Low Code Data Integration:Best Practices in Cost Control and Reduction

Report

How companies can meet digital transformation goals without cutting into the bottom line

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Nowadays, data integration is pervasive. It’s about being able to integrate everything—IoT, telematics, external partners, internal business units, legacy systems, digital twins or other sensor data. At the same time, during uncertain times, the focus on hard business metrics such as improving operational efficiency or cost optimization is more important than ever.

Many tasks in innovative software development still involve manual, yet very complex operations, such as integrating data from a variety of different endpoints or the maintenance of APIs. So, low code data integration platforms can have a tremendous effect on your operation and development costs.

Through removing the need for deeper programming or integration skills, processes get significantly simplified. Building new integration pipelines is nearly automatic, requiring little or no input from developers. A broader range of non-technical employees are enabled to work on integration tasks and ultimately they become Citizen Integrators. At the same time, highly qualified specialists can concentrate on projects that are of the highest value to the company and amplify your potential to innovate. This also makes tedious coordination between product teams and developers a thing of the past.

Xapix allows us to provide our business with fast access to data, while freeing up our engineering and product teams to focus on building innovative solutions instead of infrastructure.

— Director Integration Services at Automotive OEM

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Introduction

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Content

On the following pages we take a closer look at the economic impact of Xapix. As we will show, the overall cost benefit after an implementation of the platform is more than $6.6M over 3 years.

For this study, we developed a composite organization based on data gathered from interviews with current and previous customers.

revenues $2.5 billion

geography US headquarters, US & European operations

employees 18,000

industry Automotive and Transportation

Introduction 2

Building vs. Buying an Integration Platform 4

API Reusability 6

API Maintenance 7

API as Enabler 8

Unquantified Benefits 11

Financial Conclusion 12

About Xapix 13

The numbers that follow are based on our experience from those projects, the integration and build up of API platforms as well as industry research. The composite organization in this study has these characteristics:

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Building vs. Buying an Integration Platform— The Everlasting Quandary

The first instinct when a product team encounters larger data integration roadblocks is to try to solve them on their own. In a lot of cases, the effort involved in this is heavily underestimated.

Of course, it depends on the volume and complexity of the project. While building a handful of integrations is relatively simple, most of our customers’ connected solutions in IoT, automotive or logistics & supply chain require tens or hundreds of connections to external data sources. The complexity increases exponentially and the more solutions and services they are offering, the harder it is to build and maintain that infrastructure.

A manual integration process requires a wide range of skills. These include documenting the requirements, outlining the integration process, and creating data models to describe the

information that will be extracted and that is needed for the specific use cases. Then the API needs to be formulated against the architecture of the data warehouse and you have to manually code the data pipelines that transport data from the source to the data warehouse. Ultimately, testing and maintenance is also a vital part of the integration.

I have experienced on my own how tedious it can be to maintain the „fast built“ ETL flows over the years.

— Senior Integration Manager at Automotive OEM

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Depending on the project, there are many different variables that further contribute to the complexity and duration of solving the roadblock. For example, the expertise of the employees, manual adaptation to tools, systems and use cases, or compliance with legislation and company standards, such as different schemas or data formats. This also poses a great risk in terms of security and governance of the whole data infrastructure—the more that people build integrations on their own, the less they are optimized and the higher is the threat of having a data breach or other security issues.

Naturally, in some cases there is no other option than to build a platform by yourself. This is the case, for example, when you only occasionally need to integrate data, when the platform needs to be highly customized, if there are special requirements, or if you are the only one that owns the expertise to handle a specific technology.

For the vast majority of projects though, platforms like Xapix are better suited as you can extend features incrementally. Our customers report that they profit from the modular offering that Xapix provides, as they are able to avoid large upfront expenditures and have the full flexibility to scale according to demands of their business.

Building vs. Buying Costs

Assuming the full yearly cost of a senior developer (since an integration of that scope would be beyond the capabilities of junior developers) of about $160,000 USD and the development time of 18 months multiplied by a team size of five, the total cost for the development of an own platform is around $1,200,000 USD.

BuildMinimum Integration PlatformUsing open source components and customization

BuildFull Orchestration PlatformIncludes all components and features that address your needs

Buy XapixFull Integration PlatformAdvanced Data Harmoni-zation, Orchestration and Compliance Features

Key platform development / integration

5 FTE 5 FTE 1 FTE

Start of full operations, including development and testing

6 months 18 months 2 months

Costs for development / testing / implementation

$ 400,000 $ 1,200,000 No upfront commitment, just monthly license fee

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A common approach in companies is to build APIs exclusively for individual products. The reason for that lies either in the limitations of the tools with which the APIs are created (as they often do not have the option to streamline and reuse the process) or the developers simply do not think far beyond their scope of work.

