June 09, 2016
June 09, 2016
Contributor: Christy Pettey
Enterprises need to create an industry vision for digital business.
As the Internet of Things (IoT) gets smarter, things using an application programming interface (API) to communicate, transact and even negotiate with one another will become the norm. You can remotely adjust the temperature of a room by using an app that calls the API controlling your thermostat, or when buying movie tickets online, an API is used to verify your credit card information.
We live in an API economy, a set of business models and channels based on secure access of functionality and exchange of data. APIs make it easier to integrate and connect people, places, systems, data, things and algorithms, create new user experiences, share data and information, authenticate people and things, enable transactions and algorithms, leverage third-party algorithms, and create new product/services and business models.
“The API economy is an enabler for turning a business or organization into a platform.” said Kristin R. Moyer, vice president and distinguished analyst at Gartner. “Platforms multiply value creation because they enable business ecosystems inside and outside of the enterprise to consummate matches among users and facilitate the creation and/or exchange of goods, services and social currency so that all participants are able to capture value.”
Uber, for instance, is an example of a business built on a platform because it leverages Google Maps through an API to enable its entire business model of matching drivers who have a vehicle with passengers who need a ride. Walgreens offers an API for its in-store photo printing services that enables others to offer photo apps on its platform. It moves from being a photo printer to being a photo platform.
This is the sort of industry vision enterprises must create in order to turn their business into a platform. This vision should consist of four parts:
An industry vision seeks fundamental change that will affect many dimensions of the business and operations. Using APIs to turn a business into a platform involves three main building blocks:
The CIO will need a set of new capabilities to turn their business into a platform, to include:
The CIO will need new technology assets to turn their business into a platform, for example:
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