Open Business Strategy : API-led Business Strategy

API is NOT just an IT Artifact

In the past API has been viewed as an IT concern. That was a good starting point but now we must move beyond that.

Let's draw an analogy here. Let's build a conference center!

The typical IT approach would be:

CEO: Sells a conference center to a premier customer.

CIO: Designs for the customer's immediate needs using the fastest tool to build the walls.

CFO: Focuses on the immediate problem, budgets fixed walls for that customer's events because they are cheaper than movable.

The result :

• Next customer has different needs - walls must be torn down and rebuilt.
• CIO focuses on agile, dev-ops and tools to rapidly tear down walls and rebuild those.
• Smarter competitors designed movable walls and with agility to reconfigure the business rapidly, they take the market.

Now I know it was a ridiculous example. But the point is - this is how we build Softwares today. And why so?

Because of the following wrong mindsets?

• CEOs who focus on near-term wins.
• CIOs who focus on technology enablers to build solutions. And that's important; that's the foundation. But that should not be the primary focus.
• CFOs who focus on narrow ROI measures.

The key difference between speed and agility is speed is going fast when we know our destination. Agility is going fast not knowing our destination. And in today's world we all know especially after the pandemic, business agility is the key to survive if not thrive.

As per general principle, we look for architecture strategies and designs that foster business agility over and above technical agility.

And APIs are key for that. API mindset fundamentally changes how you do you business strategy. In other words, APIs could reframe your business strategy. Let's dig deeper into this.

Traditional Vs Open Business Strategy

In traditional business strategy, the typical flow would go like this:

Business Design -> Prospects/Customers -> Channels -> Partners -> Efficiency

Now how about an open business strategy or the API-led business strategy? It starts with asking the following questions:

• What are we good at?
• What are our competencies that we could expose digitally?
• What ecosystems can benefit from those competencies? And so on.. e.g. ecosystems lead to relationships which leads to connections that we can leverage.

So in short, it would look like:

Competencies -> Ecosystems -> Relationships -> Connections -> Leverage

So, you see - the business design begins for agility and integration from the start unlike the traditional business strategy where we start thinking about agility and integration at the end as part of efficiency step.

Current Vs New Innovation Model

Our current innovation model is soiled and sequential. e.g.

1. first we create a new business idea
2. change the business strategy
3. change the business design
4. create software requirements
5. we then put technology behind the idea i.e. hand over to IT
6. change software and tech to implement the new business idea

The new innovation model is:

First: Infuse tech possibilities into business ideation. e.g. create a holistic digital business strategy with technology into business design and operations.

Then: Evolve the idea into reality. e.g. business and tech farms co-create and continuously improve unified, software based business operations.

And yes that does not come for free. We need to strategically fund in API strategy, platform and portfolio that embraces leadership, planning, management and governance (and security) of APIs.

In a nutshell, the new innovation model - reframe design, build, finance and lead.

Design: Modular business design; Software based business building blocks

Build: Blended business; tech teams

Finance: Agile finance

Leadership: CEO driven software competency

Now that we all a sense of what it means to take APIs beyond IT, the correct mindsets should be the following?

CEOs who think of long term ecosystem possibilities

CIOs who consider architectural models to deliver flexibility for ongoing and disruptive changes

CFOs who plan for a stream of portfolio investments in the platform and its architecture