This approach might work for projects building simple applications. But what if you need to ship multiple API-driven applications for employees, partners and customers? Each application requires a backend, APIs, user management, compliance and security, and, of course, there is a deadline to meet.

This is where a low code integration platform like Xapix can support. Our customers can simply choose from a wide range of predefined API components or write their own API code that can then easily be applied for other use cases as well. This enables consistently high quality and common standards in data integration and saves a lot of time compared to manual integrations.

While an ad-hoc integration approach may yield short-term results, like getting the project out of

the door quickly, it’s often at the expense of the long-term strategy. If the integations you build are not reusable nor built for scale it can have negative impacts on your organization’s ability to create value over time. Especially as a part of a multi-year data integration strategy, uniform and automated processes are invaluable.

Our customers reported that they encounter positive effects on multiple levels. Internally, when the information used by a particular API can have multiple consuming applications. And externally, when they want to share information with third parties and are able to use a single API to link multiple partners. Furthermore, our customers reported that they are able to implement APIs at least 5 times faster than before.

API Reusability— Don’t Reinvent The Wheel

Everything that happens with our data in Xapix is very transparent and it makes it very easy to create new pipelines or new schemas on the fly.

— Product Owner at Logistic Service Provider

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Manual Xapix

Time for the integration of a partner interface20 days

New API4 days

Existing API0.5 days

Overall reduction of implementation time due to improvement and repetition (per year)

0% 25% – 97.5%

API Reusability Time

A major cost sink is the maintenance of APIs. Similar to the purchase of a new car, one is a bit surprised when the first repairs and maintenance are due and the mechanic hands out the bill. Typically, the maintenance of software constitutes more than 50% of all software development life cycle phase costs, and a large part of that goes into API Maintenance.

Our customers report that the following benefits with using Xapix help them to cut their expenses for maintenance:

Minimization of manual workThrough automation, developers are enabled to programmatically change any resources. Additionally, they can create workflows, which means that they only have to intervene minimally in the functionality of the API.

Faster troubleshooting through advanced analytics, debugging and loggingData connections are one of the most complex and error-prone components of any system. With external monitoring tools, our customers get more transparency in detecting and resolving issues. With the logging and debugging features of Xapix, they can literally play back every step of a malfunctioning data pipeline to identify where it needs to be fixed.

ReusabilityAs already explained in the chapter above, the reusability of APIs should be one of the most common practices to keep development and maintenance costs low.

API Maintenance— Reduce Your Time Invested in Routine Tasks

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Manually With Xapix

Number of FTE required to maintain each integration or API 0.125 0.025

API Maintenance

Low code data integrations can have a massive impact on the overall maintenance effort per integration. In projects that are managed with common integration tools, developers usually need to write a number of integrations. This gets especially complicated, when different teams are contributing to different components. With Xapix and its ability to reuse an API more effectively, the number of integrations in customer projects could

be reduced, which translates directly into time and cost savings.

In the interviews with our clients, they told us that on average one developer can maintain 40 running APIs using Xapix, compared to 8 APIs using traditional options. Maintenance tasks include monitoring, updating and fixing broken pipelines.

Since data integration is not your core business, why should you spend large amounts of time and resources on it? Xapix let’s you focus on data monetization and the creation of innovative, data-driven products and services that address pressing business priorities and customer needs.

According to a McKinsey report on the automotive industry, monetizing onboard services could

generate as much as USD1.5 trillion in additional revenue potential by 2030, which will more than offset any decline in car sales. This data on how a driver and vehicle interact can also give automotive manufacturers, logistics companies, fleet managers, and insurance companies valuable information on how to make transportation safer,

API as Enabler— Revenue Channels From New Data Streams

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The numbers above project a starting revenue of $5,000 per month per API once the platform is installed. We assumed that this increases 50% YoY and that the APIs are built concurrently.

Year 1 Year 2 Year 3 3 Year Total

Revenue channels from new data streams due to faster integration

$ 375,000 $ 750,000 $ 1,225,000 $ 2,350,000

Revenue From New Data Streams

more efficient, and more enjoyable—but they must be able to handle the new huge streams of data and analyze them to extract insights.

