Digital Transformation Success Requires an API-Centric Approach: IDC Report Findings

API Strategy

Digital Transformation Success Requires an API-Centric Approach: IDC Report Findings

·  3 Min Read

Key findings from IDC’s API-centric digital transformation report.

digitalML recently sponsored a report with IDC on how Digital Transformation Success Requires an API-Centric Approach written by Shawn Fitzgerald, Research Director, Digital Transformation Strategies. While we recommend reading the report in its entirety (you can download it here), there were a few interesting finds that we wanted to highlight for our blog readers.

IDC has identified that a divide exists between organizations that are successfully digitally transforming and those that are struggling. They group organizations into one of two categories, the digitally determined or the digitally distraught. Digitally determined organizations have:

  • An integrated enterprise-wide digital strategy
  • Embedded digital transformation into their organizational structure
  • Digital transformation (DX)funding from their capital budget
  • Enterprise-wide integrated digital platform

Digital transformation is worth the investment: digital leaders see increased revenue and operating profit

IDC’s research shows publicly traded companies that are digitally determined and have realized digital transformation maturity have grown their revenues by 92.9% and operating profits by 97.1% on average, from 2013 to 2018. In contrast, digitally distraught organizations have seen their revenues and operating profits contract, on average, by 3.3% and 1.1% respectively.

Digital transformation success depends on 3 central qualities

What’s also interesting is that there’s three central qualities that digitally determined organizations share:

1. Comprehensive digital strategy: 37% of enterprise organizations have a cohesive digital strategy spanning the entire business.

A company’s digital transformation approach goes beyond the current financial year with a multiyear commitment; there is also an emphasis on change management and integrated and continuous enterprise wide DX innovation. Additionally, there is a longer-term investment plan, and the enterprise strategy is to use DX to transform markets and customers by creating new business models and product/service experiences.

2. Enterprise implementation plan or roadmap: 55% of digitally determined organizations have this roadmap versus 20% of digitally distraught organizations.

Business transformation is aligned with a set of comprehensive digital transformation technology investments that organize, align, and prioritize the sequence of integrated technology and business transformation.

3. Integrated digital platforms: 66% of digitally determined organizations are investing in solutions versus only 20% of digitally distraught organizations.

Digitally determined organizations are investing in a digital platform that services their network of connected customers, internal users, partners, and suppliers, which use and pay for information and services provided through the platform. This digital business approach is powered by a fully integrated enterprise-wide technology architecture enabling digital products, services, and experiences. Simultaneously, digitally determined organizations are able to digitize their organizations (i.e. modernize, integrate, and scale their internal IT environments).

Organizations need both a comprehensive digital strategy and roadmap, as well as the means to implement that plan via integrated digital platforms, or what digitalML often refers to as a “velocity framework”.

A digital platform ties your strategy together and enables your digital transformation

A digital platform provides the foundational approach and framework on which digital leadership relies. The digital platform provides an agile and scalable layer of connectivity to help take advantage of technology investments.

IDC research shows that scalable API-centric approaches to creating digital process code and digital-centric culture, both reduce the effort it takes to digitally transform, and increase the speed at which an organization can transform.

And, so do APIs. APIs and an API First strategy helps accelerate DX

API-oriented programming also improves the velocity at which digital transformation occurs; due to the benefits from how new APIs leverage standard work previously developed and deployed. Further, technical employees with subject matter expertise have capabilities that benefit nontechnical employees, functions, and processes.

A maturing API development environment confers another benefit: It enables an enterprise to accelerate and scale digitally into an agile and resilient business. Digitally determined organizations are delivering superior digital products and services because of their ability to expand their APIs and related API lifecycles to business and product owners.

digitalML customers are using ignite as their digital platform to enable API maturity through a mature development strategy process and an extended API lifecycle.

“ignite creates a force-multiplier platform for combining capabilities”

The ignite platform addresses completeness gaps between the API catalog and the service lifecycle management catalog as part of a componentized architecture. The platform helps provide scale and a consistent way of developing the needed APIs/services that unlock value from data and create synergies with internal and external partners. It can help with enabling faster and cheaper decoupling of large monolithic code into microservices and APIs, to develop new digitally native services more quickly.

Interested in the full report? Download it here.


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