API platforms are an essential ingredient of digital transformation. APIs provide digital access to assets and capabilities of your organization, and all APIs together (your API platform) are the digital representation of your organization, they’re your organization’s digital building blocks. Quite literally, having or not having APIs will directly translate into how quickly you can or cannot leverage assets and capabilities in digital value chains.
It’s critical to not just think of a platform as a technical construct. In particular, today’s platform business models mean that managing APIs strategically becomes an important part of your business strategy. Most organizations are not based on the ideal platform model that, for example, Uber and Airbnb represent, but it is important to think of hybrid models of how traditional linear businesses can use the same model to build new value chains and start co-creating value with partners.
The API economy represents this ability to build digital value chains across organizations, and the more open your platform is, the easier it’s for you to leverage your platform for whatever business requirements may come up. There are three important facets to platform openness:
- Unlock the value in your organization: Everything in your organization should be “lifted” into the platform. Regardless of how it is implemented and where it is deployed, it has to be findable and usable. That’s where APIs really shine: The only thing that matters is that everything has an API, and then you can manage these APIs in your platform.
- Build user experiences on your platform: Whenever new experiences are being built, they should be conceived as APIs from the very beginning. This “API First” approach allows you to flexibly reuse these experiences, for example, when it comes to serving multiple channels.
- Co-create value with partners: In the API economy, it’s important to focus on which parts of a value chain you are providing yourself, and which parts can or should be provided by partners. By strategically using APIs as the interface with partners, it becomes easier to onboard new partners as needed and it also becomes easier to outsource or in-source capabilities based on your business strategy.
Using these categories, we look at linear, platform, and hybrid business models and then apply these lessons to the API platforms that we are establishing and cultivating. It’s essential that we keep those platforms open because we have to continually grow and evolve them.
The most important message is: Don’t paint yourself into a platform corner by making decisions that are hard to evolve. Instead, build an open platform that allows you to unlock hidden value, build new experiences, and partner with others to co-create value.
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