March, 2020 | digitalML
Digital Healthcare Trends and Opportunities Reading Time: 5 minutes

Digital (and disruptive technology) is opening up huge opportunities for Healthcare payers and providers, but the future is still very unpredictable. Similarly to other verticals, we’re seeing increased internal and ecosystem demand for access via APIs and (beginning to see) disruption by both Health/Insurtech insurgents and non-traditional players (e.g. big tech such as Amazon entering Healthcare). As a result, the majority of incumbents are now accelerating their digital strategy, including putting out their digital/transformation roadmap/customer journeys.

The big drivers in the move to digital Healthcare and Health Insurance are:
And Digital is not a once and done transformation process – it’s a continual evolution and adaptation of new trends and technologies. IDC says that only about 40% of companies are “Digitally Determined” (i.e. committed to ongoing transformation through both strategic and operational/technological changes) – so what can the rest do to keep up?

Let’s take a look at some key healthcare trends payers and providers are focusing on when it comes to digital:

Healthcare Digital Transformation/Digital Enablement and APIs

No one knows quite what’s going to happen when it comes to Digital in the Healthcare industry, but there are some great opportunities – and one thing which is for certain is that they will be enabled through APIs.

One opportunity is for better and more affordable care for customers. This TEDx talk covers a great use case:
This would not be possible without great public and partner APIs, and a connected data ecosystem, enabling various services and touchpoints (GPS, PBM, delivery network) to be seamlessly integrated into one great (and affordable) experience.

This example only covers one opportunity for Digital in Healthcare – the list is ever growing, and on the whole they go way beyond cost savings. What’s important is for incumbent Healthcare companies to become adaptable and responsive for whichever trend(s) becomes big. Most likely these trends will be proven by insurgents who can combine healthcare leadership with technology and a lack of technical debt and legacy systems to move quickly, as we’ve seen in Banking for example. The best way for incumbents to become ready to jump on these newly proven trends is to focus on encapsulating their existing business and IT functions as reusable business building blocks (represented as APIs), so that they can move quickly when the time comes and rapidly reconfigure new offerings based on what they already have.

Once they have built out their portfolio of business and IT capabilities, large healthcare companies are able to stand up both internal innovation and meet increasing internal and ecosystem demands for access via APIs – in a real-time and continuous way. With the platform and automated processes in place, they can create new, re-purpose, update and extend, bundle, approve, and deploy products and services (made up of APIs and Services) in days instead of months. Two great examples are Anthem and Kaiser Permanente’s responses to the current coronavirus outbreak:

Health Insurance as a Service/Platform

If we again look to banking as the best example of this, Digital has enabled core business functions to be carved out as standalone products and be rapidly launched by nimble innovative companies – e.g. money transfer or branded credit cards. We have yet to see this trend really develop in Healthcare, but there’s a hoard of Lines of Business capabilities that could become separate standalone unicorns.

A great example to look at within the Healthcare vertical is Pharmacy Benefit Management. 10 years ago, there were at least 5 standalone PBM companies in the US that were ranked in the Fortune 500 – almost all of them have now been acquired by Health Insurance payers. And so now, if you’re a large payer or provider, and you don’t want to pay one of your competitors for PBM, you could either create your own (like we’ve seen Anthem do with IngenioRX), partner with an Insurtech, or wait until someone else launches one. Either way, winners will be the ones who can move quickly, and integrate into evolving ecosystems.

Health Insurance as a Platform could also be a major trend in the industry – like a digital marketplace for healthcare functions. Again, winners here will be the ones who can encapsulate existing functionality as a set of ready to plug and play, standardized, and well-designed APIs.

Healthcare IT Modernization

Modernizing legacy core systems (such as EHR, registration, claims) is vital for large Healthcare companies to become responsive not only to the changing digital world, but also ever-changing regulation and directives.

Many Healthcare incumbents are already in the process of IT Modernization, and one aspect of this is the move to cloud. However, there is a major security aspect associated with more and more sensitive data being held in the cloud (not to mention modern data ecosystems where you can’t vouch for the security of others’ data storage). It’s therefore vital to ensure proper governance for all your data at rest and in motion. And there’s the regulatory implications too – large Healthcare companies need to be able to easily show where their data is, who owns it and who consumes it, how many of their APIs and Microservices that use this data are compliant with security protocols and standards.

