Raconteur

The Digital Economy

Issue link: https://raconteur.uberflip.com/i/632439

Contents of this Issue

Navigation

Page 15 of 19

How to build a better business A software-to-software interface which connects businesses and opens up new revenue streams is reaping rewards for early adopters T here can be few organisa- tions nowadays that don't see data as fundamental to their business. But while there's a natural tendency to think of this data as a private resource to be carefully guarded, organisations are increasingly reaping value from opening it up to the world. Businesses such as Amazon allow third-party merchants to hook into their site, review sites use Google Maps to display nearby restaurants and websites of all types encourage users to share pages on Facebook. Key to all this sharing is the appli - cation programming interface or API, which simplifies and standardises the way different applications hook up. And while these are effectively in - visible to the end-user, they are cen- tral to most internet businesses. An API is a set of programming in- structions and standards for access- ing a web-based software application or web tool. Using one, a third-party application can access an organisa- tion's data without the need for soft- ware to be written from scratch or for developers to have to share the whole of their software's code. This plug-and-play approach al - lows enterprises to create new mar- keting strategies, such as targeting customers through influencers rather than directly, and helps them move into different markets by cre - ating new products and services from their assets, data or processes. Holiday companies, for example, can automatically keep travel price comparison sites updated, boosting business for both. Meanwhile, tele - com firms can provide APIs to ena- ble developers and partners to build mobile and web applications based on their services. Using APIs can help organisations be more responsive and innovate more quickly. In many cases, organ - isations can charge for access, creat- ing new revenue streams. "For any company in any indus- try who wants to stay ahead of their competition, APIs should be at the forefront of their digital strategy. APIs allow businesses to easily and safely share their data and service through multiple apps, and can expose op - portunities for businesses to enhance customer experience and create new digital services," says Chet Kapoor, chief executive of API management company Apigee. "For example, APIs can enable lo - cation-based mobile apps to have access to integrate information about entertainment, shopping, hotels and restaurants, providing customers with new levels of infor - mation and convenience." APIs are at the heart of supermarket Morrisons' Match and More loyalty site and mobile app, which provides a price match guarantee against Aldi, Lidl, Tesco, Sainsbury's and Asda. API STRATEGY EMMA WOOLLACOTT The scheme requires the shar- ing of customer data, loyalty-card information, and both digital and physical vouchers with the su- permarket's partners, along with promotions and a live stream of personalised mobile offers when customers are in-store. "Apigee has helped us to stream - line digital and technology process- es within Morrisons to allow the creative teams to concentrate on the experience rather than create dis- parate front-end systems for each activity," says Tom Foster, the su- permarket's head of platform strat- egy and architecture. "This creates exciting new opportunities, as well as driving efficiencies, enabling us to swiftly enter the digital age in a well-managed way." And there are extraordinary finan - cial benefits to be gained. According to Apigee's UK Digital Business Sur- vey Snapshot, companies using APIs are eight times more likely to report increased revenue than those that deliver apps alone. And while the overall median re - ported increase in revenue from successful digital initiatives is £487,000, this rockets to £9 million where APIs are involved. Meanwhile, for Francis Hellyer, chief executive of online ticketing business London Theatre Direct, the biggest advantage of opening up the company's APIs has been a huge reduction in administration. The company was founded in 1999, but has moved on in recent years from a purely ticket agency business model to start offering selected partners direct access to London theatre by developing a full API solution with Tibco Mash - ery, as well as a business-to-busi- ness booking engine and a range of affiliate solutions. Through APIs, it has opened up its booking platform, spanning London musicals, plays, ballet and opera, to numerous partners and channels, giving a seamless booking experience at any part of the customer journey. "Our partners have access to pretty much everything we have as a busi - ness, so it's very exciting to think what other partners can do," says Mr Hellyer. "By allowing open ac- cess, we hope to get a faster uptake. If someone comes up with a really good idea for an app or a service, we can work with them very quickly." The system combines access to tickets from different services, and there's great variation between the different contracts and agreements. "The way we charge depends on the type of partner and there are differ - ent levels of commission," he says. The company has recently added the ability to book New York Broad- way shows to its range of services. And the next step, says Mr Hellyer, is to start including the ability to APIs, or application programming interfaces, are seen as building blocks of the digital economy, enabling innovation, new products and offerings through a plug-and-play approach. Simply put, an API is a common interface for building software that allows two or more apps to communicate with one another and use each other's functions, without the need for software to be written from scratch. Using a basic example, an API allows computer users to cut information from one program and paste it into another. APIs also allow apps, such as Yelp and Uber, to display their services on a Google Map or enable BuzzFeed readers to share articles with their Facebook friends without even leaving the website. WHAT IS AN API? make travel bookings. "So we've added into the mix hotels, flights, entertainment and travel," he says. Organisations can future-proof their activities by using APIs in - ternally too. Forrester Research says systematically implement- ing core business capabilities and assets as business APIs can help companies become much more responsive and enable rapid busi - ness reconfiguration. "To stay ahead of the game in identifying which business APIs to build, connect API strategy to business architecture and specifi - cally to its definitions of business capabilities and domains," ac- cording to Forrester's vice presi- dent and principal analyst Randy Heffner. "These form the basis for identifying major areas of busi- ness data, transactions, processes and events that are candidates to become business APIs." Organisations can identify their greatest assets in terms of data or applications and then recruit poten - tial partners that can take advan- tage of them to create new services for customers. "Ground your API strategy in an understanding that innovation can come from any - where," says Mr Heffner. It's a rapidly growing trend, with Forrester predicting that this year will see a huge uptake in the use of APIs. US companies alone will spend nearly $3 billion on API man - agement over the next five years, it predicts, and annual spend will quadruple to $660 million by the end of the decade. And as they do so, says Nick Knup - ffer, director of international mar- keting for API management firm Ti- bco Mashery, business processes are becoming far more responsive. "Fuelled by the proliferation of mobile applications, by delivering data where and when is needed, APIs are slaying the usual business and technology boundaries to better reach and engage with customers, the workforce, and partner and sup - ply chain access," he says. "By bringing services and in- formation together in one place, and extending the brand potential accordingly, revenue streams are optimised creating new customer services and leveraging the intel - lectual property of a wider, inte- grated, fluid network." Companies using APIs are eight times more likely to report increased revenue than those that deliver apps alone APIs REFRAME BUSINESS STRATEGY AND DESIGN THINKING Share this article online via raconteur.net Source:Forrester THE DIGITAL ECONOMY raconteur.net 16 RACONTEUR 28 / 01 / 2016 TRADITIONAL BUSINESS DESIGN Where design for external integration begins BUSINESS What business are we in? CUSTOMERS Who are our customers? CHANNELS Through what channels can we reach our customers? PARTNERS Which partners can help us reach through those channels? EFFICIENCY How can integration increase value chain efficiency? COMPETENCIES What are we uniquely good at? What are our unique assets? BUSINESS DESIGN IN THE API ECONOMY ECOSYSTEMS What ecosystems can benefit from our assets and capabilities? REL ATIONSHIPS What relationships will allow us to enter those ecosystems? CONNECTIONS Which capabilities do we connect to which relationships? LEVERAGE How do we continuously optimise connections to win, serve and retain new consumers?

Articles in this issue

Links on this page

Archives of this issue

view archives of Raconteur - The Digital Economy