The total value of integration for an organization can be measured by direct and indirect value. As I explained in my last post, communicating both is important; direct value of integration – what we also call “platform benefits” – only tells part of a compelling story.
Platform benefits on their own leave out two key points of the full value of integration picture. First, the indirect effect of a given approach to integration, e.g. more revenue through higher project throughput; Second, alignment to organizational goals and KPIs. Both of these are crucial in helping business-oriented executives understand the full benefits of a given integration approach and ensuring integration project teams are aligned and motivated.
To address these two points, this blog explains the indirect value of integration.
The indirect value framework
Indirect value is, simply defined, the broader business outcomes an organization sees as a result of integration. Specific outcomes often include increased revenue, reduced cost, and/or mitigated risk. Integration is a key enabler of a business outcome, and showing how is key to clearly articulating the wider value of integration.
MuleSoft’s approach to this is a four-box framework that takes stakeholders on a journey, educating them on what needs to be built at a technical level and how this relates back to business value:
- Integration or API use case: The integrations and/or APIs to be built.
- Technology initiative: A defined technology program. MuleSoft typically sees 25 common initiatives, including “move to the cloud” and “single view of the customer.”
- Business objectives: Objectives set by business stakeholders. MuleSoft typically sees five general objectives: improving customer experience, improving employee experience, improving operational efficiency, introducing new products and services, and improving partner experience.
- Value: Finally, the value of the above three elements combined will typically be one of four things: increase revenue, reduce costs, improve capital utilization, or reduce organizational risk.
The value of this framework is that it provides clear linkages between technical integration use cases, wider technology initiatives, and business value. It educates a non-technical audience on where integration fits. It also aligns technology to value creation opportunities, and, as a result, has the potential to unlock business funding pools instead of those traditionally assigned to IT. To bring this structure to life, here’s an example from Big Bus Tours.
How Big Bus Tours calculated the indirect value of integration
Big Bus is the world’s largest owner-operator of hop-on-hop-off open-top sightseeing tours, with a global fleet of 400 buses in 19 cities, turning 5 million tourists into explorers every year. Prior to using MuleSoft, they faced an ongoing decline in traditional “on-street” sales using paper vouchers and market demand for online sales options. They had to dramatically transform their sales strategy using new sales channels (web and mobile app) and an extensive partner network. However, they were unable to do this with data that was locked in monolithic legacy systems along with the inefficient process of establishing point-to-point connections for every new partner added to their ecosystem. Using MuleSoft, they were able to overcome these challenges and begin transforming their business. Using a set of reusable APIs built with Anypoint Platform, they sped up this onboarding process.
An example of how one of Big Bus Tours’ APIs had a huge impact on their business outcomes can be seen in the tree below:
Platform benefits and business outcomes are both important in articulating the value of integration. They serve different, but equally necessary purposes. The next step in measuring the total value of integration is to connect direct and indirect value, which I will explain in my next post.
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