So, what can Healthcare companies do to become “Digitally Determined”?

There’s no doubt that the future of Digital is unpredictable for Healthcare – there are many opportunities and possible trends for new value pools/products/lines of revenue. So, what can incumbents do to become “digitally determined” and responsive, for wherever Digital goes? We have a few recommendations based on our existing partnerships with large Healthcare companies:

  1. Be realistic about where you are in your Digital Transformation journey – it’s an ever-evolving process, not once and done
  2. Design your business for the way it should be, not the way it is now – both from a strategic and operational/technology perspective
  3. Build out an abstracted layer of business and IT functions, enabling you to plug and play into whatever digital opportunity you want to, and do so in a cost and time saving, and new-reality (more digital and more collaborative) way, while providing a great seamless customer experience
  4. Provide a force multiplier for hard to find talent – particularly, bring developers out of point-to-point integration/data transmission work so they can focus on big-brain activity that delivers real business results
A mature API strategy digitally enables large Healthcare companies

For information on how you can use a platform like ignite to deliver on these recommendations, check out our industry page.
API Catalog vs Holistic API and Service Catalog Reading Time: 5 minutes

In this post, we’ll take a look at the traditional API catalog (as part of a runtime API Portal/Developer Portal), and the limitations it has for large organizations looking to mature their API strategies in support of digital initiatives. We’ll also discuss how an alternative solution – a Holistic API and Service catalog (with API and Service abstraction), sitting upstream of CI/CD and runtime, better supports this use case.

Who needs to catalog their APIs and Services?

Most enterprises are now focusing on developing new internal and external APIs to mature their API First strategies and support initiatives like digital transformation, IT modernization, and innovation. Therefore, they need a central location for all their APIs and Services (with rich metadata surrounding each), to ensure they are discoverable, reusable, and properly governed. This is where a catalog comes in.

The API catalog – what is it, and what are its limitations?

An API catalog is traditionally implemented as an element of an API Portal/Developer Portal (often as part of an API Management Platform), to serve as a library for an organization’s approved external (public) APIs. These APIs are held with documentation and other information, to make consumption by other developers easy. This is great if you only have a handful of external APIs in your organization. However, the reality for many organizations, especially large enterprises, is that they require 1000s of external and internal APIs (and other types of Services) to expose existing functionality in support of digital initiatives like innovation, IT modernization, and digital transformation. A runtime API catalog as part of an API Portal/Developer Portal has major limitations for this use case:
Thankfully, there is a better option, which sits upstream of CI/CD and runtime – a Holistic API and Service Catalog.

Other approaches to API and Service Catalogs

You may recognize several other approaches to cataloging APIs and services:
These service catalog options each have their limitations for large organizations who are trying to build and manage the 1000s of APIs and Services they need (you can find more detail on these in our whitepaper).

What is a Holistic API and Service Catalog? How is it different from an API Catalog?

There are 3 key differences between an API Catalog and a Holistic API and Service Catalog:

1. The holistic catalog is for ALL your digital assets

Unlike a runtime API Catalog, a Holistic API and Service Catalog allows you to import, organize, and manage all your digital assets:
In addition to this, each asset is surrounded with rich metadata and aligned to business/technology taxonomies (at both the Specification and Method level) for discoverability and rationalization.

2. APIs and Services are abstracted and held as Designs

With traditional API Catalogs as part of a runtime API portal, your APIs are held in runtime- and implementation-specific code, whereas with a Holistic API and Service Catalog, APIs and Services are held as abstracted Designs. Abstracted Designs are a separate artifact, and are code- and platform- agnostic views of your Services, which represent your business and IT functions. They contain important metadata and a target state of abstracted functions (what the API or Service does/will do (e.g. create, read, update, and search)). Designs also contain Specification(s), which are the representation of the Service, and contain all the technical details and further metadata (e.g. NFRs, lifecycle state, service owner).

