Why APIs are key to closing the IT delivery gap

3 years ago admin Comments Off on Why APIs are key to closing the IT delivery gap

I believe that we’re witnessing a new revolution take hold: The Fourth Industrial Revolution, where companies can spring up in a matter of weeks, scale globally and turn entire industries upside down. In this technological revolution, no company, large or small, is safe from disruption. Large organizations with calcified processes and monolithic infrastructures are especially at risk. To effectively compete with fast-moving startups, large organizations must learn how to drive agility and speed while being flexible enough to adapt as consumer tastes and market conditions shift.

It’s no easy task. Companies that can’t keep up often fall to the wayside, which may explain why many of the 52 percent of the Fortune 500 have fallen off the list since 2000. Further adding to the complexity are emerging technologies, such as artificial intelligence (AI), virtual reality (VR) and the internet of things (IoT). Our business environments have quickly turned into a bunch of technologies that need to be connected, streaming and analyzing in real-time. Yet to make this a reality, there are many IT and business challenges to overcome.

In a recent MuleSoft survey of 951 IT decision makers (ITDMs), only half said they were able to deliver all projects asked of them last year. The biggest factors responsible for slowing down IT’s delivery include a growing misalignment with business teams (69 percent), under-resourcing (51 percent), time constraints (41 percent) and the sheer number of applications they need to integrate; 35 percent say they are integrating 100 or more applications.

While 20 years ago IT teams might have been able to connect a few enterprise applications and go about their day, this approach no longer cuts it. If businesses continue to operate in the same way, the IT delivery gap will only widen. Employees, consumers and partners all expect instant access, ease of use and consistent experiences across channels, and it simply isn’t manageable if IT remains centralized.

In order to speed up product launches, global expansions and partner onboarding among a variety of other mission-critical activities, many businesses are increasingly turning to APIs. MuleSoft’s survey found that 90 percent of ITDMs currently have or are launching an API strategy by the end of 2017. Of the ITDMs that currently have an API strategy in place, a whopping 94 percent credit it with allowing them to deliver products and services faster.

APIs can free critical data from legacy systems, orchestrate data together from disparate systems and deliver “magical” experiences to consumers. Most consumers don’t care how Expedia aggregates flight data from dozens of airlines or how McDonald’s shares promotional offers through its mobile app. Consumers simply expect to sit back and experience the magic when and where they want. The beauty and challenge of modern APIs is that they have to be treated more like products than code.

While APIs hide the complexity of back-end orchestration and connectivity, organizations must be able to design, build, manage and version APIs in a reusable and broadly consumable way. Essentially, with each API being developed to play a specific role, core IT assets and capabilities need to be decentralized and offered “as a service” to the wider business and even third parties where relevant. 

APIs can enable enterprises to deploy apps quickly, in a repeatable way, which leads to a faster pace of delivery and the ability to create new and innovative experiences. In addition, APIs can greatly reduce the cost of changing an application already in production, enabling IT and application owners to change apps with minimal impact–especially when there are numerous back-end integrations involved. This is critical to agility since the pace of change of the front-end applications is much faster than in the back-end applications. APIs can also help enterprises achieve operational efficiency, enabling greater visibility and expanded capabilities since every API call from a mobile app to a back-end system is tracked and traced through an API key. 

It’s important to note that this new way of operating can’t rely on technology alone; it also requires changes to organizational behavior. Most IT organizations have been delivering an endless stream of projects; however, APIs live beyond the scope of any one project. They are a product, run and managed by the IT organization. Instead, IT must deliver reusable assets and capabilities via APIs that enable business users to deliver their own projects in their own way. Transforming IT from a technology provider into a strategic business enabler is critical for all organizations looking to match the speed and agility required in today’s competitive environment.

Businesses from every industry are using APIs as the building block to exchange value, from increased revenue to greater agility to improved customer experience. In MuleSoft’s survey, 40 percent of ITDMs said their companies generate 25-75 percent of their revenue from APIs while 19 percent said that a majority of their company’s total revenue is generated through APIs and activities directly related to API implementation. We are still in the early stages yet extraordinary changes are taking place in the enterprise that necessitate a new organizational behavior and philosophy for utilizing technology to thrive in the Fourth Industrial Revolution. 

(Disclosure: McDonald’s is a customer of my employer, MuleSoft.)

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