Hadis Nazari is the Founder and CEO, and Mohammedreza Mahmoodi is the Chairman and co-founder of Haami Digital Consultancy. This article by them will focus on Digital Leadership and the Digital Ecosystem.
The first hologram transfers of information began in the 1960s. A simple transition between protocols was feasible. From the 1980s, meaningful and remote information transfer became possible by equipping intermediaries with logic. The 90s were the decade of emergence of new platforms that allowed us to enhance the complexity and reliability of our messages. Coinciding with the start of the third millennium, APIs were born in the present meeting, and their management provided organizations with revenue-generating opportunities. From 2015 onwards, with the expansion of cloud services and computing and the provision of integration as a service, new standards were set in the industry. The pervasiveness of these concepts and the emergence of the API economy caused the need for a new concept among business and technology activities known today as the digital ecosystems.
Business ecosystems comprise partners, individuals, startups, and customers that access business services from digital platforms that organizations provide. There are many components in an API-enabled digital ecosystem. The business ecosystem partner creates a new platform from these services and decides to provide or sell it through an organization’s digital marketplace, which can provide access to customers.
The organization can provide IT solutions through other partners’ digital marketplace or platforms.
Identify the right partners.
Innovation in digital technologies has led to new business models to improve efficiencies and profits by delivering a unique value proposition at an improved margin by identifying the right partners and opening new pathways to innovation. With APIs coming into the picture, the traditional way of forming alliances is giving way to New Age digital alliances where engagement terma are automated and scalable. The API share of revenue of leading e-commerce portals is more than 60 percent. In the past few years, the API space has seen explosive growth and is rapidly evolving the potential to unlock new opportunities.
API prioritization framework
Based on the API polarization framework provided by Deloitte, product development prioritization in this area is based on two main indicators – attractiveness and feasibility.
Attractiveness refers to those factors that either provide a higher return, for example, services or products in high demand in the market or can be expected to have a good growth rate. Also, we would hope the revenue model of these options will be more stable. Somehow they differentiate us from our competitors. There is an ability to win new relationships and partnerships or support existing ones. It makes strategic sense. It is necessary to have the readiness to develop and enter this market.
Ecosystems’ management and growth
As APIs are being used daily, API Management is a vital component that helps businesses cope with dynamic changes between and outside the organizations and deliver what various companies, consumers, and partners need. There is an operating model required to manage ecosystems. Technologies are shifting value from manufacturers and distributors to companies that operate end-to-end platforms and provide outcomes as a service. For many enterprises, that means constant change and disruption and an increasing threat of market obsolescence. Operating models are ever-evolving, derived from employee, customer, and stakeholder feedback, the effectiveness of business processes, and the competitive landscape.
An operating model has nine interdependent components. These components are strongly influenced by and, in turn, influence each other. The enterprise culture as we know as digital culture, the digital governance or data governance,
financials on the forums, like decisions, performance management, talent acquisition and management, sourcing and alliances as we know as partnerships, organizationally structure, tools, and the future of vault.
As the final step, we should mention a five-step approach to sustainable ecosystem growth.
- We should adopt an agile approach. Go to the market and often iterate as you explore possible API strategies and use cases. Consider using lightweight prototypes and rapid experimentation.
- Enhance your talent model. For example, aircraft manufacturers hire aeronautical engineers to design products. Companies must pursue API strategies to hire the right people or re-skill existing people for the job.
- Get to know the data you already have. Many organizations have droves of raw data they have never used or thought of using. By working with data scientists to analyze these assets before embarking on an API Initiative, companies can better understand their data and the value behind those data.
- Curate consumer experiences. Help create synergies for consumers by lowering costs or curating novel products, sales funnels, service synergies, and any other offerings you have.
- Competitive advantage. Not competing with the price but through value will help you compete longer. The more sustainable the competitive advantage, the more difficult competitors find it to neutralize the advantages.
When we talk about digital leadership, in addition to what we need to consider as human resource leaders, leadership needs to use new digital technology. To succeed in the digital line of the business, executives must understand and invest in their application architecture, even if these areas are outside their comfort zone.
Four roles of digital leadership
- DX Strategy Plan
- DX Project Management
- DX Team Management
- DX Project Implementation
The essence of Digital Leadership
Digital leadership is about character, competence, integrity, capability, and results. Technology has become a business asset, just like people, facilities and partnerships are. Business leaders must be smart about technology, such as APIs that underpins their business success, including modern application architecture. Business leaders need to know enough about these technologies to check the claims of a supplier or partner that provides results. This often requires business leaders to have the trust and confidence of the technology leaders they can get help from. Business leaders can no longer leave technology to IT.
Once the business leader is involved in the project scoping and requirements road mapping, they quickly learn how to establish business priorities and ask for feedback on what operational and system changes are needed to be delivered. Building out a modern application architecture is the domain of technologies, but business leaders need to be involved in both decision-making and investment here. This level of investment is likely to be new and unfamiliar to the mass digital native startups. There’s an important balance here for a business leader to be smart about business while being savvy about the things that go into making a business successful, including technology. Technology was only the responsibility of CIOs and the IT organization. Now it is the responsibility of the CEO to know the key suppliers and how much to invest. So the business leader needs to manage relationships as much as they need the lingo. Both relationship and some technical equivalency are best.
Often, direct revenue is hard to attribute. Comparisons between before and after costs are sometimes extremely large. The improvement in employee productivity is also large. But don’t overlook the direct financial benefit and the ability to introduce new services and improvements faster. These are not soft benefits because they accelerate the pace of getting revenue from new services. Another financial benefit that sometimes gets overlooked is the money that comes from extending the life of capital investment by making an existing system available to solve new problems. APIs have modern architecture and are often deployed to allow firms to move forward to build new capabilities by harnessing the blatant power of their existing Transaction system. This can be a powerful contributor to revenue without major cost in the form of big capital investment.