Additionally, this raises questions about what constitutes an appropriate and reasonable exchange of value in an increasingly data-led industry. Companies must be able to pinpoint revenue opportunities, have a clear value proposition, and need to balance innovation with compliance. Those who can harness the potential

of their data, whether it‘s from telematics, internal business units or legacy systems, have a decisive advantage over the competition.

In the interviews, our clients told us that with Xapix, their only limitation is how fast their sales team can find partners to consume their data. As a result, their conservative revenue projections are as follows.

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The following table from a PwC study shows different visions around new business models that companies can follow, as long as they do the work necessary to get a functioning data ecosystem in place.

Way-to-play Description

Aggregator of Data and Audiences Collect and provide insights from data (maps, location) to 3rd partiesMarketplace for other digital products

Digital Service Provider Deliver digital services that “live” on top of a physical product and create >80% of value (functionality clusters)

Digital Augmented Product Provider Simplify the use of the product through digital services (predictive maintenance, fleet management)

Digital Enabler Provide enabling digital infrastructure and platforms based on standards to others

Discovering Your Potential

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In addition to the above quantified benefits that have a direct effect on a company’s revenues and costs, there are also advantages that are difficult or impossible to quantify. In the interviews with our customers, we often heard that they now have more capabilities to improve their organization’s data security and privacy.

Data security and privacy concerns, and the need to comply with ever more stringent data regulations, will keep increasing over the next several years. Data has often become the most valuable asset of a company, but it historically has always been difficult to measure and demonstrate the value of data governance and compliance. In the examples below, we can see the business costs associated with a lack of data governance. Over time, they can lead to even greater costs in missed opportunities for the company.

• Time and cost of remediating data inaccuracies• Lack of situational awareness in complex and dynamic areas, such as in IoT, fleet management and connected cars• Poor application interactions due to inaccurate data and missing standards• Inability to perform accurate risk assessments• Increased need for report reconciliation

Unquantified Benefits— Essentials for Successful Innovation

In Xapix, this is addressed with a comprehensible and transparent user and access management module. In addition to that, the data gets protected through data transformation and data masking features like pseudonymization and anonymization.

We find that it’s important to detect and surface data security and compliance issues within the integrations, making them more transparent and easier to visualize.

— Senior Integration Manager at Automotive OEM

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With data compliance, there are also large monetary and reputational factors that need to be taken into account. Since the implementation of GDPR, companies can be punished with up to 4% of the annual global turnover or $20M (whichever is higher) for the loss or incorrect handling of data. With more non-experts working on data integration projects, low code data integration platforms need even higher data security and compliance standards.

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The pricing of a Xapix licence is based on the number of calls that the platform carries out. In our example we have assumed that the company purchases the Xapix enterprise licence and

delegates one FTE from the developer team for the maintenance, half of this time working directly on the platform.

Financial Conclusion

Year 1 Year 2 Year 3 3 Year Total

Cost saving by reducing time to develop core platform

$ 800,000 $ 400,000 $ 0 $ 1,200,000

Cost saving by reducing time to develop APIs and integrations

$ 245,000 $ 184,000 $ 138,000 $ 567,000

Cost saving from reduced maintenance $ 440,000 $ 880,000 $ 1,320,000 $ 2,640,000

Revenue channels from new data streams due to faster integration

$ 375,000 $ 750,000 $ 1,225,000 $ 2,350,000

Total benefits $ 1,860,000 $ 2,214,000 $ 2,683,000 $ 6,757,000

Another point that we underestimated at first, is the satisfaction of the high skilled product owners and developers that our customers employ. Our customers reported that hiring and motivating talent that works on the front of digital innovation is difficult and any diversion from their

professional tasks, such as software engineering, data science or other analytic research, is considered to be a disturbance. By enabling them to focus on their main tasks, they could see an increase in overall employee satisfaction.

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Xapix is a fast, flexible, and user-friendly data integration platform designed to meet the highest demands of automotive, logistics and IoT industries. With our platform, you solve challenges at the intersection of connecting endpoints, harmonizing data, and sharing it with other stakeholders.

The development of Xapix began in 2016. Since then, it has been further developed and continuously aligned to the data integration requirements of large companies, with features such as data standardization and harmonization, low code capabilities and event streaming. The platform is already used successfully by several automotive and logistic companies in the US and in Germany.

About Xapix

Enabling everyone to integrate data

Xapix is the fastest & easiest low-code data integration platform used by businesses to connect data at scale

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