API-led digital transformation
Digital transformation and digital modernization are both common in business discussions and literature and are often being morphed into a marketing drumbeat. What does this mean? Is it just the latest buzzword? How does it fit into the project you are just starting or have been asked to architect a solution for? As an architect, project/product manager, or developer, having a good idea of what your end goal is and how you are participating in the eventual vision should be important.
API-led digital transformation is how you achieve connectivity to support your digital transformation, but before we dive deeper into the hows and whys, it's important to look at, historically, the business reasons that make this endeavor important.
A journey back in time
To gain a better grasp of the benefits of digital transformation, let's take a journey back in time. Imagine that you owned a family business where you make blankets. Like any business, you required the necessary raw materials (cotton or wool) to perform the painstaking weaving to produce your product. You had to reflect that in the price. Too high and it wouldn't sell, too low and you ran out of goods and it took you considerable time to create them. You hung your shingle outside to advertise your craft so townspeople would walk to your place of business and inquire about your goods.
Being a crafty business person, you also tried to create as many blankets as possible and have them transported to other towns or ships to sell on street markets or to other stores. Every evening you would sit down and review your books to count your sales, determine how many blankets you could complete, ensure you had enough raw materials to create the blankets, and write letters to other business owners to see if they would like to buy some of your blankets. You often wondered that if you had a storefront in the town square, whether that would increase your sales. In the 18th century, digits referred to fingers and toes, which you perhaps used to count your sales!
Luckily for you, you were living in the 18th century and it was the beginning of the Industrial Revolution. The Industrial Revolution was a period of innovation that transformed largely rural, agricultural societies in Europe and America into industrialized, more urban societies:
Figure 1.1 – Textiles of the Industrial Revolution, by Illustrator T. Allom – History of the cotton manufacture in Great Britain by Sir Edward Baines. Public domain: https://commons.wikimedia.org/w/index.php?curid=9430141
It was a time where inventions/technologies that were adopted by businesses provided improved business efficiencies/values and changed people's expectations on the availability of goods.
You found that by purchasing a Spinning Jenny, which made weaving faster, you saw work shift from family-led home production to factory production. Later, you were able to buy faster weaving equipment that ran on steam power and your output increased drastically.
Of course, this changed how you thought about your business. You had greater productivity and you needed to transport your product more efficiently. Horse and cart wouldn't be as effective as a locomotive, so you started shipping by train. Being the only blanket maker in town, you increased your storage space and people from all over flocked to your store. Given you were more efficient in making your blankets, you were able to garner better deals for increased raw materials and passed that on to consumers at lower costs. You even hired an accountant to keep track of your books (because you ran out of digits). You were a success and ahead of your time.
Fast forward to the 21st century
As we fast forward to the 21st century, we can see how the Industrial Revolution changed businesses (even our fictional ones). These factories could employ hundreds and even thousands of workers who produced mass batches of blankets more cheaply than they could be produced in homes.
So, how does that all relate to digital transformation, and where does API-led digital transformation come into play? We'll answer this question with some interesting correlations in the following sections.
Marketing mix – 4Ps
With the Industrial Revolution, it was inventions that drove increased productivity. Depending on the factory's location, their products were limited to transporting the product and finding a place to sell it. Getting the word out about their product was done through storefront advertising so that growth was steady.
As time passed on, the Industrial Revolution continued to bring improvement. Transportation improved, telephones became prevalent, and even typewriters came to light. Eventually, along came the internet, and the possibilities exploded. So, what did these revolutions have in common and why is digital transformation key? It all revolves around marketing. Digital transformation has its roots in marketing.
In marketing, there is the concept of 4Ps:
- Product: This refers to goods or services that a company offers to customers. A product should be something that satisfies a customer's need, want, or desire. A product could also be a new invention that generates a demand to have one. It's important to note that a product has a shelf life. It may go through various cycles of reinvention to maintain demand. In subsequent chapters, you will learn how the product in API Connect is directly related.
- Price: Price is the cost consumers will pay for your product. This will be based on several factors, including the cost of the materials, how quickly the product can be produced, and how to transport the product. Product managers must determine the price of the product's monetized value, but they may also consider various plans to support valued customers or try and buy scenarios. When you learn more about API Connect, you will learn how to monetize your API products.
- Place: How you market your product is critical when determining where to place your products. In the traditional sense, you often place your products where customers can see them. In a brick-and-mortar establishment, this placement can be near a checkout display or with highly visible advertisements.
More often than not, television shows, phones, kiosks, and web pages are the best way to attract attention to the product. API Connect allows you to showcase your APIs on the Consumer Developer Portal. You'll learn more about that later.
- Promotion: Promotion is your chosen method of publicly advertising your product. This promotional strategy can be accomplished in various ways. The goal of promoting your product is to show the value of your product to consumers or business entities.
Note
Place and promotion are somewhat interconnected/dependent. In today's environment, most promotion is online. You are probably not surprised that most promotion is done with social media (digital word-of-mouth).
