The API Catalog is becoming an important asset to every market leader’s business strategy. So should APIs be included in the 10-K?
A great API Product strategy appears to be an enormous factor behind the success of today’s digital market leaders.
Every enterprise is following in the footsteps of Amazon, externalizing their data and building out their core business functions as APIs for a decoupled architecture that offers reuse, third-party integration, and scale.
But are these two events related by correlation or causation? Is a stringent API Product management strategy directly behind the success of a company?
A recent report by Innosight certainly suggests so. Apparently, the more advanced your API strategy, the better your business results. We’re entering a stretch of accelerating change in which the lifecycles of large companies are getting shorter than ever, according to their study of turnover in the S&P 500.
The companies that can innovate — not just predict but invent the next customer demand curve, have the greatest chance at leading in their field, and that culture of digital innovation and third-party integration sits on API Product architecture.
Which begs the question of whether or not reporting on a company’s API portfolio is valuable enough — if not one of the most valuable items, in today’s digital backdrop — to include for investor decision-making?
A Strong API Product Strategy is the Success Factor Behind Every Industry.
Digital market leadership demands that APIs are managed like physical products (if that sounds familiar, it’s because it’s front and center on our homepage.), and so we call them API Products. They have owners, they are consistent, reliable, appealing, and world-class.
Across every industry, enterprises are implementing this mindset to API Products to modernize their IT departments and foster collaborative ecosystems for growth and innovation, spurring new partnerships and revenue streams, and greater customer experiences. Let’s take a look at a few examples.
In investment banking; Marty Chavez, soon-to-be CFO of Goldman Sachs recently announced his plan to rebuild the entire company around API Products, so internal and external customers can obtain better access to their data lake of market insights. “We are shifting this radically and shifting this fast, and we’re packaging everything we do, and actually, we’re redesigning the whole company, around APIs,” says Chavez. (Business Insider)
In retail banking, Citi has led the race using APIs for innovation and growth in banking by developing a secure suite of open APIs to allow authorized third parties to innovate new experiences and form new revenue streams. For more on this, see our recent article on Digital Banking Trends. It’s no secret that the industry’s newest strategy, open banking, and APIs are in a very serious relationship.
In the most obvious retail industry example, when we consider how Amazon’s infamous Jeff Bezos Mandate was adopted right as the company stepped into place as one of the most successful enterprises of our day, we get an instinctual sense of the importance of externalizing infrastructure through API Products. Meanwhile, Walmart is making waves with their Digital Ordering API Products and eCommerce program.
As for healthcare, it only makes sense that a strong and well-implemented API Product management strategy would be the goal state for a heavy-data industry so meticulous about keeping up with PI (Patient Information). Zane Burke of Healthcare IT News states that APIs will revolutionize the healthcare industry, though he admits there’s work to do. “Though there’s still a marathon ahead of us as we work toward this goal, interoperability has become the rallying cry for innovative providers devoted to putting the person at the center of care.” One company to watch here is Kaiser Permanente, who boasts a strong data/API strategy and is well-known for their Interchange API, which allows developers to create individualized health management apps. Again, a large cue to the push for APIs behind growth strategy.
ACI, in the payments realm, is another strong force leveraging the power of APIs, with an open RESTful API architecture program they are proud of – check out their white paper on “How Open APIs Present Financial Institutions With Choice and a Strong Business Opportunity.” They take the subject of API Products very seriously, opening with a heady would-you-rather for today’s companies: dinosaur or innovator?
The insurance industry is also moving towards API strategy. Like retail, insurance has been heavily affected by the demand for mobile accessibility over the last decade, as those in the state of an emergency often turn to a mobile device to get information on how to proceed. Where the mobile strategy goes, third-party integration follows close behind, and this, again, requires microservices architecture to support a suite of open API Products. See our CNA case study for more here.
But the 10-K form only asks to report products… so why would we report on the API Catalog behind them?
While intangible assets have a place on the balance sheet, they’re often glossed over with qualitative language in one line that could never begin to tap into the sheer goldmine of data, functionality, and monetizable API Products a company might be sitting upon.
As for the 10-K, currently the SEC (Securities and Exchange Commission) only requires public companies to list physical products — intangible assets are presumably too difficult to measure.
But what about companies who manage these assets (APIs) like physical products? After all, APIs should be treated as Products — this has been the digitalML message for years. The theory is shared by many of the most adaptive and forward-thinking businesses in the world; Take PayPal, for example, who leans heavily on its 3P strategy: Program, Product, and Portfolio. Queue Netflix, Google, Amazon.
Whether or not an API strategy is a part of a company’s plan is absolutely an indicator of how well that company will fare in a future drenched in disruption and the demand for greater customer experience.
The most scalable way to reinvent the customer demand curve with great customer experiences is by creating an innovative culture through open APIs; by obtaining local relevance through third-party integration.
The only way for large companies to straddle the realms of digital and physical is through a stringent, well-managed microservices architecture that treats APIs as API Products.
And all of this rests on what’s under the hood; what’s in the API Portfolio.
Key Performance Indicators for API Catalog Reporting.
So what about the API Catalog would prove worthy for public companies to report in the 10-K? We’re seeing that most enterprises hope to build out their API Portfolios to a suite of anywhere between 400-2,000 API Products to achieve their goal state. Our experts would argue that yes, it’s safe to say that if you’re far below that number, you’re already behind the leaders.
But it’s not simply the number of APIs, but the number of business capability APIs, that truly shows where a company stands in their digital transformation — and if that number depends on the domains that make up a company’s core business functions, then perhaps a few good KPIs to know for investment purposes are the API portfolio goal state for business capability APIs, and the percentage of progress to goal.
You do the math.
It’s a new science, the study of digital inventory. Not every enterprise has the ability to make it a priority. At least, they don’t think they do.
But right now, if we’re seeing 400-2,000 microservices built out across 10-20 business domains in all of the leading enterprises, we have to wonder if investors too wouldn’t find the state of your API Products to be useful information.
As the public sector, technology, and the rest of the globe change, it only makes sense that with change comes the need for updated legislation — after all, that’s what the greatest business are preparing for internally.
There are some of the opinion that reporting requirements should not be expanded, despite technological advances. But in the age where technology is being developed at an exponential rate — would it be such a bad thing, to set a few standards?
It’s one more thing to add to the list, that’s true. And, perhaps I’m biased here but, when we’re treating every API as an API Product as we should be, and ignite has the numbers of your every API Product along every stage of the lifecycle, updated and at ready, anyway… what’s one more reporting stat to add to the ol’ 10-K?
If you want to learn more about ignite’s API Catalog reporting capabilities, let’s talk.