Today’s business leaders are understandably exhausted and stressed. Two years after the pandemic forced them to upend their business models and infrastructure, many are still grappling with how to compete effectively in the digital economy. With an economic downturn looming, business leaders and their teams are again tasked with increasing business resilience while remaining agile to seize new opportunities and grow. This time, however, they may just have a jump-start on achieving both, thanks to their technology investments during the pandemic.
Executives reported an increase in spending on digital initiatives during the pandemic, with many reporting a 65% increase since 2020, according to a recent EY-Parthenon study. Because of these pandemic initiatives, fueling growth and increasing efficiency doesn’t currently require deploying significant new or additional technology. Rather, business leaders should assess how they can best optimize their existing digital transformation investments to their fullest potential. In other words, today’s discussions aren’t focused on whether you’re implementing digital transformation, but instead whether you’re doing it right.
Further, every business, as part of its digital transformation journey, has invested in APIs. They are, after all, the foundation for digital transformation. They create a flexible infrastructure that can be adapted and scaled to quickly meet changing business needs. API strategy and digital transformation ROI go hand-in-hand, yet business leaders don’t discuss them in this way as much as they should. In my 25 years supporting digital transformation initiatives for clients, it’s my strong belief—and repeated observation—that businesses that utilize their APIs as more than infrastructure, but also as a business model, drive more ROI from their digital transformation investments. And they often become disruptors in their industries.
There are many ways to advance the use of APIs beyond infrastructure, but the following are what I consider must-haves to maximize digital transformation ROI in 2023 and beyond.
BUILD FOR YOUR CEO
While engineers, and the engineering ecosystem more broadly, continue to be APIs’ primary users, they are no longer the only “customer.” Digital transformation and the APIs enabling it should also be built to fuel a company’s value proposition and business growth, and not be an internal IT-only priority. With this in mind, an effective API strategy is one that is built with the CEO or CFO at its center, because these executives are focused every day on growing the business. It’s common for a company to maintain hundreds of APIs; however, they won’t deliver adequate value if none of them support company growth initiatives or enhance the customer experience.
STANDARDIZE INFRASTRUCTURE TO USE ONLY OPEN APIS
The most competitive and resilient companies operate using an infrastructure consisting strictly of open APIs; they don’t build APIs for internal use only. An open API strategy is a must in today’s digital economy to maximize its usefulness and business potential. To this point, establishing a standard to build every API from the onset as if it is an open API bakes in flexibility, should it be needed. That can allow it to connect to other applications and features or allow it to be used by external developers and partners for mutual value. Companies that don’t standardize on this type of agile infrastructure stifle their ability to quickly and efficiently meet changing business requirements and opportunities.
FOSTER A CULTURE THAT PRODUCTIZES EVERYTHING
Once running a set of open APIs, any process, feature, product, and service has the potential to be “productized,” or packaged and sold as a stand-alone offering externally. That means every API can be considered a product or a representation of a product that can be offered to support other engineers or for end customers. This concept radicalizes the potential for companies to expand their total addressable market and create new, alternative revenue streams. It requires a mindset shift internally to recognize APIs as more than infrastructure that digitally transforms how a company operates and engages with its customers. Every team from IT to marketing should think about how its operations and internal tools can address external market gaps and related needs.
ACHIEVING API-DRIVEN HYPERBOLIC GROWTH
The Washington Post is a great example of how adopting APIs as a business model can transform a company and create alternative revenue streams. The company adopted an open API strategy to modernize its content management system. This provides more flexibility and scale as a result of rising mobile content consumption, increasing demand for video content, and growing online traffic and engagement via its existing digital presence. Executives quickly realized that they could not only modernize their operations to compete more effectively and meet new customer demands for digital content but also license their new digital content management system to other media and publishing companies facing the same challenges. They could (and did) effectively launch a new business unit and revenue stream. The evolution of The Washington Post is a case study of how today’s business leaders can maximize their existing digital transformation initiatives to deliver more ROI and unlock new opportunities.
The past year has again been challenging for businesses and required teams to experiment and adapt quickly to remain relevant. Those that have survived are exhausted, and while 2023 isn’t necessarily going to be easier, the prognosis is looking much better for businesses that have started their digital transformation journey. That’s because they have laid the foundation for an API business model mindset that will strengthen their resilience to market changes and support hyperbolic growth potential.
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