To innovate: why and how?
66% of people responding to an innovation study published in 2015 by Deloitte indicate that innovation is important for growth. One approach based on APIs offers the necessary flexibility and agility to create an optimal customer experience and manage personalized integration within your application architecture.
Innovation is vital, whatever the size of your company. Whether it is in relation to a start-up, an SME or a big account, it must attain three objectives:
To be different from the competition
Your company is not alone! And even if you are in a niche market, there are certainly more or less direct competitors. Innovation is not an end in itself. It should offer something unique to your customers. Bigger innovators rely on popular products to make them even better.
To respond to customer needs
The needs of customers change constantly. They are more and more versatile but demanding! However, it is difficult to respond to their aspirations and hope for the long term if you aren’t ready to innovate.
To attract the best talents
People who are inspired and innovative, if not iconoclastic, want to work in dynamic companies. The best talents wish to be challenged!
And we shouldn’t hesitate to test ideas and to start again. Failure is frowned upon in France. However, it’s from the mistakes of failure that we learn the most. And it’s necessary to filter. ‘To innovate is to know when to abandon thousands of good ideas’, Steve Jobs reminded us. Thereafter, it is vital to rely on avant-garde technology, disruptive or stimulating innovation.
AI: not a magic potion
From the outset, artificial intelligence comes to mind. It has already had a transformative effect in a certain number of sectors of activities and services. But watch out for the buzz word. AI is not a magic potion. Only the druid Panoramix has mastered this recipe which he invented. Even if it tends to democratize, AI has remained a complex science. Speaking last December during an AI industrial event in New York, Cathy Bessant, director of operations and technology with Bank of America Corp, declared that the company decisions concerning AI must be taken by people ‘’who comprise customers, businesses, regulatory environments, business ethics and how technology can and must function’.
For Rob Alexandre, from Capital One Financial Corp, we shouldn’t over react. ‘’The advantages of machine learning are enormous; the offer of relevant cinematic recommendations for the landing of a rocket engine on a marine vessel’’. But the media hype is far from the reality. ‘’All computer usage cases to make a decision don’t change the automatic landing’’.
Organizations of today cannot remain monolithic anymore. They must therefore rely on APIs. These components will be used and reused by internal and in some cases, external stockholders, to foster innovation, improve customer experience and, finally, to generate more business.
API and ecosystem
Note the advice of Amazon’s Jeff Bezos: everything must be connected via an API. All new services must be built in this agile manner in order to support the commercial strategy of the organization. For the head of Amazon, it has consisted in seizing new opportunities and creating new economic models.
In allowing a faster and more granular approach of software development, micro services and APIs help companies to replace some of their traditional methods through more proactive services. In the numeric era, the number of open APIs – that is to say accessible to the public and normalized – has exploded. They are used by companies to encourage external talents to utilize mutualised resources.
Whatever its sector of activity, the objective is to develop an ecosystem. It will allow for the federation of organizations (customers, partners, competitors, communities of all sizes) in order to create value beyond the company.
The more parties involved, the more the ecosystem prospers. The key is a contractual, technological and business-favourable environment created by the ‘multitude’. In this way, open API banking speeds up innovation and collaboration. In time, they allow the creation of extensive banking ecosystems that can include more than simple financial services to improve consumer lifestyles.
These platforms respond to several issues of our society. Everything must be fast, easy to use, shareable, easy to access…API responds to these demands. According to a study from MIT Sloan School of Management, companies that make 50% or more of their revenue from digital ecosystems have higher turnovers and more significant profit margins than average in their industry.
Don’t be dependent on technology, even if it is innovating! Adopting a service-independent design is crucial. Technological trends come and go, but your APIs will be there long term. The best way to be successful is to rely on the “API-first” paradigm.