hand, an open architecture built on non-proprietary specifications and protocols makes data readily accessible for other systems to consume. This enables compatibility with a potentially infinite number of third-party components like machines, devices, or enterprise systems. Since there are no vendors monetizing these standards or restricting who can implement them, there is a vast amount of software and hardware being built every day that is compatible with these open protocols. Rather than being restricted to what the platform vendor has officially sanctioned, users of open architecture solutions are empowered to connect to whatever equipment they have, and can extend the functionality of the platform to fit their unique set of requirements.

In the context of your manufacturing operations, the choice of whether to go with an open or closed platform fundamentally shapes what your digital transformation journey will look like. The architecture on which you choose to build your tech stack fundamentally affects how agile, resilient, and future-proof your operations can be.

Since the process of digital transformation is reliant on the insights derived from data to make quick and effective decisions, it is absolutely essential that your solution allows for that data to flow freely between various systems. Your solution needs to be able to easily integrate with tried-and-true systems like your ERP, cutting-edge solutions like no-code tools, and even emerging technologies like generative AI as they become available.

With a closed architecture, vendors tightly control the way that data is transmitted between different components of your solution. This means that you’re reliant on the vendors to build the integrations between these systems or equipment, and limited to connecting to those which they have specifically decided to support. Imagine you come across a new piece of software or physical equipment that could provide a massive benefit to your operations, but it turns out the vendor of the platform you’re using hasn’t specifically built an integration to support it. With a closed architecture platform, you’re simply out of luck in this situation.

Building your tech stack is just like building out your operations: manufacturers know it takes a combination of the best tools from a variety of vendors to create a system that fits the unique requirements of their process. Try as they might, no single vendor has proven themselves able to provide the complete set of tools you will need to transform your business (looking at you, market-monopolizing software conglomerates!). Open standards enable different players to compete in the same market, which pushes them to continuously improve the quality of their products and services. This competition drives innovation, ultimately leading to better experience for the end-users.

The inherent benefits of open architecture from both a business and backend perspective allow such systems to offer a number of advantages over closed solutions. These include:

1. Flexibility and interoperability: Open architecture systems are designed to work well with components from various vendors thanks to their use of non-proprietary specifications. This flexibility is crucial in a manufacturing environment where a variety of systems and technologies are already in place. An open architecture also allows for the integration of new components into existing solutions with minimal effort, enabling you to quickly solve problems and improve efficiency.

2. Future-proofing: Systems built on a closed architecture have an inherently limited lifespan. If a vendor goes out of business or discontinues support for a product, companies relying on their ecosystem could find themselves forced to use the outdated software, or face the massive hurdle of migrating away from their proprietary solution. Open architecture systems, on the other hand, provide a much greater degree of vendor independence and reduce the risk of such scenarios.

3. Data accessibility: In the era of Industry 4.0, data is king. An open architecture makes no assumptions about how data will be consumed, and allows for the free flow of data across disparate systems and platforms. This makes it immediately available to the stakeholders that need it no matter where they are located in the business. This dynamic is crucial in enabling informed decision-making and staying agile in response to changing market conditions.

While this open approach empowers process experts to easily build new solutions, it is also important for businesses to ensure that they are doing so in a secure, uniform way across the organization. Not only is it often a regulatory requirement, but maintaining governance and ensuring the security of your tech stack as it expands is critical to achieving success with an open architecture. Thankfully, there are a number of proven strategies that can be implemented to address these challenges.

1. Establish a ‘Center of Excellence’. A centralized management team can write and distribute best practices, create templates that serve as the foundation for your solutions, and serve as a final approver for all new solutions before they go into production.

2. Manage user roles and permissions. This allows you to control who can use solutions in production, who can author them, and who has access to the data. This is especially important in GxP environments.

3. Implement version control. Version control makes it simple to guarantee that all groups are working with the most up-to-date solutions and information. It also make it easier to roll back solution versions, if needed.

4. Create a centralized repository of solutions. This helps ensure uniformity across your business, and allows engineers to save time by making sure they never have to build the same solution twice.

Still not sure which approach is right for you? If any of these goals or requirements sound familiar, an open architecture solution is ideal to address them.

• You have a wide variety of existing software and hardware with which you need to maintain interoperability.

• You’re looking for a long-term solution that avoids vendor lock-in.

• You want to easily integrate and pilot new technologies as they emerge.

• You need the ability to quickly and thoroughly adjust the solution to meet your exact requirements.

While in general this approach has a number of significant advantages, there are a handful of instances in which the benefits of a closed solution may actually outweigh the costs. Here are a few cases to consider.

• Your operations are relatively simple and don’t really change.

• You’re in a highly regulated industry with an IT organization that strictly limits you to certain pre-approved vendors or solutions.

Beyond the few outliers like these, however, it is clear that for a successful digital transformation your solution must be highly flexible, and implemented in an integration-friendly way. Only with an open architecture is this possible to achieve.

Whether it’s open or closed, the architecture you choose is ultimately a strategic decision that depends on the specific needs of your operations. Keep in mind that the approach you choose will serve as the foundation for the tech stack you build, and will impact almost every aspect of your transformation journey. It is critical to ensure you understand your business requirements, the goals you aim to achieve, and the existing state of your tech stack before making this choice. At the forefront of your mind as you approach this fork in the road should be the flexibility, resilience, and long-term sustainability of your business.