Digital transformation survival guide: Unlocking business value with an open platform. Part 3: Explore the possibilities of an open digital model
Who should read this guide?
Chief Digital & Innovation Officers
Heads of Product & eCommerce
Partner & Alliances Leaders
Customer Experience Leaders
API Product Managers
Banking • Healthcare
Insurance • Manufacturing
Transportation & Logistics
Retail • Pharma
In 2020, businesses that hadn’t yet undergone a digital transformation were caught off guard. COVID-19 changed the world and exposed weaknesses. But it also revealed resilience and helped organizations focus on building the connections that really matter.
In 2021, those that understand the importance of reorienting the business with an open platform will be well positioned for future digital success.
Welcome to the Digital Transformation Survival Guide
If you’re like a lot of business decision-makers, 2020 was a crash course in digital transformation. Given only about eight weeks to do what typically takes five years, no one got everything right. The key now is to take a deep breath and make sure you’re building the right strategy and prioritizing the right products, projects, and programs for 2021 and beyond.
If you’re looking for answers about how to eliminate data silos and move your digital projects forward, you’ve come to the right place. This Guide explains how an open platform provides the strategy and capabilities you will need to face new (and urgent) business challenges, to grow, and to evolve your organization and your operations so you’re stronger than ever before.
It’s divided into four parts, each designed to guide you further along the path to long-term digital success.
Part 1: Embrace the challenges
Reconfiguring your business for the future isn’t a small thing. Learn about the challenges you’ll face and how an open platform can help you address them.
Part 2: Appraise yourself honestly
Knowing where you’re starting from is the only way you can move forward. Assess your organization’s level of digital maturity and get guidance on what to do next.
Part 3: Explore the possibilities of an open digital model
Learn how an open platform can help you reach new customers, experiment with new business models, and create new products and services faster at lower cost.
Prepare to take the next steps with an open platform to unlock existing digital assets and create new business value.
Explore the possibilities of an open digital model
As we learned in Part 1 and Part 2 of this guide, business teams need to be able to select the service and data APIs they need to keep innovating and to automate their workflows. Software needs to be integrated, and that happens by connecting any and all APIs into enterprise systems to enable digital transformation.
So, while business teams pick and choose the technology stack that makes sense to their product development, at a company-wide level, there is a need for a centralized approach that avoids duplication and encourages reuse of the digital assets already available and at hand.
An open platform by definition is innovative, flexible, and future-proof. It allows enterprises to make capabilities, services, products, datasets, and workflows manageable as modularized, composable APIs. It doesn’t matter whether those APIs were built internally, come from multiple vendors, or are accessed via other platforms -- they are all discoverable and reusable across the enterprise from a unified catalog.
This enables APIs to be used internally, with partners, and even by end customers to create new value chains. Enterprise teams can build faster, at lower cost, and with greater flexibility with the power to choose the right digital asset for each goal.
Reach new markets and customers
At some point, most enterprises find it challenging to keep growing their customer base. The reason customer segments are no longer joining is simply because those customers don’t want to engage directly. An open platform allows businesses to reignite relationships and work with partners to access these hard-to-reach segments in the ways the customers want.
Expand your digital ecosystem to acquire new customers
PermataBank saw a fourfold increase in customer acquisition over three years without new branches or more staff. How? By opening its APIs to external fintech partners. These partners build new products and services that give PermataBank access to over 150 million “unbanked” and “underbanked” customers who had not previously seen a need for opening a bank account directly.
Learn more about the business value of open banking APIs
Reach untapped segments
Groupe Chantelle, a lingerie retailer, had already reached new sales peaks via its consumer-focused website. By using APIs, it was able to create an online hub to support wholesale buyers. Today, Groupe Chantelle can deliver frictionless, real-time and automated shopping experiences to end consumers and to its extensive network of retail partners, who can now display the company’s products on their own sites, and process and fulfill orders via one of Groupe Chantelle’s e-commerce websites.
Experiment with new business models
New ideas can come from anywhere
Making APIs available to external partners might highlight new product use cases that can be built with your business assets. These assets may have seemed too niche, were off your radar, or served a market need in a sector you were not tracking closely.
This type of service innovation and product co-creation provides multiple benefits:
R&D costs are outsourced so external partners take more of the risk of building products and testing their market fit.
A much wider, more nuanced range of products can be created at a faster pace than if every idea or product was built and tested in-house.
You can monetize the APIs you offer to partners in a number of ways. You might charge directly for API calls, for example, or partners could be provided certain access rights in return for introducing new clients to your business. In other cases, you might charge a processing fee for transactions using your APIs.
These are just a small sampling of the new digital business models you can explore when you open up your APIs.
Innovate faster at lower cost
In a digital economy, each new product and service will rely on multiple APIs. But workflows like order fulfillment, stock inventory systems, customer relationship datasets, and sales channels will need multiple APIs, too.
Innovation comes from lines of business. Each line of business will not only have its own tech stack, but now it will also build the APIs it needs for specific use cases. But many of the APIs can be used by multiple lines of business. Customer relationship datasets, sales channel workflows, and product catalog systems may need to be shared across borders and for different business needs.
Enabling lines of business to discover what APIs have already been built in the enterprise and enabling their reuse is a key business challenge. But it is also an opportunity for collaboration within and across an organization in ways that have never occurred before. Creating centralized governance and an internal marketplace for digital assets is the best way to speed innovation, improve efficiency, lower costs, and maximize the return on your investment in APIs.
Reuse APIs for the best return on investment
It costs between $20,000 and $60,000 and takes between 30 and 90 days to build and deploy an API, depending on the digital maturity of the company and the complexity of the API itself. In addition, hosting and maintenance costs are typically a minimum of $650–$1,350/month (and several thousand a month if developer marketing and third-party tooling are included).
So, the benefit of governing APIs centrally and making them easy to find and reuse — no matter where they came from or where they live — is simple math: You can save up to $60,000 and 90 days for every API you don’t have to build from scratch.
Testing and scaling with new co-creation business models
Case study: Erste Group
By working with independent developers, Erste Group can partner to build new products. External developers gain the opportunity to scale across all regions Erste operates in. Erste gets to provide unique products and services to a greater slice of their 15 million+ customer base.
Erste has also been able to standardize its APIs so all internal teams can build open banking solutions quickly, which led to the creation of the group-wide customer mobile app, George.
For external developers, we have created a common developer portal that will enable them to connect any API regardless of the tech behind the scenes on which it was prepared, so they get access to just one endpoint and can start building.
–Pavel Vybíral, Senior Architect
An innovative, flexible, and future-proof open platform allows enterprises to make capabilities, services, products, datasets, and workflows manageable as modularized, composable APIs.
It doesn’t matter whether those APIs were built internally, come from multiple vendors, or are accessed via other platforms – they are all discoverable and reusable across the enterprise.
Part 3 recap
The open digital model puts co-creation and innovation in the hands of the business. Explore the opportunities.
Expand your digital ecosystem to reach new markets and customers
Experiment with new business models and monetizing APIs
Bring APIs and integration patterns together to invent new services
Create API communities to lower product development overhead and bring new offerings to market faster
Now it’s time for the best part.
Read The future is open: create your destiny, Part 4 of the Digital transformation survival guide: Unlocking business value with an open platform