In our fictional blanket entrepreneur example, you probably recall where the 4Ps were important. For instance, the product was the blankets. You saw that the price of the blankets was contingent on the cost of raw materials and the cost of creating the blankets. The store location was important as you wanted as many potential buyers to purchase your blankets. Other than breadboards and your shingle hanging outside your home, you didn't have customers from outside of your town, but you were successful because you were the only store in town.
As you review the company today, there have been considerable improvements over the centuries that have been propelled by the second and third Industrial Revolutions. Inventions such as the telephone, engines, automobiles/trucks, and machine tools from the second Industrial Revolution greatly improved business ability. The advent of computers, telecommunications, and electronics in the third Industrial Revolution further advanced business processing. Factories got bigger, stores (brick and mortar) were replicated across the country, accountants were replaced with accounting software, and marketing continued to follow the 4Ps to grow business.
Best laid plans go astray
An interesting phenomenon occurred with the age of the internet, Service Oriented Architect (SOA), and Web 2.0+. As systems evolved, we have seen a great many implementations in silos. Enterprises went from centralization to decentralization and back again. SOA introduced the concept of Enterprise Service Buses (ESBs) and high governance (or assumed governance). Web Services APIs were introduced and Centers of Excellence and integration teams were formulated. The culmination of these factors and the siloed demarcations eventually led to hot projects oozing like lava. The 4Ps, while still applicable, were being hindered by a lack of agility and changing demographics and attitudes.
Adding more Ps to the 4Ps
As we progress toward API-led digital transformation in this chapter, you are probably aware the technology today has brought to light how people, processes, and passion (the new Ps) about products have changed the way marketing is strategized:
- Passion: Consumers today are passionate. They demand innovations, speed, and personalization. You may have been considered a "Best of Breed" before but in today's markets, you can go from "Hero to Zero" in a heartbeat. Just consider the passionate responses on Yelp and other social media. As a part of your digital transformation, you have to take into account how passionate your consumers are. Doing so will gain the respect and loyalty of your customers.
- People: Being customer-focused is imperative. The more you know about your consumer and how they view your products or services, the better. You learned about passion and how it is paramount to manage expectations. When you consider adding people to our mix, you should also consider your internal people. They are the ones responsible for achieving your marketing goals. It will be these same people who will buy into your digital transformation and participate in making the transformation holistic and broad.
- Process: Process is the final consideration. It will be the process that ensures the delivery of your product to the customer. There will be policies and compliance aspects that will need to be considered. Failure to execute could be catastrophic to your goals. When you learn about the features of API Connect, you will be able to incorporate these processes into the life cycle of your products. Some of these processes will enable you to be more agile and deliver more in less time. You'll learn more about this in detail in Chapter 11, API Management and Governance.
Additional Resources
Here are some good resources about Agile integration:
https://www.youtube.com/watch?v=IB001-j8bOg&list=PL_4RxtD-BL5tYINDy6tntfYx4t6N7ulNe&index=11
The concepts you've learned about in this chapter provide a basis on the key aspects that drive business. Relating these concepts to strategic and tactical digital planning is what you'll learn next.
Business transformation to a digital transformation framework
At this point, you've learned about some of the history and marketing tactics that establish reasons for the business's transformation. As you have probably recognized by now, being successful in your business transformation involves taking advantage of the digital capabilities that are a part of today's everyday life.
Let's summarize some of the key business changes that you should be aware of:
- New startups are going digital at inception.
- Customers/consumers are changing and so are their expectations. Customer loyalty is waning.
- How information and customer feedback affects your products.
- Innovations are changing rapidly. You need to surpass or be left behind.
- Delivery of goods has drastically improved, which affects pricing.
- Similar products have made innovation and pricing differences indifferent. Best of Breed is no longer a consideration.
So, how do you get started and how can you ensure you are successful? All too often, digital transformation initiatives fail.
Avoiding failure
So, how can you move thoughtfully toward transformation? Prior business models and processes may cloud your direction. If you recall the key business changes in the previous section, you should be aware of how old methods could be a roadblock to your digital goals. As an architect, it will be contingent on you to thoughtfully set goals and guidelines to ensure continuity and compliance with your strategic endeavor. It should be a holistic view that considers all the departments or lines of businesses and how each contributes to the overall digital transformation.
What you should attempt to avoid is allowing a single silo to be implemented digitally, and then another, without first establishing a digital integration plan between the two and recognizing the benefits this brings to the company. Always review alternatives before launching each new effort. However, you need to coordinate these efforts; the incremental steps should be appropriate and should follow a logical path.
Getting off to the right start should begin with establishing a digital startup checklist:
- Are all the executives on board and supportive? An executive demanding change and expediency may easily destroy the framework. It must be a sponsored endeavor.
- Consider a design thinking session where multiple parties participate and contribute their insight and experience. This should include parties from compliance/governance, marketing, content delivery, analytics, architecture and development teams, and executive input. The team should be open to change and radical ideas.
- Identify stumbling blocks and technical challenges.
