When we hear the word "disruption" we usually think of start-ups taking over a particular space through an innovative approach. For example, instead of renting an expensive hotel room or car, start-up companies utilize the power of the shared economy and built apps for us to save money and access those resources on demand. Another example can be with music. No longer do we buy music and deal with storage. Instead, streaming music is easy, painless, and we can use our storage for other apps and files. However, start-ups shouldn't be the only companies that should have the disruption mindset. Businesses of any type, in any industry, should embrace disruption to break away from the status quo. If they don't, eventually, somebody else will do the job better and grow bigger as a result.
Companies that fail to embrace the application network and adapt to the digital age suffer consequences by losing their competitive edge. This is especially apparent in Fortune 500 companies; of the ones on the list in 2000, 52% have either undergone some merger and acquisition activity or went bankrupt. But it does not have to be this way.
Ross Mason wrote an article in TechCrunch giving examples of three companies that are winning in today's digitally connected world.
- General Electric (GE) is looking to harness the strength of IoT and extract analytics from hardware. To do so, GE Digital was created in September 2015. In order to scale for innovation and growth, GE Digital's IT team understood the importance of building reusable, self-service assets and infrastructure so the company can operate in a connected ecosystem. Whether it is analytics for an airplane turbine or analytics for a solar panel, GE can quickly implement its technologies across different verticals because of its API-led operating model.
- Expedia's APIs allows affiliates to build tools of their own that promote hotel, rental, and airline deals. This benefits both Expedia and the affiliates; Expedia gets an additional source of revenue and the affiliate gets to provide value to their readers. Expedia's explosive growth is due to their API strategy as 90% of their revenue is affiliate generated.
- Citibank is a 200-year-old bank that started to feel the pressure from fintech start-ups. From simple to use mobile banking to self-investing bots, start-ups were slowly taking away market share of personal banking and investing. Now Citi is undergoing restructuring to build developer ecosystems for a mobile-first experience with their newest division, Citi FinTech.
These three companies have undertaken bold, innovative initiatives, and that is going to be the secret of future enterprise success. In the era of cloud applications and software, with competition fiercer than ever and the pace of change accelerating, IT teams cannot continue to use the traditional operating model. With more apps and integration work, the IT backlog is filled to capacity. The more IT lags, the longer it takes the business to introduce new products to market and therefore the longer it takes to make money.
The shift we see in IT's role in companies that are winning in this environment is due in large part to the power of APIs and the culture shift they can enable. Instead of focused projects and deliverables that aren't reusable for other teams, IT teams are now building the foundation to scale and innovate with reusable assets and infrastructure. The company, its customers, and its stakeholders reap the rewards of building off existing capabilities or expanding on the underlying service of the API provider.