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Hexaware Technologies
  1. Technology
July 20, 2022updated 16 Jan 2023 11:40am

How API-based integration of systems and processes can drive success of digitalisation strategy

Hexaware’s Biju Shoolapani discusses why and how companies should be pursuing 'APIfication'.

Pre-pandemic, research conducted by Harvard Business Review found that 70% of all digital transformation initiatives don’t meet their goals. An estimated $900bn of around $1.3trn in digital transformation spending went to waste, with digital transformation marked the number one concern of decision-makers across a range of industries.

Successful transformation can deliver a plethora of opportunity, whether it’s cost reduction, enhanced internal and external communication, or improved customer experience – but without an efficient way to keep systems and resources well-connected with minimal maintenance, organisations run the risk of magnifying pre-existing inefficiencies rather than helping with them.

Successful digital transformation can deliver a plethora of opportunity, whether it’s cost reduction, enhanced internal and external communication, or improved customer experience. (Photo by dem10/iStock)

According to Biju Shoolapani, global head for digital core transformation at Hexaware Technologies, “APIfication” is often the missing element for a lot of companies looking to execute a transformation strategy.

“The first stage of any transformation is to prepare underlying business organisation, IT and different support functions,” he says. “Once you have that core transformation, the next stage is to create value for the organisation. The third stage is creating an ecosystem allowing for scalability. APIs address these three levels of transformation at once.”

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Facilitating communication

In essence, APIfication is about enabling access to data from a central set of applications to different users. These could include internal developers, separate departments within an organisation, end-user customers, partners, or vendors. It will depend on the industry and individual needs of each organisation exactly what information is made available, but the end goal is ultimately to offer an interface which facilitates communication between consumers and providers.

“Insurance companies are a good example of the kind of organisation who need accelerated digital transformation, by moving through the three stages of APIfication at once,” Shoolapani says. “Delivering innovative products with agility is a complex process, which couldn’t be achieved without APIs.

“This can be tricky because, for every insurance business with the infrastructure and know-how to implement an API, there are other more traditional operators who can’t keep up with the pace of change.”

This is where digital transformation can be tricky, Shoolapani says, since much of what still holds businesses back is a sense of ‘how things are done’ in certain traditional industries which have grown used to outmoded and inefficient practices. In other words, the slow implementation of automation and digitalisation is often industry-wide, and not just the problem of specific companies.

The importance of community

The speed of APIfication also goes beyond the ambition of a single player and is dependent on the amount of innovation within a whole ecosystem or section of the economy. This potentially makes it difficult for organisations in industries where digitalisation still lacks maturity.

“Look at financial services,” Shoolapani says. “There, you have this really interesting tension between more agile, more modern fintech companies, and the traditional banks and finance companies who find that some of what they used to offer – say, in payment processing – can no longer be delivered efficiently. In other words, this is about wide-scale market disruption, and not just encouraging individual organisations to see the merits of digital transformation.”

With specific regard to APIfication, those merits are far-reaching. From delivering a decentralised way of facilitating business functions in minimal time; freeing up developers to build solutions quickly and creatively in line with business needs; real-time data exchange; security; and hybrid cloud integration, allowing for the leveraging of cloud technology to facilitate scalability.

“What Hexaware does is create APIs to try and improve the operational efficiencies of each client,” Shoolapani says. “That is, to make digital transformation possible for anyone who wants it. The question is: how do we design our APIs in such a way that people get full use out of them? Where do re-use and potential for productivity improvement come into play?

“Once a few companies have been convinced of the merits, all it takes is a groundswell of influencers within certain vectors to leverage new standards, cause disruption, and force the traditional hierarchy to take notice of a common language. In finance, this new standard has come in the form of open banking. In insurance, it’s open insurance specification, and all it took were a few businesses evangelising to their partners and customers about the merits of API use.”

For individual companies to engage, Shoolapani says, management and stakeholders should have a clear idea of how IT within their organisations operates. Essentially, the business strategy and IT strategy need to align, to have a clear idea of how best to leverage APIs in what they should be used for going forward.

Opening up access

Shoolapani also stresses the importance of ecosystems being made adaptable, where developers are free to open up their APIs and make them consumable. From that, he says, a whole developer community or developer portal with lots of available information can lead to a widespread culture for change. But those changes ultimately begin with brave decision-making from the top down.

“A good example of an influencer organisation who have achieved this is the New York Times. Their API journey started ten to fifteen years ago as a result of having to find a strategy which redefined the news and media market as a whole.

“They opened their APIs and allowed other people to innovate and build products out of it. They didn’t try to lock away a particular data element or value, but opened it up for the broader ecosystem to leverage. That’s something which needs to happen in many other industries, for supply chain management or manufacturing to open up.”

However, the difficulty for some businesses in pursuing APIfication, and therefore opening up certain organisations to digitalisation, is the fact that many are operating in silos. This leads to overlaps, and the redundancy of certain APIs, or not having a sense of what those APIs are doing, often because they have been built from the bottom-up without due recognition of the product perspective as a whole.

“A big part of the problem is how we, as service providers, go about designing APIs in a more standardised form,” Shoolapani says. “Adhering to industry specification, adhering to domain needs, and being able to do it at a pace using our own IP.

“The key is keeping all this in mind from an API’s conception, at the design stage, then ensuring that it’s available to business partners all the way through to the end of their own supply chains; be that with partners or customers, or simply separate parts of the business. We want to create this factory with different lifecycle stages and tools, allowing our customers to make that platform faster and better should they need it to.”

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