One of the most notable effects that the coronavirus pandemic has had on organisations is its impact on digital transformation. Rather than abandoning their digital initiatives or putting projects on hold, the crisis forced organisations to significantly accelerate their transformation. Faced with a growing need to bring new digital capabilities and services to customers and employees in a very short space of time, IT teams saw their project pipelines grow by a fifth in the UK during 2020. However, the short-term urgency of the situation forced many organisations to take shortcuts to finish new digital initiatives quickly, without planning for the long-term impact. This has led them into a technical debt crisis, which must now be addressed to ensure that future innovation can continue unhindered.
Sliding into the red
The pressure to build and launch new digital products and services rapidly led many organisations to connect systems and data sources quickly, often using point-to-point integrations. However, this approach isn’t sustainable over the longer term, since it produces tight couplings between systems that limit how agile companies can be, and delay future innovation. By connecting various systems, applications and data sources with multiple point-to-point integrations, organisations end up with a very complex web of interdependencies that is difficult to understand and unravel. This severely limits how effective organisations can be in creating new digital products and capabilities in the future.
When circumstances change and services need to be updated quickly, the tight couplings between systems make it difficult to do so. It also becomes nearly impossible to re-use existing digital assets to power new products and services, since unpicking the tight couplings between systems to extract their capabilities could have unexpected consequences, such as service outages. In an environment where organisations are under near-constant pressure to improve digital offerings and capabilities, this approach is simply unsustainable.
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Paying it forward
Organisations must find a way to reduce their technical debt, by replacing tight couplings with a more flexible integration layer. As such, API strategies are becoming more important than ever. APIs create a loose coupling between applications, data, and devices, so organisations can make changes quickly without impacting their existing integrations or the functionality of digital services. It therefore becomes easier to accelerate innovation and deliver new products and services faster, without increasing the risk of business disruption or spiralling costs.
One organisation putting this into practice is Allica Bank, a new, digital-only bank that exclusively caters to SMEs. Rather than build its offerings around one core platform as traditional banks do, Allica is built around a more flexible integration layer, underpinned by APIs. When it needs to expose the data from a certain application or system, it does so via an API, without the need to write any code to connect the systems in question. This makes for a much more agile operation, as new services can be switched in and out as needed. For Allica, this level of agility has been critical to its ability to meet its customers’ needs for urgent access to credit in 2020. Moreover, the rapidly evolving circumstances that many of Allica’s SME customers face have meant that Allica has had to adapt its offerings regularly, which would have proven significantly more complicated had it relied on a rigid framework of point-to-point connections.
An unshackled future
Even after the worst effects of the Covid-19 crisis have passed, digital transformation will remain high on the corporate agenda as customer expectations for more connected experiences continue to rise. As a result, the reality is that many organisations will slip further and further into technical debt unless they choose a different path. A continued reliance on point-to-point integrations will hinder their ability to take their digital initiatives any further, creating an inflexible IT environment that limits their ability to innovate.
To avoid losing ground, organisations must therefore treat paying off their technical debt as a key priority for the year ahead. API-led integration strategies will therefore become more essential than ever, easing the constraints of tight couplings and freeing organisations to explore the full potential of their digital transformation journeys.