Companies around Australia and New Zealand are designing, adopting and implementing APIs at speed.
However, when APIs are developed quickly, these crucial developments are often an afterthought of a major digital transformation project, or succumb to low-budget funding solutions and ad hoc development. Technology and project leaders across the Tasman are scratching their heads as to how they can communicate the business value of API and integration, in particular cloud connectivity, to their Executive leaders.
And when we realise that almost $1 trillion in economic profitability is available through interconnectivity and integration, according to McKinsey, then APIs that play a key role in interconnectivity become increasingly significant.
Furthermore, as the functionality evolves, APIs will deliver more advanced services such as delivery of machine learning or currency exchange, and API marketplaces and hyperscaler offerings will be more sophisticated to use.
In all honesty, some of the companies that we work with have a small API program and immature integration roadmap prior to engaging with us. Instead of the hundreds of APIs needed for a robust portfolio, most will start with a dozen of APIs that are poorly exposed or known to anyone outside of IT. From a leadership perspective, most executive leaders do not know the organisations API strategy or the true value at stake.
So how do we communicate that value? We recommend the following:
Connect the customer journey to the Executive:
APIs can generate millions in revenue, but business leaders and project fund stakeholders need to understand where to best apply them. Analysing customer journeys are the best way to identify API opportunities, which includes pulling together business and technology professionals into a design thinking workshop where APIs can help resolve customer pain or open up new lines of business.
Often these workshops will result in the requirement to use APIs that pull multiple sets of customer data and product insights to deliver a data driven approach for investment. This also then helps to build a list of APIs required to facilitate new services or customer pain point reduction which can then be mapped back to project prioritisation and funding requests.
Focus on monetization:
Monetization of the API program should be looked at from the lens of internal and external use. Internally, some of our customers are using standardised and repeatable APIs that reduce operational costs and accelerate development, such as using one API for a wide variety of data access tasks rather than building a custom API for each. Externally a focus on the customer journey, as mentioned above, will allow for design thinking teams to understand the monetary value gained or saved by implementing a certain API structure. For example, using APIs to connect to a third party service and then charging that service back to customers is a way to see the API program as being a revenue generator. These types of models based on revenue or profitability increases help to ensure investment at the Board level.
Create an API governance model and team that focuses on compliance and reporting of success
Once an API strategy has been effectively implemented, the business often starts to think differently about partnerships, business models, technology capability and funding. Additionally, new challenges to data and security arise which call for a governance model that oversees API design, management, platform and development. This governance model, often run by a designated group, manages all of the APIs in the organisation while identifying new API capabilities and evolution opportunities. A key function of this group is to frequently report metrics on usage, revenue generated, security compliance and standardisation. Another key function is to manage funding requests and ensuring that there is funding available all year round to maintain the existing API portfolio, while having discretion to jump on new high-value opportunities that emerge.
Finally, making sure that your API strategy, design and program is championed by business leaders and technology SMEs is key to ongoing success and adoption within the organisation. Frequently tracking and communicating wins, improvements, customer delight moments and revenue growth all helps the business to understand the true value of APIs not only as a technology tool, but a business enabler.
If you are interested in running an integration and API design thinking workshop that connects business and technology leaders on the value of an API program, we would love to facilitate this for you within your office or in a remote scenario. In exchange for your time, we will send through an exclusive 3-bottle case of wine for you and your team to enjoy after the workshop - a small treat for all of your hard work.