- Determine how you measure success. Not all implementations by department or line of business will be measured the same.
- Take stock of your existing resources. Are they sufficiently trained? Are there business cultural barriers? Are you organized by silos? Is there a DevOps team?
- Look at yourself. Are you engaged and excited? Do you feel supported by executives?
- Are you considering frameworks to assist in your digital vision and provide guidance as you begin your journey?
You should now have a good idea of how the business ties in with digital transformation and have been given some simple guidelines on how not to fail. If failures do occur, revisit the checklist and see what you could have done better or if there was something you didn't consider.
The last item in the checklist was considering frameworks. Having an architectural picture will provide your company with some guidelines and potential solution additions to help you achieve your goals.
Digital framework considerations
So far, you have been provided a business background on why to consider various factors when improving your business. You have also been introduced to a startup checklist to begin to formalize change and improve the process so that you can measure success. You know that your customer has changed and demands more, changes often, and seeks better experiences. With all this information, establishing or adopting a digital transformation framework will help you ensure you thoughtfully consider all the aspects covering the facets of customer experience, operational improvement, and the modernization strategy.
The following table helps organize everything we have discussed into categories. These categories will transition to digital practices and implementations:
Figure 1.2 – Categories of digital transformation
The three categories shown in the preceding table highlight tactical directions within the digital transformation adoption. We'll have a look at each in the following subsections.
Customers
One constant theme in digital transformation frameworks is the focus on customers. The Customers category lists items that are important in getting to know your customer's needs, desires, and ability to provide feedback (good or bad).
As you learned previously, people's passions can provide positive or negative results. So, for example, if customers would like to sign up for your application, make sure the self-service capabilities are implemented. Ensure that the approach is streamlined and proper customer service capabilities (such as reset password) are easy to perform. Perhaps consider chat sessions and/or alternative ways to access your application (mobile, iPad, kiosk, and so on) so that the customer feels important.
As you look into building digitally, utilize this category to verify you have considered and addressed those items and have communicated to the other teams how they will be accomplished.
Processes and performance
Having a focus on the customer also leads to considerations to improve processes and performance. Delivering a new digital product should include communications throughout the organization so that everyone is on board. One critical aspect of digital transformation is ensuring that changes and improvements are delivered quickly. Your customers do not want to wait for extended periods for new features or improvements. Investing in an agile delivery mechanism, as well as considering how application scaling can improve performance at peak times for seasonal events, will help you out here.
You should also consider where you would like to implement your digital solutions. Considerations should be taken into account for hybrid implementations so that you can take advantage of cloud capabilities/efficiencies such as IaaS, PaaS, and SaaS, as well as capitalize on your on-premises assets and solutions.
While digital transformation is generally about applications and solutions being executed effectively, what it really takes is people. Many of the implementations could include new technologies and platforms. Ensuring your teams are trained on new technologies and communication flows between organizations is critical.
Business cases
One potential stumbling block when adopting digital transformation is the misunderstanding that one single implementation of a digital project doesn't make your entire organization digitally transformed. A digital island is just that – an island.
To be an effective digitally transformed enterprise, you will need to be constantly focused on the holistic view. You should be thinking about the enterprise integration of digital implementations working cohesively together with common products, shared decision making, and creative design thinking. Your implemented digital services should be shared. Don't build digital islands. Focus on blurring silos and folding in and adopting existing digital successes.
As a reminder of all of the common considerations, the following word cloud diagram can be referenced at your leisure:
Figure 1.3 – Digital framework word cloud
It's time to get technical and dive into API-led frameworks.
Hybrid reference architecture
Working within a framework will give you some themes to follow when you are just starting. Taking those themes, you can now map them to an architecture that will provide you with the flexibility to implement them.
The following hybrid reference architectural diagram provides you with a holistic look at the components you can use to bring your digital solution together:
Figure 1.4 – Hybrid reference architecture
This reference diagram depicts the intersection of your on-premises applications and services and new or migrated functionality to cloud infrastructures.
The on-premises functionality (at the lowest level) would be your existing applications utilizing SOA, Java, messaging, and web services, all of which will be coordinating and managing your system of records.
As you begin extending this functionality with external partners, you begin integrating with another implementation layer that provides APIs, events, and various ways of exchanging data. This layer will operate with general-purpose APIs, or what is called backend for frontend (BFF) APIs. Introduced by Sam Newman, this design strategy reduces bloated services with too many responsibilities into a tightly coupled specific user experience API that is maintained by the same team as the UI.
The benefit of BFF is this API layer, which can now be implemented by your digital teams as a new service offering in the public or private clouds.
With API management, these new APIs can be exposed to various channels with proper monitoring, governance, and security. These system APIs are the workhorses within this architecture.
With the reference architecture in place, you can now explore the capabilities of Infrastructure as a Service (IaaS) on cloud service providers, build new applications using Platform as a Service (PaaS), and incorporate and integrate with other Software as a Service (SaaS) solutions such as Workday, ServiceNow, and Salesforce.
