Why 2021 will be the year of the API

Profile picture for user ifairclough By Ian Fairclough January 20, 2021
Summary:
The road to customer success is paved with APIs, says Mulesoft's Ian Fairclough. Here's why.

customer success
(Pixabay)

While digital transformation has long been at the top of their agenda, the COVID-19 pandemic has accelerated the drive to achieve this change for organizations everywhere.

The crisis has forced the rapid adoption of digital technologies, bringing about years of change in just a few months. According to McKinsey, companies have accelerated the digitisation of their customer and supply-chain interactions and of their internal operations by three to four years. Moreover, the share of digital or digitally-enabled products in their portfolios has accelerated by an estimated seven years.

Turbo-charging transformation timelines

There are several reasons why organizations are accelerating their digital roadmaps. One of the most obvious is that customers are now accustomed to digital-first experiences after months in lockdown. As a result, they’ve come to expect a higher standard of experience from the organisations they engage with. This means organizations are under greater pressure to digitise services quickly and at scale, to meet rising customer demands and create new revenue channels.

It has traditionally fallen on IT to deliver these services and transformation projects. However, overstretched IT teams were already struggling to keep up with the demands placed on them, even before COVID-19 ramped up the pressure. Our own research found that more than half (59%) of IT leaders were unable to deliver all the projects they committed to last year. Budgetary challenges, poorly-connected systems and a lack of skills or experience within IT teams are all key barriers that hinder transformation initiatives - and this is only set to worsen as the number of projects continues to rise. As a result, in the year ahead, organizations will increasingly seek a new way to accelerate digital transformation.

To do so, they will need to embrace a ‘digital-ready’ culture and empower the wider business to develop its own connected experiences in order to meet rising customer expectations. Employees will therefore need the ability to integrate systems, unify data and deliver personalised experiences – all without needing to write any lines of code or possessing specialist skills. This will lead to 2021 being ‘The Year of the API,’ as organizations shift to a new operating model for IT innovation.

The rise of the composable enterprise

Organizations are already leveraging APIs to expose data and digital capabilities in a consumable and reusable way. This is driving the rise of a composable enterprise model, which enables organisations to become more agile. New digital solutions can be more quickly created from the huge number of existing capabilities that organisations have at their disposal, rather than being built from scratch every time. As a result, organisations can respond more readily to changes in market conditions, technology disruption, and business demands.

Insurance company Generali UK has embraced this approach to enable its teams to accelerate the delivery of new digital services and capabilities. By exposing its existing capabilities and data sources through APIs, its teams can avoid the need to start from scratch unnecessarily, and create dozens of new applications using the same functionality that is already present in other applications across the organisation. As a result, Generali UK was able to significantly accelerate its digital transformation roadmap and successfully adapt its operations rapidly when the COVID-19 pandemic struck in 2020.

Many organisations are recognising that IT generates the most business value by building reusable integration assets that save time and money on future projects. These reusable integration assets enable IT teams to share the responsibility of innovation with other teams across the business, to alleviate some of the pressure they’re under. Empowering the business to self-serve and deliver new solutions faster through reusable APIs frees up developers’ time to focus on driving net new transformation initiatives and other revenue-generating activities that add value to the business.

Unlocking a data-driven democracy

2021 will also be the year that data separates organizations from their competitors more than ever, and the ability to unlock, analyse, and act on data will become foundational to growth. However, many organisations struggle with data that is fragmented across the business or siloed in legacy systems. Our research indicates that of the almost 900 different applications in use across the average enterprise, just over a quarter are integrated. In line with this, the overwhelming majority - 85% of organizations -reported that they have significant integration challenges that stall their digital initiatives.

API-led connectivity will be integral to overcoming these challenges and achieving the high level of data agility needed to power connected experiences. By placing APIs in front of their various applications, organizations can create a flexible integration layer that allows relevant data from each system to be drawn out and composed into a single view of the enterprise and its customers. This more flexible approach to integration also enables organisations to make their various data sources discoverable and accessible to third parties, so their own information can be combined with that of others to unlock better insights and create more connected experiences for customers and employees alike.

The road is paved with APIs

Organizations are increasingly realising the ways in which API-led connectivity can help them adapt to the new landscape that we’re set to enter in 2021. As the pressure to deliver transformation projects even faster continues to rise, enabling innovation across the entire organization will be a key priority for IT leaders. APIs are a vital ingredient in this, allowing organisations to become more digitally-agile and providing the key to unlocking the data that will power better experiences for customers.