With increasing expectations from the business, employees, and customers for integrated IT services, APIs can be a key solution. However, to get the most out of API investment, a clear API strategy aligned to the business vision is vital.
Business departments, employees and customers are continually demanding better and more integrated services in today’s tech-driven world. However, IT departments are facing the need to deliver more with less, and are struggling with legacy software that doesn’t allow for innovation.
Often, a full software replacement to meet new demands can be cost and time prohibitive. Equally, it can be tempting to invest in short-term solutions for an immediate project, at the expense of creating sustainable solutions that might have a slower return on investment, but could be reusable or scalable.
As a result, IT can be seen as a roadblock to innovation.
To overcome these challenges, IT departments need to be more innovative, agile and cost effective. This is where APIs, and an API strategy, can play a vital role.
Seventy-seven percent of our clients tell us that creating a ‘Connected Enterprise’ is a strategic priority, with the majority looking to invest 11 percent to 15 percent of revenue in achieving this in the next 24 to 36 months. Imagine a world where data is immediately accessible to your customers, partners, suppliers, banks, and just about everyone in your ecosystem as you require.
With the right API strategy, this could be achieved.
Today’s businesses and consumers have access to a plethora of cloud software applications, which have the key benefit of being able to integrate with others. An API acts as an app’s gateway to join with other apps.
An API can unlock digital initiatives without causing major disruptions to existing systems and services. APIs can be sourced from a third party, or be custom made, and applied to existing software to make key the connections.
With APIs, it is possible to gain benefits immediately. For example, when a new employee is on-boarded, a number of separate systems across different departments need their information – IT for computer access, Operations for building access, and Accounts for processing payroll, etc. A full software overhaul to streamline this could take time and cost to implement. Instead, a tailored API could enable the information to be collected once, then dispersed to the right systems, helping to make on-boarding immediately more efficient.
APIs can help IT bring faster, more agile, and innovative solutions to business, employee and customer needs, without the need for a full software overhaul. They can also help to reduce the cost of future technology upgrades, and help overcome resource constraints. They can also enable a better connected consumer experience across countless devices, and help with governance of risk.
Organisations are also realising the financial benefits of having an API strategy. According to the Connectivity Benchmark Report 2018, 35 percent of organisations build revenue through APIs, contributing between 11 percent and 25 percent.
There are three layers of API maturity in organisations:
1. Self-service: The first step is to re-invent how data is exposed from legacy systems. For example, an API could allow employees to personally take control of their salary sacrifices to superannuation. Self-service APIs will register the relevant software applications, and make the connections to send the data from one app to another. With a self-service integration solution, IT gets to maintain control with centralised governance and security, give permission to integrate apps, and allow best-practice integrations from one safe place.
2. Digitisation: Digitisation refers to enabling, improving or transforming business processes by leveraging digital technologies. This is leveraging APIs that already exist, or that the organisation creates, to drive more value and efficiency. Well-managed APIs can connect systems, data, and applications across multiple processes. A business can leverage a mix and match of APIs to accelerate new offerings, to optimise processes, and to help ensure that the business’s data is available where it will be most valuable.
3. Business as a Platform: Managing APIs as a ‘suite of products’ can accelerate ecosystem participation. This starts with digitising core business assets so they can be repeatedly harnessed as API products. Industry leaders like Google, Apple, Facebook, Amazon and Alibaba are doing this. For example, Google is harnessing the power of Google Maps as navigation services. The initial idea of an API is to connect point A to B, but after that there is an opportunity to create a reusable component that can be scaled and extended for use outside of the organisation.
With so much potential for APIs, it is easy to get off track and create an API for everything. This can lead to unnecessary time and cost, or issues with risk exposure – a particular concern following the implementation of the General Data Protection Regulation in Europe.
Therefore, a clear API strategy and roadmap is vital.
When an API strategy is clear, organisations can be more connected, more customer centric, can balance cost against customer satisfaction, have better risk controls, and can maximise the opportunities to increase revenue.
Organisations that apply APIs are often looking to quickly solve an immediate business, employee or customer need, and don’t have a bigger picture, or longer-term strategy behind it. Instead, with an API strategy focused on APIs as a ‘product’, organisations can be more efficient with API development and deployment, and can accelerate innovation to gain a competitive advantage. It allows them to quickly develop new initiatives and trial them in market.
At KPMG, we employ our Powered Enterprise framework to work with organisations to quickly and efficiently build an appropriate API strategy from inception to execution. That means looking beyond the front-office to a wholesale transformation of functions, and taking an inside-out view of the organisation.
We work with iPaaS (integration Platform as a Service) solutions, such as Mulesoft, Dell Boomi and Snaplogic. We work collaboratively to address the disruptions brought by the hybrid era of cloud and on-premises.
An advantage of iPaaS solutions over traditional middleware solutions is that traditional middleware systems can struggle to work with new data and application models. This can happen when supporting cloud, big data, and Internet of Things (IoT) use cases.
While a Software as a Service (SaaS) application might come with its own integration tool, those options can be limited. Instead, iPaaS allows you to easily address virtually any integration scenario.
We complement our services by providing a unique and flexible Application Management Service (AMS) approach. This is designed with, and for, SaaS providers to manage the relationships with their clients and to lift the quality of services eliminating inherent inefficiencies in AMS back office operations.
The demands on IT from within a business, employees and customers for an integrated, connected enterprise won’t slow down. Therefore, cost effective, agile and fast solutions are needed.
APIs, implemented with a sound strategy aligned to the organisational vision, as well as business, employee and customer needs, can offer a solution.
Learn more about Powered Enterprise.
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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.