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    APIs as a Platform for Business Transformation

    March 20, 2020

      |   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.

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    About the Author
    Kelly MaltmanKelly Maltman
    Kelly is Head of Marketing at digitalML. She's responsible for the company's overall brand positioning and communications, but also works closely to support customer's own internal marketing needs, helping them navigate the space, evangelize their API initiatives and craft stories around their successes.