CIOs Seek Growth Through API Programs

Ray Velez, CTO, Razorfish
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In today’s connected economy, business value is generated from products and services that work together, often with other brands and even competitors. Connectivity is also the catalyst that is blending physical and digital experiences. McKinsey, for example, estimates $11 trillion in value will be generated from blended experiences by 2025. Most business models however are closed, something that can be quickly rectified through a well thought-out APIs (application program interface).

APIs are hardly new. CIOs across every sector manage hundreds, even thousands, of APIs within their existing portfolios today. However few of these APIs are positioned to fuel transformative ideas in a connected economy since they were developed for a specific, closed application. The problem is further compounded in that most APIs have not been built with modern Web API practices or within disciplined service governance techniques.

There are several things CIOs can do right now, to generate immediate value from APIs.

Articulate the Value of Open Business Models

Every sector is feeling the competitive heat from companies using APIs to enable new business channels. But many business leaders are uncomfortable with the idea of making assets openly available to external audiences, even customers and partners.

 CIOs can gain efficiencies by exploring new agency partnerships with firms that have pre-existing infrastructures designed to support, develop and implement API programs on their behalf 

CIOs can address the issue with success stories. Barclays’s Accelerator program for example, gives startups access to its APIs to help them build and fine-tune their business models. Saxo Bank makes its trading and back office infrastructure available through an API. Mercedes leverages APIs from a startup known as Nest, which lets customers set the temperature of their homes from their vehicles. And healthcare providers are now using the Walgreens pharmacy API to help their users refill orders in seconds, which also providing the option for customers to receive text alerts when prescriptions are ready for pick up. All of these examples add value to the brand’s portfolio; others open up entirely new sales channels.

Think Long Term

Many CIOs pursue APIs ad hoc, which constrains the ability to build long-term support. Consider the organization that gets its public Web API to market quickly, but it fails due to few developers actually using it. CIOs should have a clear understanding of how their API plan advances the organization’s larger growth strategy. They can share this through assets such as a developer portal where sample code can be made available and where ideas can be shared.

Leverage your Product Managers

Experience and skills in product management should be used to treat each API as a product supported by a cross-discipline team, e.g., product managers, business leaders, marketing and sales, developers and business operations. Product managers put the customer at the center, ensuring that your APIs provide the fuel to fill customer needs. Getting legal and compliance involved will avoid future surprises, and integrating a product management approach can help build a plan that goes beyond technical implementation.

Adopt Architectural Innovation

APIs are just one of the many tools that support various architectural innovations designed to address the constraints of traditional product development. Even ideas that are fast-tracked through the traditional IT process can take months; and products are often competitively behind the day they are launched due to market changes that occur during their development. An API strategy addresses these common constraints but to work, it should be supported by innovations such as biomodal, microservices and continuous delivery models.

Don’t Forget Hackathons

Many CIOs conduct hackathons to inspire startup cultures and to get developers excited about modern architectures and development practices. Hackathons also give developers permission to disrupt the organization’s traditional product development process (while having fun doing it).

In the public sector, NASA (which says, “no one owns space”) makes its terrestrial and space-based data available through its 9,000 APIs. NASA’s portal offers a library of APIs to nearly every data set that it has made public. Each data set is paired with an API developers can use to create apps to teach people about the world around them (while helping engineers and scientists arrive at higher levels of insight based on what the data is actually telling them).

Hackathons also attract modern talent, particularly developers who prefer working with APIs (especially REST) for mobile app development. In most sectors, talent outside the corporate walls remains largely untapped. External APIs and hackathons can be conducted to reach beyond traditional alliances to third party developers, including startups (which prefer using APIs for service delivery and mobile app development).

Expanding Reach and Scale through Partnerships

Finally, many CIOs, in their zeal to establish a presence in the connected economy, tend to skip the requisite step of positioning themselves for scale, starting first with requiring buy in from the CEO for resourcing and manpower. Once the case has been made for investing in APIs to modernize the customer experience, CIOs can gain efficiencies by exploring new agency partnerships with firms that have pre-existing infrastructures designed to support, develop and implement API programs on their behalf. This reach is both internal and external to organizations. A robust API platform enables internal and external teams to move much more quickly and with higher quality services.

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