The rapid proliferation of data across all industry sectors presents opportunities and difficulties alike. One of the inherent benefits of e-commerce is that every customer touchpoint leaves a trail of data. But although that data has enormous value, unlocking that value requires a full-featured business intelligence (BI) solution that integrates data from multiple sources and turns data into actionable insights – for finance leaders.
Finance leaders can quickly end up spending weeks or even months waiting for data from the IT department...
The sheer number of data sources presents the biggest challenge. Finance leaders can quickly end up spending weeks or even months waiting for data from the IT department to compile their reports. Whether they’re preparing for a monthly earnings call or simply looking to justify funding a new technology solution, they must have the necessary data to support their claims or decisions.
Application programming interfaces, or APIs, are vital to solving the problems above, and they’re a core component of any digital transformation. APIs are software intermediaries that allow two applications to communicate with one another. For example, the Stripe API makes it easy for e-commerce companies to integrate payments with their platforms and enables account and invoice management within the company’s existing ERP platform.
Without an API, finance leaders and other decision-makers need to compile reports and manage multiple platforms manually. Given, for example, the vast array of payment platforms that today’s e-commerce companies support, this can quickly become a severe burden. However, by facilitating the automatic transfer of data between systems, APIs allow finance leaders to use fewer tools and, in doing so, reduce complexity. Treasury functions were among the first to embrace APIs, since it streamlines the management of tasks like accounts payable, accounts receivable, and foreign exchange management.
Another priority for finance leaders is risk management. But to reduce the risks to your company’s financial data, you need visibility over it. After all, you can’t protect what you can’t see. APIs ensure you have access to and control over your data in real-time.
APIs are applicable across all major business areas, such as connecting your e-commerce platform to your ERP system. These seamless connections can transfer data such as orders, payment details, and partner information, to flow directly from the online experience to the financial component of your ERP platform. In other words, using APIs to integrate all data streams into your ERP provides instant visibility into your organization’s finances. Integrating data streams allows you to make critical decisions faster and reduce the order-to-cash cycle. Let’s also not forget that the pandemic highlighted the need for corporations to maintain instant cash balances to prepare for uncertain times.
APIs have traditionally been considered an exclusive concern of the IT department or the CIO. However, since the digital transformation of e-commerce encompasses all teams and their operations, including finance operations, CFOs should also include them in their integrated systems. When implemented correctly, APIs free up time and money for finance leaders to focus on more strategic initiatives.
Finance leaders must conduct proper due diligence when choosing a vendor to implement their API solutions. Any vendor you work with should have a proven track record in the area, including adherence to automated testing standards and, of course, information security and privacy. After all, poor APIs present a severe security risk, while good ones are very secure and greatly enhance operational efficiency.
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Originally published October 4, 2021
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