3. The Holistic API and Service Catalog sits upstream of you CI/CD and runtime systems

Unlike an API Catalog, a Holistic API and Service Catalog sits upstream of runtime and CI/CD. It has a unique spot in an integrated velocity framework, acting as a bridge between upstream workflows such as Domain Driven Design (DDD) and Product/Project requirements outputs, and downstream CI/CD and platforms, through direct integrations.

Key benefits of choosing a Holistic API and Service Catalog

There are 5 key benefits of using a Holistic API and Service Catalog as your primary catalog over a runtime API Catalog:

1. Coverage – By importing all your APIs and Services into the Holistic Catalog, you’re exposing gaps, reporting on business coverage, showing the groups that are most influential, if your Services are meeting standards, and the interactions between them.

2. Discoverability of APIs and Services
– As you capture all the details surrounding the APIs and Services (e.g. alignment to business/technical taxonomies, lineage and inter-dependence), assets are easy to discover and understand at various levels of granularity.

3. Reusability of APIs and Services – Your APIs and Services are arranged as bundle-ready building blocks, representing your business and IT functions. These building blocks can be approved for reuse, and can be leveraged to enable self-service bundling into new Product Bundles for new digital products. The Holistic Catalog of bundle-ready building blocks helps reduce duplication, and also helps widen the audience of your APIs and Services throughout the enterprise. Time- and cost-to-market are massively reduced, supporting the successful delivery of key initiatives such as innovation, IT modernization, and digital transformation

4. Governance and Standardization of APIs and Services – The fact that you’re holding APIs and Services as abstracted Designs, coupled with the fact the Holistic API and Service Catalog sits upstream of the CI/CD pipeline, enables governance and standards to be baked-in and applied throughout the API and Service lifecycle (and the catalog supports other API governance best practices too), generating normalized code and providing scale in a consistent way to deliver APIs and Services

5. APIs and Services become futureproof – Your system of record for your APIs and Services is no longer code, it’s now the abstracted Designs. This means you’re adaptable for any future technology shifts (e.g. the move from SOAP to REST) – your assets are future-proofed and free from technical debt.

By choosing a Holistic API and Service Catalog with abstracted Designs over a runtime API Catalog as your primary source of truth for your APIs and Services landscape, you’re setting up your enterprise for success. With all your assets in the holistic catalog aligned to business/taxonomy standards, properly governed and standardized, surrounded with rich metadata, and organized as reusable bundle-ready building blocks, you’re able to become a responsive digital business. You’re able to rapidly mature your API first strategy and deliver on key initiatives like innovation, IT modernization, and digital transformation.

For a deep dive on the Holistic and Abstracted API and Service Catalog

For more information on the Holistic Service Catalog, how it works, and the value it brings, check out our free whitepaper here.

The whitepaper covers:

APIs as a Platform for Business Transformation Reading Time: 5 minutes

Recently, we hosted a webinar on APIs as a Platform for Business Transformation with guest speaker, Randy Heffner, VP and Principal Analyst from Forrester Research. Randy and our CEO, Jeremy Sindall, had a great discussion on how business capability APIs can help support rapidly re-configuring your enterprise to create new business models, reach new markets, optimize processes, and support customer journey’s by launching new innovative products. It was a great session so we thought worth recapping, as well as sharing some great questions that came through from our audience which might help those on their own digital transformation journey.

What we learned about digital business transformation

We learned the leaders who are doing transformation right are the ones who have the viewpoint that we’re always in a state of digital transformation. Randy, stated “the better way to think about [transformation] is that digital transformation is entering into the realization that the future is virtually unpredictable.”

With that new reality, you need sustainable business agility in order to move in new directions for new revenue streams, support new business models, implement new strategies, come up with new ways to reach new markets, and you need agility that is sustainable over time so you can keep changing and make changes that don’t get in the way of future changes. During the course of the webinar, we heard how business APIs support this huge organizational shift needed.

Business APIs, as part of an API platform, are the way to business transformation

According to Forrester, “if you’ve been thinking about APIs as a technical thing, you’re missing the boat; because APIs are fundamentally a business transformation thing.”

