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How APIs Will Revolutionize Product Configuration In 2018

  • There are over 19,000 Application Programmer Interfaces (APIs) currently available on ProgrammableWeb today for anyone to use in creating or extending new apps, integration adapters or extending existing platforms. Private APIs in enterprises easily number in the millions.
  • APIs that enable Cloud-based integration is growing rapidly with ProgrammableWeb having 1,316 APIs, 970 Software Development Kits (SDKs), 790 source code samples, 112 mashups and five frameworks.
  • API Management platforms are proliferating, making the consumption of a broader base of APIs possible, further increasing the value of existing ERP, PLM and CRM systems.
  • Cloud-based businesses are defining “experience APIs” specifically designed to streamline the online buying and order fulfillment experience with NetFlix setting a quick pace of innovation in this area.

APIs Are Growth Fuel

APIs (Application Programmer Interfaces) enable diverse apps, systems, and platforms to connect, complete a wide range of tasks including transactions, share and synchronize data, and report back on shared system performance. They are a set of software modules, tools, and protocols that enable two or more platforms, systems and most commonly, applications to communicate with each other and initiate tasks or processes including the defining and customizing Graphical User Interfaces (GUIs).

By integrating diverse databases, apps, and platforms, APIs are a powerful catalyst for creating new businesses, defining existing new product innovation strategies, and re-inventing an entire business. APIs are proliferating across centuries-old manufacturers and are the glue that makes startups thrive. The most consumed APIs include Amazon Web Services (AWS) Simple Storage Service (Amazon S3), FedEx Web Services API, United Parcel Service API and Pitney Bowes API for logistics. Also, D&B Direct, Experian Connect API, and the popular Salesforce APIs for sales enable millions of transactions a day as does the Twilio Notify API and Box APIs streamline interdepartmental integration across departments and platforms.

The Deloitte Insights article, API imperative: From IT concern to business mandate delves into how APIs are enabling enterprises to attain greater agility, speed, and scale while pursuing new business initiatives. APIs are freeing enterprises up from the constraints of legacy IT, enabling more efficient onboarding of suppliers, partners, and distributors from outside their businesses. The following graphic from the study illustrates an APIs’ logical architecture.

Where APIs Will Revolutionize CPQ And Product Configuration

Closing the gaps between what engineering defines, production can deliver and what sales can sell will drive more sales wins. A smart approach to fixing this problem is to use APIs to create a greater system and process integration across the PLM, ERP and CRM systems. With Configure-Price-Quote (CPQ), Configuration Lifecycle Management (CLM) and product configuration all dependent on how synchronized these three systems are, the more a company wants to sell the more urgent this issue is.

The potential to revolutionize product configuration with APIs is great. As product configuration relies on a wide variety of systems, databases, and processes, it’s are what APIs are designed to solve.

Here are several types of APIs that will revolutionize product configuration in 2018:

  • Analytics and Reporting APIs – Making advanced APIs available for tracking the performance CPQ, Quote-To-Cash (QTC) and Configuration Lifecycle Management (CLM) workflows will provide insights into how to best improve product configuration, production and selling performance.
  • Bill of Materials (BOM) Integration APIs – Instead of having to take each approved quote and translate its contents into a unique BOM that will drive production, APIs are being created to automate this process. With the most common custom configurations defined by a series of APIs, there’s no need to translate a quote into a BOM. APIs query the approved quotes and deliver the configuration model(s) to the production systems in a predefined BOM structure ready to be produced.
  • Geometric and 3D Modeling APIs – Being able to provide prospects what a customized product will look like visually increases sales. That’s the goal of scaling geometric and 3D modeling APIs that can provide accurate, quick rendering of configured products. These APIs will also enable a 3D rendered image on any device, anywhere and the option of saving it for future reference.
  • Graphical Interface And App Workflow APIs – Improving usability and what the CPQ and CLM app user experiences across the many screens needed to get work done is the goal of this API group. Look for more APIs to support responsive design, or having CPQ and CLM apps flex, adjust and optimize themselves for a given device. From laptops to the smallest smartphone screen, APIs with responsive design will deliver an excellent application experience.
  • Price Management APIs – For manufacturers with a broad product line sold through direct, indirect and partner channels globally, keeping synchronized on the same price list is daunting. When pricing is managed manually, too many errors occur, and gross margin gets sacrificed. Look for Price Management APIs to gain momentum as the challenge of keeping pricing synchronized across all selling channels becomes tougher with each new product introduced.
  • Warranty Management APIs – Warranties are inherently rules-based and could be automated using APIs for their main terms, conditions, internal costs, and pricing. At the same time, additional APIs to calculate the Return on Investment (ROI) and key financial metrics of warranty programs could save hundreds of hours a year of manually-based financial reporting.
  • Upsell, Cross-Sell and Win Probability APIs – Win rates, calculating the probability of winning a deal, recommending products to upsell and cross-sell could all be automated using APIs. Machine learning is already making win probability data available. Calculating upsells and cross-sell based on a customers’ previous history gained via API integration will increase the average deal size and company-wide gross margin.

APIs Are Powering A Configuration Lifecycle Management Revolution In The Cloud

The direction Cloud-based APIs are heading is toward providing greater predictive and cognitive intelligence. One of the primary catalysts making this possible is how well-integrated many APIs are today with machine learning systems and platforms. Also, machine learning platforms are providing comprehensive APIs for CPQ and CLM systems to consume. As this progression continues from APIs being relatively simple, binary commands to enabling greater predictive, prescriptive and cognitive intelligence, CPQ and CLM strategies will directly benefit. The graphic below shows the progression of APIs by the process and information area, enabling companies to move from reacting to orchestrating CPQ and CLM strategies.

Bottom Line:

Driving more revenue with CPQ needs to start at the API level and scale up the technology stack, increasing quote-to-close rates, upsells and cross-sells across all sales channels.

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