Digital Transformation: Getting Leadership, Funding, and Metrics Right
In this series of blog posts, we’ve been delving into the common ingredients we’ve discovered in working with hundreds of enterprises on their digital transformation journeys. Previously, we explored vision, one of three broad digital transformation concepts. Here, we will discuss the key aspects of alignment: leadership, funding, and metrics.
As Conway’s Law observes, systems reflect communication patterns. If your organization is siloed, your systems will be too. These divisions can fragment the brand experience your company presents to end users and hinder your company’s ability to change. Teams typically grow accustomed to existing methods and incentives, so don’t expect change to occur organically. Because digital transformation relies on not only deploying new technologies but also adopting new organizational approaches, leading organizations drive change from the top.
A top-down commitment is required to achieve the necessary cultural alignment. Apigee customer Magazine Luiza, whose omnichannel strategy has helped it thrive in a tough Brazilian economy, made this point clear in its Q4 2016 earnings statement, writing, “Technology [must move] from the background to center stage—and [be] seen as the brain of the business … Hierarchical structures, paralyzed by excessive bureaucracy, the fear of change, and attachment to past successes, usually strongly reject the digital culture.”
Modern business demands agile operations. API programs typically struggle when saddled with funding models, development cycles, and governance processes built for waterfall methods or other legacy approaches. Explicitly funding the API program as a platform can free teams to use data and iterate without having to frequently lobby for more money or navigate organizational bureaucracy. Organizational processes that support agile digital product teams are mandatory.
Because APIs are at the heart of modern business interactions, leading enterprises typically embrace metrics rooted in API consumption patterns. Traditional enterprise ROI metrics assume certain conditions: long payback periods and predictable patterns around transaction volume and pricing strength, for example. Digital business operates under different conditions, such as shorter opportunity windows and more fragmented customer segments, and these require different metrics.
Arbitrary metrics are even less useful than no metrics. Avoid measurements that are not connected to business results, such as the number of APIs produced. Focus on metrics that reflect API consumption and how APIs drive transactions; for example, which APIs produce the highest-value transactions per call, which APIs generate the highest partner and developer engagement, and which APIs are decreasing time-to-market for new products.
Leading businesses use metrics not only to inform new strategies but also to align leadership. Executive sponsors support things they can see—such as an API that’s attracting substantial developer attention or accelerating delivery of new products. Enterprises can accelerate their transformations by using API metrics to unite leaders around digital strategies and justify continued platform-level funding for the API program.
Coming up next, we’ll explore the final big topic that’s key to succeeding in digital transformation: execution. And for more on these topics, check out the eBook, “The Digital Transformation Journey" and explore Apigee Compass to get tailored recommendations for your company's digital journey.