These business APIs provide a way of exposing your business capabilities as business building blocks, essentially unbundling your business to become and open business.

I’d suggest listening to the recording, it was a great representation of the goal state organizations should be working towards in order to reach a digital maturity that allows them to modernize IT and be digitally innovative at the same time.

Since then, we’ve heard lot of positive feedback from both our customers and others currently on the digital transformation journey. The vision presented by Forrester and digitalML resonated well with those organizations and aligned closely to their own visions. However, some have also expressed to us that they feel quite far away from that and would like a guide on how to get there. We’re working on that for them, but in the mean time we wanted to provide a general framework for those in the same boat along with answer a few questions that came through during the session.

Steps for setting your organization up for digital transformation:

Step 1 – Build a holistic catalog of APIs and Services

A holistic service catalog is a key first step we advise organizations to take. Usually this activity takes about 3-6 months depending on if you’re importing brownfield or mainly supporting greenfield development.
A holistic catalog of designs and services should be aligned to business/technology taxonomies – providing deeper insight into rationalization of services and interfaces across application and processes – information security policies, architecture patterns, lineage/ interdependencies, discoverability, versions and status, consumers/consumed by, maturity model (of service type, technology, region, ownership, security model plus scoring for faster auditing), and API Product Management ensuring service discovery and reuse is reliable.

Step 2 – Incorporate full service lifecycle with governance baked in

Once you have your catalog, you can identify gaps, and prioritize which services to build out first in support of business goals.

Question: How are you seeing companies prioritize what to build and what to make available for reuse, what to transform from legacy to new?

Answer: “The wrong way is to say here’s all these APIs we can have, let’s go build them. Much better is to do some quick thinking about the candidates so that you have an understanding of the space and how you might evolve a coherent set of APIs in a space. But wait until you have a business initiative that needs those capabilities and then say ‘ah now we have a much better context for designing that API’, but design it making sure you’re not designing it for individual specific scenarios. So drive from what the business needs and that’s the most successful API strategy for prioritizing which to build when,” Randy Heffner.

digitalML explains that people will be surprised that you have a lot of APIs already that can be abstracted and normalized and rapidly turned into business building blocks so you’re not starting from scratch. It’s a combination of planning your portfolio and top down driven prioritization while accommodating bottom up development, ensuring consistency and standardization that helps you start cataloging and building up your abstracted functions.

Question: Organizations are realizing they have a need to scale up to a number of APIs that support their business, do you have a recommendation on how many they need?

Answer:  “Commonly as I talk to clients, I hear things like 700, 900, 1200. But a good comparison for someone to understand this is to look at something like BIAN’s APIs for banks and how they define those, look at how many there are per major business capability in that model and translate that for your own business. That would give you a way of looking at it or giving you a reasonable approximation,” Randy Heffner.

digitalML agrees with that number and adds that if you shift to microservice architecture you’ll need a number beyond that. Typically our customers have around 19 domains representing business functions, four levels deep x 10 APIs each which is 760 + system functions.

Step 3 – Federate and Scale

Roll out across your organization so both business and IT have access to a single source of truth of your business capability coverage, integrate into your CI/CD and runtime platforms, fill talent gaps, and maintain API governance and standards on your bottom up development. 

Question: How is this approach different than building external APIs?

Answer: “Certainly having a dev portal and APIs is part of or can be part of this strategy, but the center point is not just I have some kind of API let me make it available to somebody, but it is a rotation to a much deeper focus of what kinds of APIs provide the greatest business agility, the greatest business value and then building the right collaboration processes and providing the capabilities around that to make sure we’re enabling business agility vs just doing some interesting things via a dev portal,” Randy Heffner.

