How to Build Adaptive Apps and Digitally Transform a Business

Apigee’s annual I Love APIs Conference commenced today in San Francisco’s Fort Mason Center. CEO Chet “Awesome” Kapoor led opening proceedings, clearly outlining the key themes that will be woven throughout the two days of industry presentations.

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Kapoor — reminding me of The Lego Movie theme song by stressing in both his keynote and the panel following that, well, everything is “awesome” — started by showing the growth and positioning of Apigee. This year, the API management provider acquired predictive analytics startup InsightsOne and gained $60 million in additional investments.

It is these two milestones that hold the key to where Apigee sees APIs heading. The overall message from Kapoor is clear: Businesses across all sectors are undergoing a digital transformation that will allow them to be more adaptive, and APIs are making that happen (hence the new investment). And at its heart, being adaptive means using APIs to analyze data and make predictions to pre-empt what customers and other business relationships need next (hence the acquisition).

Kapoor points to a few examples: Walgreens is clearly the poster child (and with good reason) for the API economy here at I Love APIs (it was also singled out for two Apigee Accelerator Awards immediately following Kapoor’s keynote).

Walgreens — an established brick-and-mortar business with outlets across the U.S. — has been able to generate 40% increases in sales for its photo printing services in a completely new revenue channel from its API. By offering a prescription refilling services API, it has also created a new wave of customer experiences that sees app (mobile and Internet) customers spend as much as six times the amount as other customers who visit their stores.

Kapoor also highlights how APIs and predictive analytics are improving healthcare. He mentions both Independence Blue Cross and Kaiser Permanente. Independence Blue Cross has been able to use predictive analytics to identify potential complaints and address issues proactively, creating business solutions and efficiencies that are six times more effective than traditional approaches.

Kaiser Permanente has 9 million members in its health management organization. It has a widespread API program that most recently has been able to merge both APIs and health care data to create apps for wearables so that patients can manage their diabetes directly via their wristbands.

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“You have to expand the digital value chain,” says Kapoor. “You need to take data that comes from the Web, then have data scientists create predictive analytics, and then have developers build adaptive apps.

“The technology is there to get you on your way to be adaptive, so if it’s not working, what’s holding you back?” Kapoor asks.

To create this paradigm shift in how businesses digitize their assets and create adaptive solutions suited to their customers and ecosystem partners, Kapoor argues that the next level of activity needs to focus on the people across a business’ operations.

He suggests three specific strategies for the roles of business, IT and developer:

1. “For the business side, you need to appoint a C-level digital leader.”

Kapoor points to the 60% of Fortune 500 companies that now have a chief digital officer, even if that isn’t always the title used, but stresses that any company needs to ensure that the digital strategy is a responsibility given to a C-level executive.

2. “For IT, you need to master 'two-speed' IT.”

Kapoor calls the first gear of this strategy to be using APIs in system of record, like billing systems. (He mentions that these are often referred to as "southbound APIs.")

Kapoor encourages IT to also be focusing on the top gear — that is, using APIs to empower the systems of engagement that can run at pace of the market. (He calls these "northbound APIs.")

“This is something IT have to get used to,” Kapoor urges.

3. “For developers, we encourage developers to innovate and iterate by building adaptive apps.”

Adaptive apps are those that use data and predictive algorithms to “serve the right experience at the right time to everyone the business serves.

“Embrace the art of the possible, become adaptive,” Kapoor concluded in his opening speech to a packed room, eager to continue the conversation.

ProgrammableWeb will be live-blogging from Apigee’s I Love APIs Conference today and Thursday.

Mark Boyd is a ProgrammableWeb writer covering breaking news, API business strategies and models, open data, and smart cities.

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