How to future-proof your business with API-driven innovation
- Chamin Dias
- Associate Lead - Marketing - WSO2
Today’s consumers demand digital customer experiences that are responsive, secure, scalable, and “always-on”. The pivot to digital means that activities like ordering food, booking a taxi, or even retail purchases now revolve around quickly meeting the expectations of digital audiences.
In this “digital age” — where almost every company has had to rethink their approaches for doing business — we see that those that have been successful have embraced change not only in organizational structure and processes but also in technology. Moreover, the pandemic has pushed enterprises to speed digital initiatives from years to months as remote working, conferencing, and learning have become part of the new norm.
Ignoring innovation comes at a heavy price
Due to the changes in the marketplace (i.e., doing almost everything digitally), businesses have no option but to respond accordingly. Today, consumers can look for alternatives with just a few clicks on their smartphones for any service. In order to survive and thrive, businesses need to innovate and respond to market demands as quickly as possible.
Here are some recent examples of brands that did not innovate and adapt quickly enough.
We remember Kodak [1]—which produces various products related to its historic basis in analog photography—as a brand that dominated the photographic film market during most of the 20th century. The company was particularly well-known for its film rolls. However, digital photography using smartphones and digital cameras became popular and Kodak was left behind. Today, we rarely see the company mentioned in discussions or product mentions about digital photography.
Figure: Innovation is key to business sustainability
Another example is Nokia [1], which is a Finnish multinational telecommunications, information technology, and consumer electronics company. Nokia was popular for its range of mobile phones during the late-1990s and early-2000s and was the market leader in a number of segments. However, the company failed to adapt to the significant changes in the user experience and mobile software landscape. Other phone manufacturers took advantage of this and captured a significant amount of market share with their user-focused offerings.
This Forbes article [2] looks at the demise of Blockbuster, which was an American-based provider of home movie and video game rental services. The company ignored video streaming and failed to leverage the potential that this new approach provided. Netflix, which is today a subscription streaming service and production company, [1] took over and became one of the largest service providers in the video streaming industry.
Figure: Innovation leads to business and financial growth
The key takeaway is that failing to innovate can bring about significant negative ramifications for your business.
APIs: the secret to speed innovation
Today, application programming interfaces, more commonly known as APIs, have become critical to achieving agility, profitability, and new revenue streams. They are the building blocks for digital transformation, powering mobile apps and websites, software-as-a-service (SaaS) products, and enterprise integrations.
But tech companies are not the only ones who can reap the benefits of APIs — there are opportunities everywhere. While some sectors are being compelled to offer APIs due to regulation (like healthcare and banking), others are leveraging these owing to industry interoperability (like telecommunications) or to bring about disruption (like entertainment, retail, and media).
In addition to the above facts, APIs help to reap additional benefits such as speeding go-to-market times, improving developer productivity and velocity, and, most importantly, unlocking innovation. There is a strong connection between digital innovation and APIs.
APIs enable enterprises to expose a business functionality to unlock the true value of the digital assets, create business agility, and promote innovation and collaboration. This is supported by the findings of a recent Forrester survey as well [3].
The advantages of using APIs in business
Using APIs for business provides some unique advantages. They help organizations to accelerate their digital strategies by strategically deploying API-first services to take advantage of new opportunities, often without leaving legacy code behind.
Cost-saving and generating more revenue is the objective of every business. APIs help to significantly reduce the development effort by enabling re-use. Developers do not have to do everything from scratch since they can fetch most of the functionality they need to create systems. This leads to significant cost reductions and faster delivery cycles (and more revenue to the company).
Increased productivity is another benefit of API-based businesses. A recent study [4] shows that enterprises that leveraged APIs recorded a significant increase in productivity of 59% across several key parts of their businesses. Also, there is increasing demand for novel software solutions and this means that companies must innovate and implement faster. Using APIs is one of the best ways to increase productivity.
The ability to rapidly develop new product features is key to a successful innovation strategy. This can also be achieved with APIs as well. Properly wrapping up an organization’s business functionalities and exposing them as an API will assist the larger (developer) community to create applications on top of them.
Last but not least, APIs enable enterprises to supercharge innovation. According to this article [6] by salesforce, 88% of customers expect companies to accelerate digital initiatives due to COVID-19. A recent Gartner article also expresses similar findings [5]. Simply put, APIs allow enterprises to solidify their competitiveness, differentiation, and efficiency.
Closing thoughts
Consumers now demand novel solutions to their problems each and every day. In order to succeed in today’s highly competitive environment, businesses need to find innovative ways to meet market demands. At the same time, they need to expand their boundaries.
From a business perspective, APIs are proven in bringing continuous and effective innovation for businesses. API-driven business models have many advantages not only for owners but also for consumers as well.
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[5] https://www.gartner.com/smarterwithgartner/apis-are-at-the-heart-of-digital-business
[6] https://www.salesforce.com/resources/articles/customer-expectations/?sfdc-redirect=369