The DXP Debate – Open or Closed?
Digital never stands still. Changes in consumer expectations, digital technology and, as a consequence, the terminology we use to define and explain it, have been accelerating ever since the introduction of the smartphone. It’s also why Gartner recently decided to close the lid on the term ‘Web Content Management’ (WCM) and replace it with ‘Digital Experience Platform’ (DXP) in its annual Magic Quadrant report (CMSWire).
As the lead author of the former WCM Magic Quadrant, Irina Guseva, pointed out, the change to DXP terminology was very much about recognising “a new definition of content management system”. As the context (where, when and how) of content delivery has become equally as important as the content itself, WCMs have had to evolve into something far more complex – enter the DXP.
To understand the intricacies of a DXP and how it differs from a CMS, check out our previous blog post What is a 'Digital Experience Platform' and why do I need one?.
Open vs Closed
Generally, the most important question over which most organisations agonise isn’t whether or not they need a DXP (quick answer: yes, you do), but whether to opt for open or closed:
- Open DXPs act as connecting tissue, integrating ‘best-of-breed’ products from multiple vendors. Open DXPs are usually open-source (but don’t have to be) and offer open APIs to enable other systems to easily work together. Taking the concept of ‘open’ even further are Integration Platform as a Service (iPaaS) solutions, which enable organisations to develop and deliver integrations across any on-premise or cloud-based environments, without needing to buy or manage additional software.
- Closed DXPs are generally marketed as a ‘single platform’ solution. Instead of integrating with other ‘best-of-breed’ technologies, closed DXPs combine (usually through acquisitions) all the tools necessary to deliver an end-to-end experience from within that platform.
Why it Matters (No Pressure)
Before we get into the specifics, it’s helpful to look at the bigger picture around customer experience (CX) and where it’s headed. In recent years, CX has become an increasingly accurate barometer of an organisation’s prospects.
- More than two-thirds of companies now compete primarily on the basis of customer experience – up from only 36% in 2018 (Gartner).
- By the end of the year, customer experience will overtake price and product as the key brand differentiator (Walker).
Customer-centric companies are 60% more profitable than companies that don’t focus on customers (Deloitte).
Getting CX right has never been more important. Similarly, the pressure on marketing and IT leaders to make the right call, when it comes to selecting the technologies to achieve CX goals, is at a fever-pitch. Consider:
- 84% of companies that improve CX report an increase in their revenue (Dimension Data).
- According to Forrester, execs who can’t link digital initiatives to revenue and expenses will fall victim to reduced budgets and may even risk their careers’.
- 84% of digital experience programs fail
40% of IT leaders say that DX technology is an integral part of their organisation’s strategy, set by the c-suite (DCG Research).
The Future is Open
With customer expectations constantly changing, more and more channels being introduced and a dizzying 8,000 (and counting) different martech solutions in existence, trying to predict what DXP capabilities your organisation will need in the next 3-5 years is becoming increasingly impossible.
Removing the guesswork (and risk) from long-term tech investments is also the reason that open DXPs are becoming the clear choice for organisations looking to future-proof their choices. In fact, a recent study revealed that 70% of IT leaders ‘disagree with a single-vendor approach to DX’ and 33% actively prefer ‘best-of-breed’ vendors for DX technology point solutions (DCG Research).
Even industry experts admit that open DXPs offer a more reliable CX proposition for organisations, with Forrester stating that native solutions win easily in DXPs as “products joined by mergers and acquisitions frustrate customers because they have to force-fit the product integrations.” Instead, open DXPs take the approach of embracing, rather than trying to reinvent, best-of-breed solutions and allow marketers to adopt and integrate the very latest digital tools to keep up to date with CX expectations.
Top 5 Benefits of an Open DXP
- Multi-experience – Keeping up to date with emerging technologies isn’t easy. Many of the technologies we deem essential in a DXP today, were fledgling concepts five years ago. Furthermore, “By 2021 at least one-third of enterprises will have deployed a multi-experience development platform to support mobile, web, conversational and augmented reality development” (Gartner). Instead of hoping that today’s DXP purchase will deliver tomorrow’s experiences, an open DXP enables you to embrace innovative new tools, channels and mediums as they become available.
- Best of breed – The ability to integrate your DXP with the latest, most innovative digital tools will effectively keep your platform at the cutting-edge of CX capabilities. Instead of attempting to be a ‘jack-of-all-martech’, open DXP solutions focus on being the best at connecting the customer experience and integrating with the best possible tools to enable that. Squiz DXP currently offers a library of more than 100 integrations, including new releases such as Mixpanel and Hotjar.
- Cost and consistency – With budgets under more scrutiny than ever, putting forward a business case or calculating ROI for a new DXP is commonplace in most industries, particularly government and the public sector. A big factor in ROI is ongoing costs – which is where closed DXPs often start to spiral. In fact, Gartner predicts that, through 2021, 85% of the effort and cost involved in a DXP program will be spent on integrations with internal and external systems, including the DXP’s own, built-in capabilities (CMSWire). At last year’s Squiz Summit, Squiz’s Chief Product Officer, Matthew Adney, revealed its plans to cut the cost of integrations by 50%.
- Agility – Decreasing time to market is key to improving CX. The ability to identify a customer need and provide a solution that meets it - quickly - directly impacts an organisation’s ability to compete. Speed is the reason that “By 2024, low-code application development will be responsible for more than 65% of application development activity” (Gartner). Closed DXP buyers are often left trying to custom-build integrations which are, as discussed, costly but also extremely time-consuming.
- Freedom to innovate – If you can integrate with almost any martech systems to grow and improve your CX capabilities, you have more choice and control over what your CX looks like. Rather than being restricted by what your closed DXP can offer, you can decide which tools will offer customers what they need – and have the freedom to use them as part of your DXP.
Closed DXPs try (and often fail) to piece together all the parts under one roof, resulting in undue complexity and high cost of ownership. The concept of a single vendor DX, while tempting, is simply unrealistic. In fact, a recent report revealed that many IT leaders consider the scope of DX to be too broad to be achieved by a single vendor and the concept itself to be ‘aspirational’ (DCG Research).
Open DXPs, such as Squiz, offer an environment that allows easier system and data integration with other CX technology while accelerating and simplifying the process of orchestrating, creating, managing and delivering omnichannel digital experiences, built on customer insight. In fact, Squiz Connect was designed explicitly to rapidly integrate data and capabilities from your DX ecosystem into Squiz DXP - reducing integration time and costs by up to 50%.
Ultimately, the future is unknowable – which is why open DXPs are becoming the only choice for many organisations. For more information on the Squiz DXP visit squiz.net/dxp.
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