A look at how the private sector can get best practice advice, learn from the public sector and avoid the vicious cycle of vendor lock-in while benefiting from the transformation towards open architectures.
Open Standards: Open Opportunities – flexibility and efficiency in government IT
From 1st November 2012 Francis Maude, Minister for Cabinet Office, announced that all government bodies must comply with Open Standards Principles, an agreed set of standards to make government IT more open, more cost-effective and better connected.
“Government must be better connected to the people it serves and partners who can work with it – especially small businesses, voluntary and community organisations. Having open information and software that can be used across government departments will result in lower licensing costs in government IT, and reduce the cost of lock-in to suppliers and products.” – Francis Maude
Definitions of Open Standard and Open Architecture
An Open Standard is a publicly available standard – often for interfaces – such that systems that comply with it should be able to interoperate appropriately.
Recommended for YouWebcast: Relationship Marketing: How to Build a Relationship that Converts to Sales
An Open Architecture applies to a system in which the architecture is published in sufficient detail to enable change and subsequent evolution through the introduction or replacement of modules and/or components from any supplier.
A world without standards
What would the world be like without standards?
Imagine if when you bought a car you could only use fuel from a certain garage. You have a Shell garage within a couple of miles of your house so you buy a car that can run on Shell fuel.
Now what happens if Shell decide to push their prices up out of line with the other fuel vendors?
Well you could change your car in protest but the cost of change would likely outweigh the benefit you might yield from an alternative vendor.
And what if you wanted to move house and the nearest Shell station was 50 miles away?
The hassle and expense of incorporating a 100 mile round trip to fill the car up, or the cost of changing the car might be enough to persuade you not to move. You’re locked in.
Vendor lock-in is when customers are dependent on a single manufacturer or supplier for products and cannot move to another vendor without substantial costs and/or inconvenience.
This dependency is typically a result of standards that are controlled by the vendor.
The term is commonly used in the computer industry to refer to the situation that can occur due to a lack of compatibility between different hardware, operating systems or file formats. Such incompatibility can be intentional or unintentional.
The costs of lock-in can be severe.
They can include:
- Substantial inconvenience and expense of converting data to other formats and converting to more efficient, secure and inexpensive application programs and operating systems.
- A lack of bargaining ability to reduce prices and improve service.
- Vulnerability to forced upgrades.
- The corruption, or even loss, of critical data while attempting to convert it.
The best way for an organisation to avoid becoming a victim of vendor lock-in is to use products that conform to free, industry-wide standards.
Vendor Lock-in Vicious Cycle
- Evaluate closed standards software from Vendor X without consideration of switching costs
- Add to that a reluctance to change due to incumbent skills and relationships
- Buy closed standards software from Vendor X
- Switching costs to Vendor Y + Vendor Y software costs > than Vendor X software costs
- Organisational requirements change/develop
- Preferable solution from Vendor Y is not interoperable with Vendor X software
- Additional functionality required from Vendor X is very expensive and/or not best fit £££££
It’s not about the mandate
“The mandate has doubtless caught the attention of many government organisations but most are motivated by the carrot not the stick.”
Simon Mitchell, Executive Director – Strategy & Transformation at Linux consulting firm LinuxIT
Independent research* into the specific benefits of the policy identified the following:
- Reduction in lock-in and associated switching costs
- Reduction in the size and duration of IT projects and the sharing and reuse of IT across departments
- Encouraging innovation and opportunities for smaller companies to participate in contracts
- Improving business and consumer interface with government.
* Centre for Intellectual Property & Policy Management at Bournemouth University
Private Sector Benefits
The private sector has no mandate, but never have organisations been more motivated to reduce costs, drive innovation and improve their customers’ experience. These benefits are all available with transformation towards Open Architectures. Councils, Police forces, NHS Trusts and academic institutions are already on the journey.