A Digital Transformation Enabler, API Ecosystem

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Your Organisational Path to a Fast-Moving Digital Transformation

Working across many industries, I have observed different patterns of digital transformation, but the key drivers remain the same. The ultimate goal of businesses in the digital economy is to stay competitive and ahead of the game. There are two elements to this change

  • Market Growth
  • Cost Efficiency

In both cases, the APIs play a crucial role in this transition, and businesses learned over time that DevOps practices such as CI/CD pipelines, agile development and SIT testing practices could accelerate the transition to an API ecosystem with higher confidence and lower risk factors.  

The DevOps practices help organisations to reduce their time to market for new innovative products, whereas the API-led architecture facilitates building new application out of existing digital assets and services. The DevOps topic is not in the scope of this article, and in the remaining part of this article, we discuss the two drivers for adopting an API ecosystem within your organisation. Let’s discuss it in more details.

Market Growth

For a long time, innovation has helped companies to break into the new market. Newcomers will eventually challenge the old way of doing business. We have seen this in FinTech industries were employing new technologies helped the FinTech companies to reduce the onboarding process for customers and attract customers who were unhappy about long processing time. But how is it done? While Technology helps you to bring on more innovative solutions, at the same time, your internal processes should support rapid growth. In technical terms, your solution should be scalable. 

In this respect, The  API-led connectivity helps you decouple business applications and scale them on demand. The resultant of this school of thought were design patterns such as Microservices. The microservice design pattern is a technology agnostic principle, and the idea is to employ the “divide and conquer” to break monolithic solutions to smaller and manageable services. The beauty of this approach is that your organisation can use Python, Java or Microsoft C to build microservices but ultimately they are all connected as part of a “Network of Applications”.

Cost Efficiency

During economic turmoil, it is not uncommon to see M&As in which bring about the second wave of digital transformation. At this stage, an architect should carefully answer the following:

  • Consolidation or defragmentation.
  • Regional or Central

When M&A happens, an essential task is to support business continuity. In this respect, one challenge would be connecting and integrating two organisations core systems together. The core systems would likely involve financial, treasury, ERP and HR systems. 

Often organisations start integrating these systems directly, aka Point-to-Point. A P2P integration, or what we call an ad-hoc integration involves extending existing solutions to communicate with a secondary system(s). 

Although the ad-hoc approach sounds less expensive in the beginning, experience shows it will become costly and a tedious job to maintain a working solution. An alternative approach is to promote interoperability across the businesses by using standard protocols/mechanisms as the contracts between different systems. Once you have a set of “contracts”, then there is a lesser risk of vendor-locking and hence more comprehensive options for the business.  

The second component of API-led connectivity is a Service Bus, where it looks after connecting various systems together and look after some critical tasks such as data integrity, reliability and scalability. Modern Service Bus solutions have extended their support to modern integration patterns such as Event-Driven Integration. But what are the differential factors for Service Bus vendors? 

Over time, certain vendors such as Salesforce CRM, SAP ERP have positioned themselves as the de facto standard within the industry. Hence one factor to consider when choosing a Service Bus is its compatibility with those underlying systems. For example, for many users, MuleSoft would look like a natural choice when it comes to Salesforce integration. This is due to the wide range of connectors developed by MuleSoft to allow smooth and reliable data exchange between Salesforce and other systems.  

Finally, adopting an API-led integration can help your organisation to grow while maintaining the costs at a lower level. Secondly, choosing the right Service Bus solution is a crucial factor in reducing the cost of development and stepping into a proven path rather than an unknown territory. 

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