Post written by Lisa Walker, an ecommerce strategist focused on emerging business trends and technology at Elastic Path.
The emergence of the API economy, in conjunction with big data, proliferating touchpoints (mobile, tablet, wearables) and the rise of apps is shifting the focus and values of the enterprise from a closed, self-sustaining model to a more open and symbiotic paradigm – one where partners and third parties can co-develop the brand and ecosystems can flourish.
Every business is now a digital business as best evidenced by Starbucks which in Q3 2013 reported a record 9% increase in same-store sales, and a stellar 25% rise in profit, much of which CEO Howard Schultz attributed to its “best-in-class digital, card, loyalty, and mobile capabilities creating a ‘flywheel’ effect elevating the relevancy of all things Starbucks.” In the U.S. alone, the Starbucks mobile app powers more than 4 million purchases a week, or more than 10% of all store transactions, and accounts for the bulk of U.S. mobile payments.
Whether it’s being able to see the stars gathered with each purchase or being rewarded with a free drink every 12 purchases, the subtle gamification of the coffee buying process is addictive and as such, is a sure-fire way to generate loyalty. It also generates valuable, contextual data, such as who is buying a coffee and when – data that is of increasing value when released to unknown third parties.
Across the board, pioneering companies that have taken the plunge into transforming their organizations and infrastructure into one suitable for participating in the API economy are already reaping the rewards. Based on the results of a commissioned study conducted by Forrester Consulting
of 100 IT executives and decision-makers, enterprises with an API strategy are three times more likely than their competitors to succeed at delivering mobile applications, and almost twice as likely to provide a consistent customer experience across multiple touchpoints.
However with Gartner predicting 75% of Fortune 500 enterprises will open an API by 2014 the question isn’t whether or not you should release an AP but how will your API be of value? How will you encourage its adoption and use? Will it be through the release of a single data point or a collection of multiple data points offering true capability and functionality?
For example, consider what’s more valuable to a potential third party developer – your customer list or customer list with last purchase? A product list or product list with associated recommendations? A book list or book list with entitled readers?
Whereas API Management focuses on the speed, security and monetization of the data passing through your system to external parties, success in the age of the programmable web and the API Economy requires the joining of multiple data points from multiple backend systems – ecommerce for price, customer list from CRM – to assemble an API that reflects the true value of your business and which can be exploited by internal development teams, external partners and third party developers. Ideally, these relationships are assembled and constructed before they hit the API gateway. However this may be difficult to transact as traditional hardwiring tends to silo data and hold it hostage to its particular system. To secure all the benefits of the API economy, the combined power of your entire enterprise ecosystem should now surface in a unified API.
Rather than each database directly connecting to other databases, a unified touchpoint broker or mediation layer becomes a central point of contact.
Unified API architecture has several benefits:
- Data flows into one central spot – both from backend systems and external, customer-facing touchpoints. This has ramifications for processing data in real time and creating personalized, contextualized and gamified offers
- Promotes ease of swapping out backend systems
- Provides data digestible to new touchpoints such as Tablets and Mobile
A unified API also offers a one stop shop for assembling new products and promotions through combinations of APIS such as Product + Recommendations for similar searches. Whereas an API call for a Product will get you $0.05 cents you can more than double your profit by adding recommendations to the mix and charge $0.15 cents. Your business has done the work to track and assemble this information, and as such, the two related pieces of information are more valuable than their individual parts.
In this new paradigm of the API economy, the enterprise now needs to serve a revised and ever-evolving business strategy, one where the ability to create new business models and expand your brand efficiently and effectively through the ever increasing realms of digital experience is key.
The long term intention is to have third party developers make use of your product via your APIs in ways you hadn’t imagined and who will enhance and support your Brand if you enable them.
If you are interested in learning more about Unified APIs, come join Elastic Path and SOA as they unveil Cortex API in the cloud, a test ground for exploring and playing with a hypermedia, Rest Level 3 API. Stay tuned to this space for more details or come visit us at www.elasticpath.com