The role of technology has never been more important for businesses. Society is in the midst of a generational shift, as technologies such as cloud computing, mobility, the internet of things (IoT) and big data are transforming markets, competitive dynamics and consumer expectations.
Cloud applications have a massive impact, since enterprises are shifting from monolithic dinosaur applications to many smaller applications in the cloud. This shift represents a big opportunity for companies to harness new technology to create innovative products, services and consumer experiences. But this hyper-specialisation of applications is driving a much greater need for many connections between applications, data and devices. Like it or not, IT is becoming ever more complicated.
However, most IT organisations spent the last 20 years building point-to-point connections, creating tight couplings between their applications and data and grinding agility to a halt. This old way is not sustainable. At a time when organisations need to move fast and be agile, they are treading water and gasping for air.
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If organisations continue to operate in the same way, this pressure on IT will only increase. Look at banking: Most of the change going on in the financial services industry involves technology. Banks all across the world, such as DBS in Singapore, are reinventing themselves by emulating emerging fintech startups and other digital pioneers to prioritise a ‘digital-first’ approach.
People have gone from walking into a branch, to looking up banking information on our phones; soon we’ll be able to see our balances in applications that aren’t even from our bank. Similarly in retail, the focus on personalisation, agile supply chains and omnichannel is underpinned by innovating quickly with technology. In this new era, the big no longer eat the small, instead the fast eat the slow.
So how can IT respond? Throwing more resources at the problem alone won’t solve it. A fundamental re-think of IT’s role within the organisation is required, as the status quo is fast becoming unsustainable.
IT’s delivery dilemma
As things stand, IT is far too often seen as a cost function; a necessary function, but hardly the spearhead of the organisation. As such, IT teams tend to have a relatively fixed set of resources with limited capacity to deliver on new projects. So when the board hears about a competitor deploying, say, a big data analytics suite and wants to follow suit, these resources are stretched. All of a sudden project backlogs build up, overwhelming central IT teams that then become the bottlenecks holding back progress.
To get around this dilemma, IT–out of necessity–will create shortcuts, usually by creating point-to-point connections or integrations between systems. Less attention is paid to the fact that each point-to-point connection creates tight dependencies between the applications, making any future changes a costly, resource-heavy process.
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All of this undermines ITs ability to deliver, and ultimately drives a wedge between the IT department and those using technology in the wider business. These users inevitably become frustrated with central IT’s inability to deliver on new projects and end up purchasing their own technology tools. This is the basis of the ‘Shadow IT’ phenomenon that has risen up the agenda in recent years.
The central IT operating model as we know it just isn’t sustainable. With digital forces knocking down the door, central IT has to evolve and move towards a more decentralised model.
The new IT operating model
So what does decentralised mean in this context? In short, instead of trying to deliver all IT projects themselves, the IT team’s new role centres around building and operating re-usable assets that the rest of the business can use to create the solutions they need. Essentially, part of IT is turned into IT-as-a-Service (ITaaS).
This is where APIs come in. Modern APIs are more than just a string of code that only IT architects can understand. They provide a common way for any developer to discover and access certain data and capabilities.
Importantly, they can be made more widely available to a broad developer base within organisations. The APIs that IT creates become the building blocks that the rest of the organisation can use to develop their own applications or processes.
Using APIs, IT now has a control point for data and applications and can see which consumers are calling the underlying application and what data they are consuming. This visibility and governance is a far cry from the point-to-point shortcuts that IT relied on before.
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Instead, IT’s role now evolves into creating an environment that empowers the wider business to discover, reuse and produce the assets they need, essentially ‘Lego-ifying’ the business. This vastly improves the speed at which an organisation can deliver, as projects no longer need to be built from scratch.
By making some modifications to standard IT project delivery, these APIs can be built as part of the project delivery. The methodology is straight-forward once teams have done it a couple of times.
The key to this approach is that it shifts the IT strategy away from just running faster and delivering more projects and toward working more intelligently to open up reusable APIs, enabling other lines of business to self-serve.
There are over 17,000 open APIs on the web, and each one is a building block for developers to create new applications. Every app on every smartphone uses at least a few of these building blocks, from maps and payments through to machine learning algorithms and telephony services.
These common building blocks mean that developers have no need to build their own services from scratch, and instead can concentrate on building innovative applications. They also enable developers to build faster by focusing on building value on top of what is already there.
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This is what the API economy is all about: creating value chains of APIs to build value-add applications and services. To make the most of this external API economy, organisations first need to create an internal API economy. IT needs to lead the charge by unlocking core infrastructure with APIs.
APIs free critical data from legacy systems, making it easier for the wider business to connect applications, data and devices via a series of reusable building blocks that are managed by IT.
Opening up data access this way allows organisations to change the way they create and deliver services. Think of this as IT-as-a-Service, whereby IT-owned capabilities are essentially offered as a service to the rest of the organisation.
Ultimately, this approach is critical for success in today’s digital economy. By removing the burden from IT and empowering the wider business to deliver more of their own outcomes, IT ceases to be a bottleneck and can focus on the big ticket initiatives.
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Now, an organisation’s success rests on every department and their collective ability to make the most of their shared APIs. Even during periods of intense demand, IT’s core responsibility is to make sure the wider organisation has what it needs, rather than to try and do everything itself.
This is more than just a viable approach for any organisation; it’s a necessity. Enterprises are on average adopting over 375 SaaS applications, with the number expected to grow to over 425 by 2018.
Changing IT’s role to that of a facilitator of IT capabilities not only reduces the load on central IT to focus more on the big ticket initiatives, it also allows the rest of the business to be more agile and deliver more themselves. By creating an internal API economy to be more agile, organisations can ready themselves for the next wave of technology trends.
Sourced by Ross Mason, founder and VP of product strategy, MuleSoft
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