In 2020, a year of upheaval and unparalleled challenge many companies are belatedly coming to the realization that they need to undergo digital transformation through API integration to thrive in the next decade. In spite of the tragedy and disruption caused by the pandemic, the old adage of a crisis spurring a new wave of innovation rings true.
Businesses around the world are embracing a new way of working, a new way of collaborating, and a new way of growing. A Deloitte survey found that businesses with high digital maturity were three times more likely to report higher than industry average net profit than lower maturity businesses. From accounting to shipping, embracing an API strategy as part of a digital transformation initiative will make processes run more efficiently for all aspects of the business than ever before. Managers and business owners will be able to accurately track performance levels, identify issues, and increase productivity.
Defining Digital Transformation
Digital transformation is a term that marketers love, and it can be easy to underestimate the complexities involved in the process. Therefore, it is essential for companies to understand what it means for their businesses and to identify priority areas within the organization that can be digitized in alignment with their goals.
There are two aspects to digital transformation:
- Digitization of Processes: This involves the deployment of digital technology into the different processes of your business. The integration of technology would then transform the way your company operates. For example, warehouses can now use software that measures the temperature of storage in real-time, as well as forecast the arrival and movement of goods.
- Digitization of Culture: Embracing digital transformation and ditching the age-old “way of doing things” requires a change in approach and company culture. It’s essential to take your employees and colleagues with you as the business modernizes.
Digital transformation will look different for individual businesses. Some will already have some of the latest technology in place, while others will be starting further behind. Industry will also have an impact on requirements; for instance, a manufacturing plant will have a very different set of priorities than a service provider.
These variations make the definition of digital transformation challenging. In general terms, it can be defined as:
“Digital transformation is the integration of digital technology into all the processes within your business. It requires fundamental changes to the way your business operates and delivers to customers. It is also adopting a mindset shift in terms of embracing risk and continually reviewing whether your business is running as efficiently as possible.”
Why Digital Transformation Matters
One of the key themes that emerged from the pandemic is the resilience of companies that have already embraced digitalization. Ecommerce is a good example of an industry that has thrived during the pandemic, seeing 16.5% year on year growth worldwide. It is evident that digitized businesses, and those that have adapted quickly, have fared much better than their non-digital peers.
The World Economic Forum has recently published a stark warning for businesses: Go digital, or go bust. The article cites the example of gyms that offered live online classes to members continuing to thrive, while gyms that failed to embrace technology have been left behind.
It is important to look beyond the pandemic and understand which businesses will be thriving. They will have not only embraced digitalization but also implemented the right technology in the right areas.
Getting this right is a matter of business survival.
Digitization of Operational Processes
To gain a significant edge over competitors, businesses are embracing API strategy to connect and enable the Internet of Things (IoT). It’s a term that has been repeatedly mentioned, but what does it mean? According to the Cambridge Dictionary, IoT can be defined as: “Objects with computing devices in them that are able to connect to each other and exchange data using the internet.”
For example, IoT has been proven to transform the accuracy and efficiency of local, national, and global supply chains in the following ways:
- Real-Time Inventory Tracking: A key element of IoT is the advanced inventory tracking capability, taking it beyond location and giving companies the ability to track storage temperature, movement, and the method of transportation by means of connecting cloud and on-premise business applications and systems via API integration. This transparency helps managers to ensure the products get to the end user in the best possible condition.
- Forecasting: Intelligently utilizing the data, IoT helps businesses to forecast shipping and storage demands. By integrating these systems to real-time tracking applications via API, businesses can accurately predict when inventory will arrive or depart to the minute will enable teams to efficiently prepare ahead of time.
- Efficient Supply Routes: Another aspect of data analytics is the ability to identify the most efficient shipping routes for inventory. Warehouses may handle hundreds, if not thousands, of deliveries a day. Any small changes in shipping routes – for example, bundling multiple deliveries on one journey – can save businesses thousands of dollars each year.
- Increased Flexibility: Research suggests that smart supply chains, using API-connected IoT devices, can respond quicker and more efficiently to abrupt changes – such as the Covid-19 pandemic. Once again, the ability is from the ability to analyze data and allow companies to quickly create and implement contingency plans.
- Resilience: The four factors above each feed into a more resilient, robust supply chain. The transparency, forecasting, and flexibility leads to a strong supply chain, ready to respond to any challenge thrown at it.
With minimal paperwork, updates in real-time, and integrated processes via API integration, it is clear those businesses that embrace digitization will gain a competitive edge.
A recent survey of UK and German businesses found that only 5% of British respondents felt they were fully digitized. By comparison, a quarter of German businesses claim to be fully digitized. These numbers demonstrate that there is a huge opportunity for companies who embrace digital transformation today to get ahead in both these countries and around the world.
How to Digitize Efficiently
The first factor to consider is data protection in order to protect your business, partners, and customers. Legislation on data protection has become increasingly stringent globally. As shown by the EU’s GDPR, these laws have proven to be far-reaching and can impact all businesses.
Fortunately, digitizing your business will bring you into line with those legislations as it fulfills the requirements around transparency and traceability. However, it is worth checking with your legal team for guidance before pressing too far ahead with the transformation.
The other factor to consider is business goals, and whether the technology or products exist in order to help you achieve those objectives.
In more general terms, undergoing digital transformation can be a complicated process for businesses. Here’s how you can do it right:
- Identify the issues: Take a review of all the manual processes, identify what can be done more efficiently using technology. And then apply the right solution to those processes. This can be achieved through a consultation process, where managers from different parts of the business can provide relevant feedback to a leadership panel. The panel can then use the information and criteria to identify possible solutions.
- Deploy the Right Solutions: It’s essential to utilize the right solutions to drive the digital transformation of your business. Using the most suitable API management tools, CRM software, and other such platforms can significantly increase the chance of success.
- Ensure the team is on board: One of the anxieties behind digitization is the perceived threat to jobs. Ensure that your employees and colleagues understand what is happening and offer training to upskill where necessary. Involving team members in the consultation process is one way to allay concerns, Transparency is also critical for retaining support from across the company, from the board members to the workers on the floor. For the transformation succeed, it’s vital for stakeholders to be on board.
- Implement the changes in increments: Trying to do everything at once rarely ends well for businesses. Setting up a plan of action that employees, colleagues, and other partners can view will help smooth the transition. Focus on a few transformations at a time, and ensure each stage is complete before moving on to the next one.
The key here is to take a holistic approach and a broad view of the process. It’s vital to bring together the tangibles (business processes, operational transparency) and the intangibles (employee morale, ease of use). The mechanisms of the processes, the technical solutions, and the human input all needs to be in synergy.
Embracing Digital Transformation
The digitization of businesses and commerce is an inevitable consequence of technological progress, with the pandemic forcing businesses to undergo digital transformation earlier than anticipated. While the initial costs may seem high, it’s clear that this investment will pay off – if the transformation is handled in a diligent and effective manner.
It is critical to keep the goals of the business in mind when implementing the digitization process. The general objective of digital transformation is to make the processes more automated, efficient, and transparent. The real-time analytics capabilities of IoT can be transformative in terms of revenue and cost savings.
There’s no better time to embrace digital transformation. The value of process automation and digitization has been increasingly evident in 2020, and with 2021 looking increasingly like a year of opportunity, now is the time to embrace an API strategy as a method towards acceleration digital transformation initiatives.
