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Eric Newcomer: APIs are powering the acceleration in digital transformation

Written by Eric Newcomer, CTO, WSO2

While organisations have publicly talked of the benefits of digital transformation for some time, the COVID-19 pandemic forced many to pull the trigger on those plans. The crisis accelerated the adoption of digital technologies as organisations across almost every industry underwent huge changes to their operating models.

Indeed, a McKinsey executive survey notes that companies have accelerated the digitisation of their customer and supply-chain interactions and of their internal operations by three to four years. Moreover, the share of digital or digitally enabled products in their portfolios has accelerated by seven years.

There are several reasons for this. Initially, there was the need to establish and equip a new remote workforce, with 55 percent of organisations increasing their cloud adoption as a direct result of COVID-19. Further, 88 percent expect their adoption of cloud services to increase in the next 12 months, with more firms planning to allow employees to work from home post-pandemic. With stores and bank branches shut, or with many people reluctant to venture out, all of a sudden, much more had to be accomplished online.

Even beyond the current crisis, organisations recognise that moving to the cloud as a foundation for digital transformation can deliver a huge competitive advantage – whether that’s through its cost effectiveness, the ability to scale IT as per the customer’s requirements, the processing power to handle increasingly large amounts of data, or the ability to more rapidly push and measure the impact of application changes.

The pandemic also highlighted the need for agility. With physical transactions off the table, consumers have turned to digital experiences. This means organisations are now under greater pressure to digitise services quickly – and at scale – to meet rising customer expectations of seamless customer service  and to preserve or create new revenue streams.

Developing digital experiences

It has traditionally fallen on IT departments to deliver these outcomes. However, overstretched IT teams have struggled to keep up with the demands placed on them, even before COVID-19. They were faced with budgetary pressure, poorly connected systems, and a potential lack of skills within their teams. The pressure has intensified during the pandemic, with many IT pros reassigned to help support the new distributed workforce.

Elsewhere, organisations realise that the ability to harness the power of data will be key to growth. As such, they are looking to unlock the data that exists within their organisations to gain valuable insights to give them a competitive advantage.

However, many organisations struggle to standardize and unify data that is fragmented across the business, hidden in different applications, or siloed in legacy systems. As a result, there has been a surge in demand for employees with specialist data skills – the call for data scientists and data engineers has more than tripled in recent years, according to a 2019 Royal Society report, creating “chronic supply issues”.

This, combined with over-burdened IT teams, has seen organisations seek to empower employees and individual departments to develop digital experiences to match increasingly sophisticated customer expectations. The goal is for employees to have the capabilities to integrate systems, unify data and deliver personalised customer experiences – without needing to write any lines of code or possessing specialist skills.

Aside from the skills shortage, a growing number of business leaders also recognise that the power of data analytics is, in many cases, best placed in the hands of those that are closest to the data. Gartner describes these as “power users” who can perform both simple and moderately sophisticated analytical tasks that would previously have required more expertise.

It is estimated that more than 65 percent of application development activity will be as a result of low-code application development by 2024. Therefore, enabling innovation across the different lines-of-business will be a key priority for organisations in 2021.

The power of APIs

This is where APIs come in. API-led connectivity helps organisations unlock these data silos, providing a coherent view of all that is going on across the organisation, and connecting different systems to each other seamlessly and quickly.

APIs also let customers, partners, and internal stakeholders build products that leverage the organisation’s functionality and data. APIs make various data sources discoverable and accessible to third parties, enabling their own information to be combined with that of others. APIs help create a seamless engagement for the customer – essential at a time when consumers are demanding an exceptional customer experience.

This in turn means organisations can accelerate business opportunities, create engaging customer experiences, and open new revenue streams. This will be even more important with the proliferation of Internet of Things (IoT) devices and data processing moving the edge of the network.

2021 will also see more organisations look to standardise their APIs and the interfaces across their application landscape, creating libraries and focusing on API governance. This will help to put the building blocks in place to make it easier and faster for developers to create any new application or solution in the future.

To this point, according to Gartner the need to get APIs right is paramount because for an organisation to rescale and reinvent an enterprise requires decomposition and re-composition of operating practices, and post pandemic enterprises now have to compose their future.  Gartner states: “This is a task in which the role of an API platform is paramount, because it is hard to imagine any technological environment within a midsize or larger business that does not utilize APIs. Furthermore, their use is growing. Getting APIs right — and doing so quickly — therefore matters more than ever. The more effective an API program is, the more extensive the API platform will be — and the quicker and easier rescaling and reinventing can be accomplished.”

Therefore, APIs will continue to form a key part of any digital transformation in 2021, with their ability to unlock data, connect systems and empower employees to create better experiences for customers.

Counter to this, those who seek to cut corners and implement only tactical solutions, will quickly find themselves at a competitive disadvantage compared to those able to put the right foundation of API led integration in place.