API strategy essentials


When businesses consistently over-deliver on customer, partner, and employee expectations at moments when timely, personalized, and surprisingly delightful experiences are least expected, it could very well be the result of strategic platform and ecosystem thinking.

Airlines, for example, should be anticipating frequent flier personal preferences for in-flight food and entertainment just prior to boarding. The data exists. However, it remains to be seen whether or not there’s an airline capable of digitally aligning its food service, entertainment and other partners around such a highly personalized just in time air travel experience; one that generates improved customer satisfaction, loyalty, and measurable value for all parties involved.

Today’s always-on, always connected, always-engaged technologies — the Triple-A of real time business — make it possible for your organization to envision, fabricate and iterate new, timely, customer, partner, and employee experiences that simply weren’t possible before. The potential of such moments to tip the competitive landscape in your favor is a clarion call to strategically re-imagine your organization and its various constituencies as members of a digital ecosystem powered by your business as a platform; one that enables the democratization of innovation and the co-creation of value through manifold business models and customer experiences.

Consider how Sears recently declared bankruptcy. Business pundits unanimously pointed their fingers at Amazon. Early on, Amazon envisioned itself as a digital platform. Sears — referred to by some as “the original Amazon” — saw itself for too long as a retailer. While Amazon leveraged platform-thinking to create new digital moments and revenue across an ecosystem of internal and external stakeholders, Sears (like many other 5 legacy retailers) spent much of its digital energy trying to strike a balance between its online and physical shopping experiences. Among other opportunities, it waited too long to re-envision its Kenmore and Craftsman brands as potential home automation platforms.

In contrast, Amazon is a now master of that thriving ecosystem; one that routinely leverages a networkable software interface known as the API or application programming interface as its means to that end. Whether it’s Amazon, Uber, Lyft or any of the other darlings of the digital age, API technology is invariably under the hood keeping their ecosystems glued together, while also serving as business channel and business model multiplexers.

For example, the full capability of Amazon’s Alexa technology — well-known to end users of the company’s Echo brand of voice-enabled personal assistants — is also available over the Internet as an on-demand service to non-Echo and nonAmazon products. To achieve this, Amazon uses a standard set of APIs to export Alexa’s capability for re-use by an ecosystem of independent software developers, third-party device makers, and, in “eat your own dog food” fashion (aka “dogfooding”), even Amazon’s own offerings like Echo and Fire TV.

Each of Amazon’s constituencies, including Amazon itself, involves different business channels and, in turn, each of those channels involve different business models that drive value for all parties involved, all enabled by API technology. When an organization strategically envisions APIs as engines for new products, new business channels, and new business models in ways that ultimately produce new revenue or other measurable value, that organization is said to be monetizing its APIs. In aggregate, the organizations around the world that directly or indirectly monetize their APIs form the basis of what the media often calls the “API economy.” As a subset of the total global economy, the API economy is annually responsible for the exchange of trillions of dollars.

Taken together, an organization, its platform of APIs, the channels of platform availability, and the various constituencies to which those APIs are available (internal developers, external developers, partners, etc.) can form a thriving ecosystem. With APIs getting credit for the ecosystem successes of digitally native companies like Amazon, Google, Netflix, and Uber, it’s not surprising that CEOs and boards are pressuring their teams to follow in their footsteps.

The real hurdle however is to transform an existing business into one where digital platform and ecosystem thinking are the dominant mindsets leading to participation in the API economy. But what does that really entail, and what best practices will get you from here to there? Based on MuleSoft’s experience with over 1,000 enterprise customers and ProgramambleWeb.com’s history of chronicling the successes and failures of the API economy, we have assembled this API strategy blueprint to help.

The API strategy blueprint is very pragmatically broken down into four stages. Each stage represents a collection of critical business and technological fundamentals easily tackled by committed organizations who have the necessary executive backing and long-game patience. Those stages are:

› Establish digital strategy

› Align organization and culture

› Evaluate, build, and deploy supporting technology

› Engage your ecosystem

API strategy blueprint

The blueprint, shown in Figure 1 above, is not intended to be the be-all end-all compilation of activities for your to-do list. Nor will this whitepaper touch on every bullet point across the blueprint in detail. Although it surfaces some of the most important action items, the intention is to help you and your team logically frame the journey while giving you an idea of the business and technology-related activities that your organization must be prepared to undertake.

While the four stages are logically ordered, it is just as important to note that once the journey starts, iteration is a constant for each of them. The activities of each are therefore always overlapping. For example, while you are engaging with members of your ecosystem related to one part of your digital strategy, other parts of your digital strategy are still evolving in response to a variety of forces ranging from new customer requirements to competitive pressures to changing market conditions.

Furthermore, there are two ever-present themes that horizontally cut across the four stages; (1) financial rigor and (2) establishing goals and measuring performance against them. We’ll revisit both issues later in this paper after covering each of the stages starting with establishing your digital strategy.

Establish digital strategy

If there’s one stage in the API strategy blueprint that’s critical to the success of the others, it is establishing your organization’s digital strategy. Although it will morph over time, your digital strategy is your true north for the remaining three stages. Without a validated, well-articulated, and executivebacked digital strategy (a truly strategic plan), it will be nearly impossible to organize for success, much less deploy the right technologies or court the most relevant constituents with whom you’ll work to co-create the long-term success of your ecosystem and ultimately your company.

Put another way, it’s one thing for the journey to end up a few degrees off of north, thereby requiring minor recalibrations along the way. It’s an entirely different challenge to pivot the entire business due to a serious miscalculation that sent you South.

Compared to the rest of the blueprint which is very executional in nature, your digital strategy is far more theoretical because, to a large extent, it relies on digital instincts, creativity, and expertise; disciplines that may not be areas of strength for the existing organization. Imagining realistic business outcomes such as new customer experiences (an important part of establishing your strategy) based on platform and ecosystem thinking is a muscle that many organizations have never effectively exercised before. So, it’s not surprising that many organizations struggle to establish great digital strategies.

While the second stage addresses organizational culture and build-out, it is imperative for the strategy-setting process to begin with your first organizational change by involving the assistance of someone with a history of game-changing, platform business outcomes. This could be a newly created role on the executive team such as a chief digital officer (CDO) or it could be a consultancy whose digital practice has a strong track record of driving successful business transformations.

Either way, when it comes to crafting your digital strategy and getting on with your journey, it is no time for amateur hour. Getting the assistance you need, if you don’t already have it, will greatly improve your odds of success.

To read full download the whitepaper:
API strategy essentials


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