Is outside-in architecture right for your company?

Outside-in architecture connects partners, suppliers and other external parties to a company’s ecosystem. While this design is growing in popularity, does the ability to share information with third parties justify the cost of replacing your current centralized architecture?

Recently, increased competition has led some companies to embrace an emerging IT architecture model that supports information sharing among internal and external parties. Advocates of this “outside-in architecture” approach argue that it will soon become an essential element of business results. Yet this notion meets with resistance from companies that have invested heavily over the years in creating and maintaining a traditional, centralized IT architecture. Their reaction is understandable and it raises the question of whether companies should divert resources toward a new architectural model that has yet to mature and demonstrate its longer-term value to the enterprise.

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Eric Openshaw, Principal, Vice-Chairman of Technology, Deloitte Consulting LLP

Outside-in architecture should be on the CIO’s radar now. The growing need to share information – not just internally, but externally with partners, vendors and clients – is leading companies to think beyond traditional centralized IT architecture models. Indeed, they will likely need to tie multiple, and in some cases thousands, of autonomous entities into a single IT ecosystem where they can move and share data freely.

With this in mind, CIOs should consider experimenting with outside-in architecture to get a better idea of how it could support their company’s strategic goals and, potentially, add value. Perhaps they could implement the model on a small scale in an environment that has many of the characteristics and needs of the larger ecosystems, such as supporting a new product, or as part of a geographic expansion. One of the features/benefits about outside-in architecture is that, unlike centralized architecture which requires a large investment to achieve scale, it can be implemented incrementally. As a result, you can pay – and learn – as you go.

The potential benefits of taking an incremental approach can be formidable, while the cost of failure can remain modest. However, the cost of doing nothing could be high. Competitive pressures are forcing companies in virtually all sectors to expand toward much larger ecosystems of specialized providers. Increasingly, small companies are leveraging this model to expand their scope of services. Large companies are assessing it as a potentially cost-effective alternative to centralized models. The question, then, is likely to change from “if” they will embrace outside-in architecture, to “when” – and for some companies the answer may likely be “now.” 

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