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Exploring the Digital Value Chain: What to Consider When Thinking About Your First API Program

McCormick & Company, most well-known for its spices and seasoning mixes, has been around since 1889. And yet, this Fortune 1000 firm that got its start in the 19th century is a prime example of a 21st century digital business.

McCormick & Company, most well-known for its spices and seasoning mixes, has been around since 1889. And yet, this Fortune 1000 firm that got its start in the 19th century is a prime example of a 21st century digital business. Aiming to reach digital consumers, in 2013 McCormick introduced FlavorPrint, a service that allows people to create customized flavor profiles and receive personalized recipe recommendations through McCormick’s website and grocery store chains’ mobile apps.

McCormick’s strategy reflects the priority that businesses are placing on adding a digital dimension to the experiences of their customers, employees and partners in today’s digital-first, mobile-driven economy.

 

As consulting firm Accenture observed in a report, “Sooner or later, every company will have to deal with the impact of digitization on its business model. Innovative digital solutions can reduce costs and add value at every stage of a product’s lifecycle, both within each stage of the value chain and across its entirety. Digitization enables businesses and governments to operate with greater transparency and efficiency, and it boosts consumers’ access to everything from innovative products to public services.”

However, the rapidly growing expectation of customers, employees and partners of a digital experience presents a slew of challenges. How does an enterprise align with the needs of this new environment, especially where smartphones and tablets are concerned?

 

Mobile apps are often the very definition of a consumer’s relationship with a business these days, yet most internal and customer-facing systems were not built with mobile in mind. The user interface is often tightly coupled to the back end, making it difficult to build a mobile app that has the same functionality as the mobile device it was designed for.

The solution is careful attention to an organization’s digital value chain – the series of steps that exist within a digital business and link enterprise data all the way from back-end systems through to the apps and consumers that benefit from the data.

 

Much like a physical value chain, where a series of actions takes place to deliver a product to market, the digital value chain connects users to apps to developers to APIs (and API teams) to enterprise data and services in the back end.

Because enterprise systems are stable, they are often slow-moving and do not allow for core systems to keep up with market evolution. By thinking as a platform – that is, putting APIs between the database and the apps – enterprises achieve agility and flexibility while taking advantage of the stability of those systems.

By exposing APIs to developers, the API team can access core capabilities at the back end and re-compose them into new mobile apps – and do so quickly. That’s crucial because speed is the name of the game in the mobile era.

The API team is like an internal partner team, working with an enterprise’s distributors and resellers, and managing which products are available.

These developers might be within the company, work at a partner organization, or operate independently. Regardless of where they sit, developers represent a new channel, and the better their product (the app), the better the engagement with end users.

The API team builds the enterprise APIs that expose back-end data and services to enable app developers. Developers use those APIs to build apps. Traditionally, enterprise APIs have been associated with “exposure,” which describes the transformation of existing back-end capabilities, resources and data into APIs. But the focus of APIs in the modern enterprise has been expanded to include “consumption,” which grants developers access to those same resources so they can build and deploy apps.

In fact, businesses from Netflix to Walgreens have found tremendous advantage in opening up their data to innovative developers outside of their companies and enabling them to create new experiences for customers. An open API enables the gathering of important data about how developers build on an API; this helps an organization create a differentiated experience that attracts more developers.

Getting its digital value chain in order can push an enterprise toward becoming a platform for innovation. The result: better ability to compete in a world of new expectations and compelling opportunities.

 

Brian Mulloy is the vice president at Apigee. He has over 20 years of experience ranging from enterprise software to founding a Web startup. Prior to Apigee, he held executive positions at Swivel, a Website for social data analysis, Grand Central, a cloud-based offering for application infrastructure, and BEA Systems.

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