Five steps for building a successful API-powered digital ecosystem
By Bala Kasiviswanathan, Director of Product Management, Google Cloud
Digital is becoming the first and preferred choice of customers for engaging with businesses. This shift is forcing many organizations to fast track their digital transformation efforts to meet the new consumer demands and improve productivity, all while still focusing on achieving growth. To thrive in the new era, taking an outside-in approach to digital business ecosystems can help you harness your existing resources and relationships to drive new innovations and efficiency.
Digital business ecosystems encompass a network of partners, developers and customers facilitated by modern, cloud-first technologies. They can be made up entirely of internal parties (such as developers within an organization) or can expand to include external individuals and organizations, such as suppliers, third-party providers, customers, developers, regulators, or even competitors.
From a recent Google Cloud survey of 1000 CIOs of large organizations conducted in partnership with Oxford Economics, it is evident that ecosystem strategies can deliver direct benefits such as enhanced customer satisfaction rates, strong revenue growth, and better performance across processes such as supply chain management and regulatory compliance. Click here to gain full access to the results.
To build deep and integrated digital businesses ecosystems, digital tools and processes are integral. APIs are among the most critical of all. According to this research, 51% CIOs cited APIs as important or very important to making their partnerships and ecosystem participation productive and valuable. Over half said APIs are important to their organization’s relationships with both developers (55%) and customers (51%).
So, how do you build a successful business ecosystem using APIs?
Step 1: Identify your core valuable business assets
Building a successful ecosystem starts with identifying business capabilities or digital assets that have value outside the organization or to multiple teams within the organization. These assets could include your key data or services from your ERP system, CRM system, data lakes, microservices, etc. Once valuable assets have been identified, they can be exposed as APIs, making them easily accessible and reusable to developers while still giving IT visibility into and security and control over how APIs are used.
For example, Bank BRI, one of the largest banks in Indonesia, drove over $50M in new revenue through Apigee by creating an API product marketplace with more than 50 monetized open APIs for over 70 ecosystem partners wanting to do credit scoring, business assessments, and risk management.
Step 2: Understand your audiences
To understand how to package digital assets into APIs that developers will use, you need to identify constituencies of target customers and understand their needs. In some cases, the constituency is composed of communities of developers, and in some cases, the constituency is a set of business partners.
Nationwide Insurance, a Fortune 100 company and one of the largest insurance and financial services companies in the United States, recognized an opportunity to provide quotes for pet insurance aggregators faster as part of the API ecosystem. The team developed an API product to address this need. They quickly saw a large increase in the number of quotes generated through various pet insurance aggregators.
Step 3: Package your offerings
APIs that encompass the data and services of your assets can be grouped into API products, and related API products can be bundled into API packages, in order to target various developer needs. If your assets are valuable to be monetized, explore various monetization models such as Freemium, usage-based, fixed-rate and revenue sharing etc.
Accuweather, for example, shares its world-class weather data such as current conditions and forecast data via APIs with a range of global partners and developers who build applications for connected cars, smart homes, wearables, smart TVs and mobile devices. The company’s API packages include free trial and monthly subscription rate combined with usage-based pricing.
Step 4: Make your offerings discoverable and consumable
Developers and businesses need a way to access and use your APIs. For open APIs available for public consumption, either an API marketplaces or a developer portal usually is a one stop destination for developers to discover, explore, access, and test your APIs.
Autodesk, for example, launched the Autodesk Forge cloud platform, a developer platform that offers Autodesk cloud technology via APIs, cloud services, and developer resources. The platform also connects the large community of developers, engineers, and designers who are transforming the industries they support — in design, media and entertainment, engineering, construction, and manufacturing.
Step 5: Measure the performance of your ecosystem
Once you activate your ecosystem, it’s important to continuously iterate your strategy and offerings by analyzing the business and technical performance. If you have committed SLAs for your APIs or if your end customer experiences are dependent on your APIs, you need to continuously monitor them for availability and security.
Urban Science, a company that supports every major global OEM and the retail automotive industry, continuously runs dashboards to monitor its Marketing Intelligence Cloud platform’s growth, adoption rates by product, and adoption rates by customers. At the same time, it uses alerting and notifications to act on potential problems in real time, often resolving possible outages before they can affect customers.
To cultivate deep and integrated business partnerships and build developer communities, you need an API management platform that provides an unified way of managing APIs across their entire lifecycle.
Click here to learn more about the recent Google Cloud’s CIO study of digital ecosystems and gain full access to interactive infographics and industry specific data sheets.
Tune into the following Google Cloud Next OnAir sessions starting 8th September 2020 to hear how global enterprises are leveraging their digital ecosystem to drive innovation and efficiency:
- Enterprise Digital Transformation via Developer Engagement — In this session, HP Inc. will talk about their focus on developer experience as a central theme of their digital transformation strategy and the practical implications of pursuing a prescriptive company-wide approach, including rethinking IT and business processes, and publishing platform APIs for developers both inside the enterprise and out.
- How To Unlock the Power of Your Existing Data Through APIs — In this session, you’ll hear from Australian Energy Market Operator (AEMO) who is leveraging APIs to build a hub for open data in the energy space, and drive innovation that benefits the consumer.
- Delivering New-Age Customer Experiences Using APIs — In this session, you’ll learn how to deliver new digital experiences for customers, to open new business opportunities by creating platforms for partners, and to unleash innovation within the enterprise.