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Want to Elevate Your Business Ecosystem? Embrace APIs and Open Systems. It's time for your tech to play nicely with others. Here's why business leaders need to harness the value of open systems.

By Ian White

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

As technology purchasers and users, so much of how we use business applications relies on the flow of data from open systems. Whether it's syncing payroll, identifying new business opportunities or pushing out platform alerts, open systems are key to successful business operations.

Business leaders need to ensure that their technology partners can adapt with them as their business changes and that their technologies will play nicely together. This means choosing partners who have invested in APIs and are committed to the philosophy of maintaining an open system. Without the binding nature of APIs and open systems, data remains siloed and limits our ability to create powerful software that fuels business transformation.

Related: Open API: What's Next?

The problem with siloed data

In the last couple of years, there's been an increased urgency for APIs and integrations to support broader business agility. In fact, nearly 80% of IT leaders indicated that Covid-19 made integrations more of a priority for their organization, and more than 60% indicated that they are allocating more resources towards integrations.

Despite the priority to increase integrations, it's not a given that all companies will embrace APIs and open systems. Many vendors still lock down their systems or have siloed data, which prevents adjacent technologies from building robust integrations against their API. Conversely, software consumers also lose out because they can't effectively combine all of their data.

Ultimately, this slows down the rate of innovation and can impact business outcomes. For business leaders, embracing an open system mindset is a bottom-line initiative, because organizations need flexible, resilient technology. As a result, harnessing the value of open systems enables you to elevate your business ecosystem, customer and people strategy, as well as innovation.

Related: Why Un-Silo-ing Your Data Will Boost Your Company's Efficiency and Productivity

Uplevel your business ecosystem

For software consumers, it's imperative to have a business ecosystem that embraces open systems. And as a business leader, it's your job to keep perspective of the larger goals and adapt your business to market, customer and employee feedback. Often that means identifying how to wrangle your data — but that can be a major challenge when your data is spread out across 50 different apps and vendors.

We know that the number of cloud apps used among enterprises is rising. In fact, the number of cloud apps used by organizations was up by 25% in just the first five months of 2022. But an oversaturated tech stack can weigh down your workflows and people when they're constantly switching between platforms and experiencing "system fatigue." Instead, find fewer partners who will help you build meaningful integrations. For example, if you outgrow your existing core HR platform, what happens to your remaining data and other platforms if they don't integrate with new solutions that you're implementing?

When selecting a vendor, you hope to be with them for a while, but make sure to vet if you can build on top of their API, if they embrace open systems, and that they won't prevent you from using your own data. Ask questions like: What does the data access control look like? Does this work across my entire organization? Is it configurable enough for the ways we want to share data?

The value of integrations is being able to swap out the systems that make the most sense for different stages in your company's lifecycle. In today's economy, successful businesses must be able to measure and adjust which business apps are moving the needle, and you don't want to be stuck with inflexible data and tools that don't integrate into the rest of your business ecosystem.

Related: 3 Steps to Profit With Shared Data Experiences

Drive improved outcomes for EX and CX

For companies developing software, customer and employee outcomes reign supreme. Increasingly, customers expect you to understand their needs and to have connected, personalized journeys. Customers demand best-in-class experiences, which means tailoring your product to their needs can be a key competitive differentiator. The best way to accomplish this is by embracing open systems and APIs, which empower customers to create custom experiences.

With 66% of customers expecting businesses to understand their unique needs and nearly 50% reporting that they will renew or upgrade if offered requested integrations, this is no longer a nice-to-have, but rather a fundamental business advantage. If your data can't be used to support your customers' needs, they will look elsewhere.

On the other hand, increased employee engagement and collaboration is one of the top benefits that organizations experience when leveraging APIs and open systems. Open systems and APIs enable managers and people leaders to focus on creating valuable moments and experiences for employees instead of managing people data logistics. For example, critical moments along the employee journey, like onboarding, become much more seamless when data is open, connected and integrated. On day one, employees can start understanding your organization instead of ensuring that their birthday is synced across all business applications.

Ignite innovation

For software consumers and producers, innovation is the bedrock of thriving companies. But it's even more important when uncertainty becomes the new operating rhythm. Customers know this; in the wake of Covid-19, the vast majority of customers expect companies to accelerate their initiatives.

Open systems are critical to innovation because they enable endless opportunities to build on top of existing technology. As the market fluctuates and the scramble to keep up with customer needs accelerates, the ability to innovate quickly is how resilient businesses will differentiate. Further, APIs help bind your business applications together so that your people can spend more time on their work output and less time making sure their data seamlessly integrates into another business application.

Data powers everything we do — from how we think about business operations to people strategy to product development. We can mine the most value out of our data when we open the flow of information to support rich business integrations. The future of work must be anchored in how we enable businesses to use their data and how to make it accessible across the organization. Core to the ability to scale, open systems will separate you from the competition because you'll be better suited to weather change across your entire organization.

Ian White

Entrepreneur Leadership Network® Contributor

Founder, CEO, and CTO at ChartHop.

Ian White is the CEO, CTO and founder of ChartHop, a People Operations Platform. Previously, he founded Sailthru and lead engineering at Business Insider. Ian built ChartHop to connect and visualize people data to empower organizations through insights, alignment, and action.

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