Once set up for rapid reconfiguration, API platforms support sustainable business agility

The benefit of focusing on those three areas is that you’re quickly in a place to then transform your organization, no longer needing to pick between this initiative or that one and getting your organization to work more collaboratively over a catalog and process all can understand. In the webinar we showed how you can use your holistic catalog to launch a new business idea that is a reaction to fintech competition like being able to offer a global money transfer solution. But that’s just one of the many quick reactions and initiatives your organization is able to then realize. Often times our customers are concerned with IT Modernization needs like moving to the cloud, retiring back end systems, or adding/changing runtime environments and at the same time they’re supporting digital innovation with a catalog of reusable building blocks that speed up the time to launch new digital products.  

Again, we recommend listening to the full webinar to learn why API platform business is the best foundation for sustainable digital transformation, best practices for designing, building, and evolving a business platform, and the value of a holistic and abstracted catalog of APIs and Services. You can download it here.

How to Deliver Insurance and Other Digital Insurance Trends Using APIs Reading Time: 7 minutes

Technology and Digital have opened up new opportunities for the insurance industry, but also make the future uncertain for large insurance companies. In this article we’re discussing 5 trends for digital insurance, and ask some important maturity measures for those looking to implement a successful digital strategy. The trends we’ll be looking at are:

Trend 1 – Open Insurance or API Insurance

Open Insurance through APIsOpen Insurance, also known as API Insurance, is a trend gaining traction throughout the industry. Similar to the open banking movement, it involves the move to a connected data ecosystem, powered by open and partnership APIs. Large Insurance companies are looking to establish API platforms and expose their data and products to, and integrating with, third-party providers such as Insurtechs, big tech etc. – providing mutual growth and enabling new business models and revenue streams. A connected open API ecosystem also allows them to integrate data from elsewhere (think Uber using 3rd party Google Maps API as an example) to offer new services.

One of the open API insurance movement’s primary drivers is increasing customer demand for personalized digital insurance options with more touchpoints. We’re now in an age where consumers expect a frictionless digital experience, with policies tailored to their specific needs instead of a one-size-fits-all approach, and they’re not afraid to take their business elsewhere if companies can’t meet these demands (see later trends for more on new business models and distribution channels).

While the open/API insurance trend is still in its early stages, there are a few examples of successful API ecosystems already established. In 2018 Allianz launched a platform (both open source and enterprise versions) with parts of the Allianz Business System (ABS), to aid with the challenges of digitization and offer a marketplace for sharing services throughout the insurance industry.

And it’s not just incumbents looking to capitalize on open insurance with API platforms. In 2018 the established Insurtech Lemonade launched its open API, allowing its policies to be sold through any third-party websites or apps.

Maturity Measure: to deliver open/API insurance, are you…

Focusing on building a handful of well-designed and documented public APIs, or focusing on building 1000s of APIs (internal and external) encapsulating your business and IT functions, to be able to fully participate in the open API insurance connected ecosystem?

Trend 2 – Insurgent Business Models

Diagram showing reusable API building blocks being reconfigured to support UBI, P2P, and Microinsurance business modelsAccording to Business Insider Intelligence’s recent report, we’re now at a stage of insurance disruption that involves the adaptation of underlying business models. Enabled by a combination of technology and increasing customer demand, some prominent new business models we’re seeing are:
All are aimed at providing consumers with personalized product options, tailored to their needs instead of a one-size-fits-all approach we’ve seen with traditional insurance models.

This trend is now evolving in 2 ways. The first, is incumbent insurers adopting these insurgent business models, e.g. the new Milewise policy from Allstate in the US with a per-mile rate, as well as more traditional telematics-based UBI like AXA’s Flexidrive in Asia with up to 20% discounts for good driving behaviors.

The second evolution of this digital insurance trend is that Insurtechs are now capitalizing on their insurgent business models by moving from being managing general agents (MGAs) to full-stack insurance companies – to challenge incumbents head on. For example, there are now 5 full-stack Insurtechs in the USA alone – Metromile, Root, Oscar Health, Lemonade, and Next Insurance.

As this trend evolves, we expect to see even further pressure on insurance incumbents to rapidly deliver innovative new products, in support of these insurgent business models, and to meet consumer expectations.

Maturity Measure: to deliver insurgent business models e.g. UBI, P2P, and microinsurance, are you…

Able to expose your existing functionalities as a set of normalized and standardized APIs, approved for reuse as bundle-ready digital building blocks to deliver innovative and personalized products to customers?

