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Digital is disrupting the partnership ecosystem

How is digital technology and the process of digitalisation affecting the partnering landscape? In simple terms the impact is profound.

Let’s illustrate the point with a personal example.

Recently, a requested upgrade to an airline ticket using points lead only to disappointment. These points were on another airline but both belong to the same airline alliance program.

The feedback was that it couldn’t be done as the airline’s systems have not been integrated with the alliance program. Furthermore it would take at least another 18 months to get this done, even though the airline joined the alliance program more than a year ago.

Stories like this are sadly commonplace in almost all industries. As a result companies are winning or losing business based on their ability to serve their customers better.

The reality of the digital economy is that customers take their best experience in any industry and apply it to all industries.

Such moments of truth are increasingly impacted not just by how easily the customer interacts with your business but also by their experiences of other interactions in the broader ecosystem of partnerships.

How does a business easily and quickly tap into a broader ecosystem of partnerships? Why does it take an airline more than two years to integrate its systems to enable something as simple as allowing a loyal customer to upgrade using points from another airline?

The reason is complexity. Many businesses have layers of legacy systems interconnected with a patchwork of code that is often poorly documented.

Connecting these systems of records is a big challenge – and it’s an even bigger challenge integrating with the systems from external partners? Smart businesses are increasingly turning to APIs to sidestep the integration challenge.

APIs (Application Programming Interfaces) have been around for a long time, but recent innovations around web APIs pioneered by digital natives such as Amazon, Facebook and Twitter are now being widely adopted by businesses to accelerate digital transformation.

Take Walgreens – a 114 year-old pharmacy in the United States. They use web-based APIs to enable a digital ecosystem of partners that drive customers to Walgreens stores.

Enabling these digital channels through a self-service portal and an API program saves Walgreens the time and trouble of having to integrate with each partner. Partners can be on-boarded in weeks instead of months or years.

Returning to airlines, Transavia, a subsidiary of AirFrance, KLM Group is a great example of what the future of a “digital airline” ought to look like.

Transavia’s vision is to be Europe’s best digital airline and they have chosen to layer an API platform on top of their system of records to speed up their digital transformation.

The company is leveraging APIs to extend the airline’s digital ecosystem. Initially, the airline’s new API-based digital infrastructure will open up its backend information technology system as modern APIs so it can securely share Transavia data with business partners.

This will give its partners the opportunity to build a variety of mobile apps that incorporate real-time information about seat availability and pricing on its flights. In the future, Transavia is planning to develop an internal API infrastructure to streamline data sharing and create new efficiencies between its enterprise IT divisions.

It’s also encouraging the independent developer community to embrace its APIs to build more Transavia-powered apps.

Businesses like Transavia will prosper in the digital age. Businesses that refuse to adapt to the reality of new digital ecosystem will be rapidly taken back up the food chain, and the predators won’t wait 18 months to begin.

Chee Keong Law, Director of Channel and Alliances, Apigee