From an omnichannel overhaul, to a value chain digitization, to a data analytics upgrade, the expanse of digital transformation projects that businesses might undertake can be a little overwhelming. Where should they invest their dollars when there is so much to do?
Frequently, enterprises seek out the low-hanging fruit in these initiatives. They want a relatively simple project that can get them a big bang for the buck. And more often than not, the answer involves using the application program interface (API) to expose their data, products/services and digital infrastructure to third party developers.
“Expose” can be a frightening word when it comes to proprietary data and digital assets. However, a self-service API layer can selectively open up only the necessary parts of their back end systems, allowing outside developers and niche startups to build innovative experiences and new offerings around their products and services. Often these experiences and offerings reach customers that the company itself may never have discovered.
For example, during an omnichannel overhaul for a large retailer an API was put in place that allowed third-party developers to gain access to the retailer’s catalogue, pricing and supply chain information. These developers found innovative ways to spread this retailer’s products to new markets:
• A niche app serving gardening enthusiasts brought this retailer’s gardening products directly to their customer base
• A professional networking site for contractors made it easier to get materials costs and build estimates
Clearly the developers benefited by making their own products and services better, and they also got a percentage of any revenue they helped generate. For the retailer, with their product information spread widely into new markets, they brought in more than $1 billion in new revenue.
Scale Out, Not Up
This process is called “scaling out” rather than “scaling up,” because aside from the technological investment for implementation, there’s nothing else to add. No new products to develop, no new physical locations to grow to, no added promotional or human resources investments.
APIs are not just for retailers; they are vitally important in the travel industry, connecting airlines, hotels, taxi services, car rental companies, local restaurants, and more. Beyond cross-pollinating the goods and services for all these businesses, it makes the customer experience far easier and more efficient, from booking to check-in to identifying entertainment options.
APIs are also being embraced by major banks, several of which have created a strategy that enabled them to expose certain data (historical and aggregated) to only a rather select developer community.
The Open Bank Project API platform is now shaping up to be an “App Store” type of platform where developers and entrepreneurs can build innovative apps that can connect to any bank API that adheres to its standards. Some benefits:
• Banks are opening up things like treasury services to their partners, who can use the bank’s infrastructure and back-end services to create fresh offerings and products.
• Entrepreneurs are offering their products and services using their own eWallets. Banks are exposing eWallet APIs, which the partners/entrepreneurs can “white-label” for personalized experiences.
Do More With Less
The API revolution goes hand-in-hand with other modern phenomena such as open source programming, crowdsourcing and the sharing economy. The fun thing about implementing APIs is that once businesses take the leap, they then wait for the results as the entrepreneurial developer community does the work for you. They build innovative systems and experiences that are powered by your business’s deep domain expertise, customer insights and optimized core systems.
These projects are moving at lightning pace, and early adopters will be the biggest beneficiaries. If your company has not already done so, it’s time to pick the low hanging fruit.
(About the author: Radha R is executive vice president and head of digital business at Mindtree)
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