Making The Leap To A Demand-Side, API Product Mindset
Romi Stein is CEO & Co-Founder of OpenLegacy, leading its strategic vision of digital-driven integration for legacy systems.
The man was visibly frustrated as he explained to me that over the past year, the team he had built had come nowhere close to achieving its goals — and his job was now potentially on the line.
He was the chief architect of a bank that had staked its reputation on its ability to engineer a digital turnaround. A year after taking its first steps, the bank had little to show for its efforts.
Unfortunately, these conversations are not uncommon.
Over the course of my career, I’ve had the opportunity to talk with the leaders of many enterprises with legacy technology. These are companies whose critical infrastructure is housed in mainframes, midrange systems or legacy applications: powerful but unwieldy pieces of technology not known for ease of integration.
Nearly all of these leaders aspire to be more responsive to customer needs. Many acknowledge that the lack of a true legacy strategy — a point of view on how to best harness the capabilities of their legacy systems to serve customers more effectively — is holding them back.
These leaders often identify digital integration with legacy systems as a critical element in the transformation efforts they’re driving. They’re right. But digital integration alone is not enough to drive the change that they need.
Digital integration is the process of creating digital representations of complex legacy assets that can be used in launching new services. For organizations that still operate in a traditional development mode, digital integration on its own is like bolting a fancy new set of pipes onto a fundamentally outmoded process. A horse and carriage is still a slow form of transportation compared to an automobile, no matter how high-performance the axles.
Ultimately, the enterprises that are most successful at achieving digital transformation embrace a mindset shift in their digital organizations. Specifically, they evolve from supply-side thinking to demand-side thinking when it comes to their digital assets and properties.
What does this mean?
Consider the bank whose disillusioned architect I met a year after the start of a digital transformation initiative. The bank was running on a mainframe, using an enterprise service bus (ESB) to connect different application and architecture layers.
When the development team was tasked with launching a new mobile application, it began by taking stock of what assets its ESB enabled it to access from the mainframe. From there, the team designed a mobile app building on those existing transactions and integrations.
Critical consumer demands uncovered through market research (for example, the ability to open new checking accounts directly through the mobile app) were deprioritized because the integrations didn’t exist. And the process of development was excruciatingly slow because the teams building digital services needed to also have firsthand experience with the ESB.
At the time that I met the chief architect, the bank’s mobile app had not yet launched. But it’s not difficult to predict what would have happened. Most likely the mobile app would have flopped, falling far short of customer needs and expectations. The bank had followed a supply-side model, beginning with available assets and integrations and asking, “What can we do with the resources on hand?”
In contrast, consider a bank following a very different approach. The bank starts by researching what it would take to develop a best-in-class mobile application. It identifies a user need — say, the ability to request a real-time line of credit increase on credit cards to fund big purchases. This interaction isn’t currently supported. So it invests in building a set of APIs to facilitate an interaction between mobile app users and information housed in its mainframe systems.
Because the bank doesn’t know how frequently users will leverage this capability, it builds for scalability by leveraging serverless technology. In fact, the team recognizes there’s a lot it doesn’t know and that there will probably continue to be a stream of iterations after launch. So it constructs the mobile app with a microservices architecture, which gives the bank the ability to continuously launch new microservices as it monitors utilization.
This bank exemplifies what I think of as a demand-side mindset, which begins with the question of “What do users want?” and views APIs as products built for internal development teams in their goal of delivering on customer needs. In the current competitive environment, with customer needs changing more quickly than at any other time in history, a demand-side mindset is the key to successfully competing in the global marketplace.
The differences between the supply-side mindset and demand-side mindset are vast, ranging from architecture to team composition to even the fundamental definition of success. For this reason, while digital integration with legacy systems is a prerequisite for modernizing development efforts, I view it as just one step in the transformation of how enterprises with legacy infrastructure deliver value to their customers.
Ultimately, digital integration must be accompanied by the right cultural shift — a pivot toward an API product mindset — in order to fully unlock the innovation potential of organizations with legacy assets.
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