The Key ROI Factors of an API Driven System Enablement Strategy for the Digital Transformation

Recently, I had a couple of situation where customers were asking about the ROI of an API Driven System Enablement Strategy for Digital Transformation. Let us see whether we can summarize some of the key ROI factors for the API Driven System Enablement.

Before we try to define the ROI factors, let us try to put a definition for API Driven System Enablement. The definition is relevant to set the facts straight to define the ROI of the strategic initiative.

The Definition

API Driven System Enablement is a Transformation approach for digital enabling the business system capability as composable, simple, open data-driven business entities with the emphasis on customer and consumer point of view towards our core business products and services and competitive trends in our business domain.

The APIs are composable business capability elements created out of the API-driven system enablement programs.

APIs enable us to build creative products and services for our business using real-time and easy collaboration between our internal and external business partners and providers.

API-driven system enablement is a strategic program business undertake to transform their core business system capabilities as composable business capability units with the help of Integration, and Management capabilities provided by the API-Management frameworks and products.

If we can agree with the definition let us try to figure out the essential five Level-1 ROI factors of the API Driven System Enablement Program.

1. The Speed and the Frequency To Respond to the Business Changes

API enabled core business systems are fast and ready to adopt the business changes to address the customer demands and competition. When business is empowered with composable API as the basic building blocks of their internal and external capabilities without worrying abut the engineering and nonfunctional aspects, it is easy for the business to deliver the new and demanding products and services to the market and respond to the influencing changes from the customer, market, and the competition.

2. The Total Cost of Ownership and Optimization 

Business can select and create any new product offering using the APIs from the internal or external sources. Business is more informed about the choices available. Better buy vs build decision can be made to incorporate or enhance the capabilities necessary to deliver the expected business results with proven results without buying black box solutions from lucrative vendors and suppliers.

3. Business Risk and Compliance Improvement

Digital open up the business to multi-channel opportunities. However, digital is also making our business transactions subjected to higher level data volume, exchange and increased sensitivity due to the collaborative nature of the “everything connected digital world”. API Mgmt capabilities such as cloud and on-premise API gateway will provide a single source capability to control, measure and validate the data we are exchanging with our customers and partners. Business will be enabled with a single point of enterprise-class capability to address access security and compliance/regulation mandates of our business and KYC requirements in the digital business model.

4. Transformation to Innovation from Traditional Business Model

APIs promote internal and external collaborative innovation. Key social media and location APIs enabled 1000s of business to think outside the box, build better, faster, cheaper and reliable new business. Once our business is API enabled we can think about innovation in every point of views of our business. Some of the noticeable opportunities are

1. Run the startups within the business to think outside the box business models using the API exposed capabilities.
2. Attract young entrepreneurs to consume the core business capabilities to collaborate better from the outside to create out of box business concepts.
3. Attract open source developer community to consume and enhance our system capabilities via secure and measured open API consumptions for the open source development communities.
4. Create API Labs for concept and realization of new emerging ideas with the core system using the exposed lab APIs.

5. New Revenue Stream 

Digital transform our life and business to a data-driven world. We never know what is the net worth of data we own within our enterprise. API enabled digital business channels, help us to find new data-driven business revenue streams. Expose your data as APIs, let us the smart business SMEs find new revenue streams using the data and it's characteristics.

We can extend the five level-1 ROI factors to one to many areas based on our business model, the community we serve and the digital nature of our consumers and the citizen.

I hope the short summary will help each of you to justify the ROI factors for your API-driven system enablement for digital transformation.