Able to support not only current insurgent business models, but poised to be responsive and move fast for whatever comes next?

Trend 3 – Data and Analytics (IoT etc.)

Specific APIs for AI, RPA, Internal, and External APIsConnected devices, the Internet of things (IoT), Artificial intelligence (AI), mobile technology etc., are providing insurers with detailed data and analytics which can be leveraged not only to provide better products to customers, but also to reduce operational inefficiencies and associated costs. A few examples of both incumbents and Insurtechs leveraging this trend include:
Robotic process automation (RPA) is another big area for the application of AI and data for insurers. It involves the automation of routine tasks (and at an advanced level combining cognitive capabilities) to drive business results. According to Deloitte, “the IT-enabled RPA market has been growing rapidly at a CAGR of 60.5% from 2014 and is expected to reach US$5 billion by 2020” – so a highly important trend for the industry.

The real success in this trend will be when insurers can leverage data and analytics throughout the value chain, encompassing all the areas we’ve discussed – connected data, analytics and AI, and RPA (or better still R&CA).

Maturity Measure: to deliver results from data and analytics, are you…

Able to facilitate connected data and analytics throughout the digital insurance value chain, through a set of well-designed APIs exposing your data, and integrating data from elsewhere?

Trend 4 – Data Privacy and Governance

API GovernanceRegulation around data privacy has been a growing trend across many geographies, at a huge cost to insurers who operate in those regions. Of course, the EU’s General Data Protection Regulation (GDPR) has now been in effect for nearly 2 years, while the California Consumer Privacy Act (CCPA) came into effect in early 2020 (and looks to be setting the pace for other state legislation, with New York looking to be next in line.

Meanwhile, large insurance companies are moving more data to the cloud as part of IT modernization efforts. These combined factors mean it’s critical for insurers to be able to ensure their data is secure and properly managed (and exposed only to the appropriate consumers) if they are to continually move into the digital economy. Failure to do so can result in hefty fines and reputational damage (for example State Farm’s huge data breach in 2019).

Maturity Measure – to comply with data privacy and governance, are you…

Already undertaking a comprehensive information governance program (for data at rest and in motion)?

Able to report (on an ongoing basis), on the compliance of your data flowing through APIs and Services? Who owns what, where it’s consumed, the flow of data etc.?

Trend 5 – Insurance Distribution Channels – Direct Distribution

Reusable API building blocks to support Direct distribution and other distribution channelsDirect insurance is a distribution trend that’s growing more as insurance becomes more digital. McKinsey reported that direct insurance as a distribution channel has grown across NA, EMEA, and APAC, particularly in Eastern Europe.

Meanwhile, PwC says that in a recent survey of US consumers, more than 32% of US respondents – and 50% of those aged 18 to 25 – said they prefer to work directly with insurance carriers. These Gen Zers will be the next generation of insurance customers, so it’s critical for large insurers to be able to support multiple distribution channels, beyond traditional brokers and agency models.

Maturity Measure: to support growing distribution channels e.g. direct, are you…

Able to integrate your business and IT capability APIs into alternate distribution channels?

Already supporting direct insurance as a growing distribution channel? If not, how quickly can you respond to this and other growing distribution channels e.g. bancassurance, aggregators, super apps?

While this list of insurance trends is by no means exhaustive, one thing is for certain – large insurers need to become modern digital businesses to excel in this new age of connected data, technology and ever changing trends. But how do they do it? Most are slowed down by tech debt-heavy legacy systems, information silos, and hard-to-find talent (especially when it comes to superstar developers and product managers). Many have already embarked on some level of digital transformation program, often focusing on API First strategies. The key to success is to rapidly mature your API strategy by encapsulating your business and IT functions as a set of abstracted, well-governed, and reusable APIs.

The ignite platform from digitalML helps large insurers transform into digital businesses to become as nimble as digitally native startups, without having to start from scratch. Visit our insurance industry page for more information on how the platform supports initiatives like innovation, IT modernization, and compliance and data security.