March 1, 2018
TABLE OF CONTENTS
This guide can be used by organizations’ strategic leaders to drive digital transformation. The guide provides API Management techniques via five business drivers and a sample business case.
The following business case demonstrates a simplistic view of the benefits of a new revenue stream that is quickly exceeding the cost of implementing an API solution. This cost/benefit analysis only takes one of the business drivers into consideration rather than all five for demonstration purposes. The main goal of the study is to quickly demonstrate the cost benefits of an API Management solution, but all variables should be considered by an organization when developing a full business case.
|Benefits||Year 1||Year 2||Year 3||Year 4||Calculation|
|New Revenue Stream||$150,000.00||$216,000.00||$294,000.00||$384,000.00||“=Number of APIs * Number of API Calls * Revenue per API Call * Months per Year”|
|API Management Solution Cost||$90,000.00||$129,600.00||$176,400.00||$230,400.00||“=Number of APIs * Number of API Calls * Cost per API Call * Months per Year”|
|Net Cash Flow||$10,000.00||$86,400.00||$117,600.00||$153,600.00||“=Revenue - Cost”|
|Total Net Cash Flow||$367,600.00|
|Metrics*||Year 1||Year 2||Year 3||Year 4||Calculation|
|Number of APIs||50||60||70||80|
|Number of API Calls per API per Month||5000||6000||7000||8000|
|Revenue per API Call||$0.05||$0.05||$0.05||$0.05|
|Cost per API Call||$0.03||$0.03||$0.03||$0.03|
|Months per Year||12||12||12||12|
*Metrics are based on common industry trends
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Keith LaForce is a Managing Director at Levvel responsible for managing processes and people to ensure quality work is delivered to Levvel’s clients. Keith has 15 years of engineering consulting experience that ranges from application development, enterprise architecture, devops, and leadership. Keith has worked in Fortune 10 insurance and financial services organizations setting the standards for architecture, delivery, and implementation processes. In previous roles, Keith specialized in providing digital transformation solutions for clients across a variety of industry verticals. Through Keith’s extensive consulting experience, he is influencing how Levvel delivers consistent engagement models across all our clients to ensure a great client experience.
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