The Importance of API’s to B2B Enterprises
Before joining SAP, I worked for AT&T Mobility in their Big Data and Business Model Innovation Group (2011-2014) as a product manager. In summary, this division was focused on a lot of hot growth areas that are now generally accepted as the macro trends behind digital disruption and transformations being embarked upon by large companies in industries around the world. These technologies are areas like big data, cloud, mobile and social but also more specific technologies like APIs, IOT and Machine Learning. From an employee perspective, it was fascinating helping a company with over 125 years of history discover new business opportunities and income streams that will hopefully help the company secure its financial future for perhaps another one hundred years.
During this timeframe, I was fortunate to work on a lot of interesting technologies but the one I obtained the greatest satisfaction from was helping AT&T quickly move forward with their efforts to monetize location data for a wide range of use cases including road-side assistance, logistics tracking, automated field worker job tracking and many more. Not only were we able to successfully monetize AT&T’s data, but through aggregator partners we were also able to monetize external third party carrier data as well (domestic and international). Being such a successful initiative I was exposed to many factors of both business and technical consequence. Offering the service to customers turned out to be the easy part, with more challenging aspects coming from privacy compliance, access policies, billing parameters and internal education.
Now in my third year with SAP I like to think that my previous experiences with AT&T and API management put me in a unique position to help SAP customers in their own API based endeavors. In the recent SAP CIO guide for Cloud Integration, SAP outline’s our belief that the future of application to application communication and integration will be API based (see image below from page 17, figure 3). This goes for on-premise and cloud, SAP and non-SAP, internal and external. It is a great read so I encourage you to check it out (after you read this blog post of course!)
At SAP, I have had the opportunity to work with customers using API Management for both internal and external use cases. Typical internal use cases of API Management involve IT teams exposing internal systems to known user groups with the goal of charging back or tracking application usage patterns. External use cases involve customers securely exposing or ingesting to/from third parties. These third parties run the full gamut with customers, partners and suppliers and typically involve unknown developers and participants. In all cases the use of API Management is helping customers eliminate data silos, maximize data access and ensure efficient secure and scalable API based programs.
In the API space, there has been a lot of buzz surrounding B2C market disrupters like Airbnb, Paypal, Uber and Yelp (rightly so) but it is also fair to say there is a lot of innovation in the B2B space. For example John Deere has an API program built around their agricultural equipment providing customers with complementary technology solutions and a vibrant ecosystem of partners. This API program ultimately providers customers of John Deere with great value from the equipment they are using which ultimately increases yield, revenues and profits. Their API program has great depth and breadth of API based solutions. For example they have features that enable optimum usage of two machines simultaneously (reducing ovelaps and skips), factoring in of field and weather conditions plus offline features. Statistically they have been successful in reducing field issues for customers by over 40% and calculate an increase of first to market features by 20%.
Walgreens is a traditional brick and mortar retailer who is using APIs with partners to drive additional revenue from mobile app partners sending photo printing traffic to their stores with many other initiatives successfully driving additional foot traffic to their stores. They are also innovating with various coupon vendors and mobile centric lifestyle apps. An SAP customer who is using API Management to transform their traditional business is a European mail carrier who is using API Management to facilitate tight integration with eCommerce providers to drive additional parcel delivery related business as traditional services like letter delivery face stiff headwinds. There are many examples of companies using API based ecosystems to further optimize their operations. Traditional banks are opening their APIs to software providers such as Mint and Intuit, automotive OEMs are using APIs to exchange information with suppliers, as are large enterprises in the energy space.
This week I was reading an article on Computer Business Review relating to the increasing usage of API-based architectures in the UK. The article cites a recent IT executive survey performed by CA Technologies that found 80% of respondents are now using APIs as a strategic tool, of which 20% are using them to generate new revenue. Articles like this are encouraging, confirming that a lot of companies are now standardizing their efforts around an API-based approach which in turn lends credit to the notion that we are living in an API-based economy where industries and eco-systems can thrive through easy data exchanges and mashups like never before. With more data being made available innovation can thrive, fostering the development and growth of new business models, revenue streams and previously unreachable solutions.
As our CTO Bjoern Goerke said this week at SAPPHIRE in Orlando “Digital enterprise platforms are much more than just a development environment; they represent an entire ecosystem…. APIs provide the means to share, connect, and extend services and capabilities and are vital for collaborating, innovating, and ultimately meeting business requirements. In the digital age, digital enterprise platforms are the basis for business models.”
So, if you are in a position where you are looking to get started with API Management, or you are interested in learning more about SAP’s offering I always like to start with the following slide that shows you an end to end view of how API Management can help you with your business goals. Once you have identified the API you wish to integrate and expose, SAP’s API Management capabilities provide you the ability to design implement and manage your APIs. Further SAP’s API Management tools provide you with the infrastructure to manage security, ongoing usage and scalability. SAP’s API Management also provides you with the capability of offering your developer users a portal where they can discover the APIs you are exposing to them complete with documentation, code samples and hopefully a vibrant community of user feedback and comments. If you want to oversee a successful API program you ultimately need to ensure your APIs are well designed and documented, intuitive to use and successfully deliver on original value proposition.
You’ll find SAP’s API Management dashboard and tooling makes it extremely easy for you to integrate your data sources, design the API flow and ultimately manage the resulting activity. Below is a slide that showcases a few of the key screens. The API design screens clearly help you construct the desired API flow and usage complete with controls such as buffering, metering and security. Like all our SAP Cloud Platform services it has been designed to facilitate your needs for rapid development, iteration and satisfaction. In addition to make your life easier SAP has recently released API Business Hub where you quickly discover and select APIs for SAP Applications, ultimately making it easy to build out and test new functionality that requires data exchange with an underlying SAP solution. Once developers have found the API they need, they can simply generate the code and copy and paste it into their application.
With the afore mentioned CIO Guide for Cloud Integration, SAP like other companies are standardizing their application to application communication architectures around API Management. Therefore, it is very important for SAP customers to understand the technology and business benefits of an API-based solution infrastructure including best practices, pitfalls to avoid and capabilities that may not have been possible with previous approaches. It is also important to understand how an API based approach can open new possibilities for working more tightly with partners and customers. A lot of companies are moving to an ongoing relationship model as opposed to traditional transactional approaches. Customers in turn are looking for strategic vendors to provide value added services and capabilities that can only be offered through tightly integration systems (as well as other digital transforming technologies like real-time analytics, automation and machine learning).
As I stated in the beginning a lot of long standing companies are facing unprecedented winds of change and disruption. Running a traditional legacy business while also pursuing new business models is extremely challenging and something we at SAP can empathize with! New market entrants don’t necessarily have to worry about existing traditional revenue streams built on legacy systems and processes which in some cases provides them with the advantage of nimbleness and fast movement. On the other hand, if traditional businesses can adjust to these new market forces they may be able to profit from the best of both worlds. API Management is just one tool available to companies seeking to modernize their landscapes and business models but it is a very important one for both internal and external stakeholders who through simple data access can rapidly innovate and bring new solutions to markets with minimal impact to existing systems and work streams.
Thanks for your interest in this post, please leave some of your thoughts/feedback below!
 https://www.sap.com/documents/2017/05/eebd96bd-b97c-0010-82c7-eda71af511fa.html. Full title – SAP Vision for Integrating SAP Applications in Cloud and Hybrid Environments: CIO Guide.
 https://developer.deere.com & http://www.scaledagileframework.com/john-deere-case-study
 https://developer.walgreens.com/apis & https://techcrunch.com/2012/07/10/app-developers-can-now-print-to-walgreens-company-outed-as-aviarys-strategic-investor/