Over the last decade, there has been a relentless march towards digitization. Once the preserve of only the most advanced and biggest companies, cloud technology is rapidly becoming the mainstay of business. All companies, large or small, can now afford to invest in the latest technology that allows for automated processes, faster connections, and more efficient operations.
One of the drivers of the trend towards digitization is the API economy and its ecosystems, which have come to shape the world of business. A recent survey found that 85% of companies consider APIs and API integrations to be fundamental to their strategy and continued success.
What Is the API Economy
The term “API economy” essentially describes the exchange of valuable information and data through APIs. In more complex terms, it refers to companies’ dependency on APIs to do business and when it moves beyond a simple ecosystem.
For instance, a food delivery app needs to be able to combine different elements to make its platform functional. As well as purchasing software, it needs to utilize mapping technology to enable consumers to select nearby restaurants and enter delivery points. Being able to bring together different menus into one platform requires another piece of software.
The quickest and most efficient way of combining each of these elements into one platform is through APIs, which can feed and format the data so that the platform can function. These processes can also be seen in ride-hailing apps, digitized supply chains, and ecommerce stores.
To a lesser extent, any company with elements of digitization is likely to rely on APIs to function efficiently. With cloud technology and software becoming preeminent in businesses of all types and sizes, the 21st-century economy is increasingly reliant on APIs.
Developing an API Strategy
The scale of the API economy can be seen in the sheer volume of API requests - which represents each time data is retrieved or sent through APIs. In 2019, on one leading development platform, 4.7 billion API requests were made, equating to 400 million a month or 150 a second.
Given that this is just from one API development platform, these numbers are just scratching the surface of the integral role APIs play in the economy. They are engines of the data-driven digital era.
It is essential for companies to get their API strategy right and fully harness data’s power. There are some key steps businesses can take when it comes to developing a winning strategy:
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Clear, Up-to-Date Documentation
The first step is to ensure the documentation of processes and programs is complete and up-to-date. For users, this is essential in making full use of APIs and maximizing their potential. A vital part of a successful API strategy is its usability.
If a program can only be used by highly-trained technicians, its usability and potential impact on a company’s operations are limited. Therefore, as well as making APIs easy to use, businesses should document the process accurately and update where appropriate. Breaking this information into digestible chunks and making it easily accessible will enable a wide range of users to fully utilize APIs, from clients to CEOs.
The content needs to be carefully crafted and tested before final publication to ensure a high level of understanding across all users. One way of doing this is to cite real-world, relatable examples of how APIs can be used.
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Performance Analysis
A critical component of a successful API strategy is the ability to track and monitor performance. As with any technology, it can be tempting to deploy as many API-supported processes as possible. However, such an approach, without analysis, will likely lead to confusion and ineffective performance levels.
By identifying and focusing on key performance metrics, such as process completion time, accuracy, and time to revenue, companies will be able to work out where APIs can make a difference quickly. Other metrics can include the level of engagement, return on investment (ROI), and the number of API requests within the organization.
The idea is to get a complete picture of API performance in relation to the company and how it impacts its overall performance. With an advanced API management platform, businesses can monitor performance and respond to any issues in real-time.
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Internalize Development
Most companies develop or use APIs for internal purposes. Even if a business would eventually open up the API for external use, the “internal first” approach can prove a perfect testing ground. As APIs go through the development process, they can be fine-tuned as they go through the process with internal teams.
Once fine-tuned, APIs can then be opened up to partners and other external users, bringing benefits such as smooth transitions between different platforms and sharing of data. In addition, internalized APIs can be built to be more secure in terms of access and data security.
The stage-by-stage approach to opening up APIs can be seen in Amazon, which has turned its internal APIs into a multi-billion dollar platform in its own right. The successful rollout of APIs within the company has led to a new revenue stream for the business due to the fact APIs can be applied to a multitude of processes if set up the right way.
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Utilize an API Integration Platform
An advanced API integration platform serves as a final piece of the jigsaw that completes the strategy. With the right solution, like Universal Adapter, companies will be able to bring together the elements of API management into one central dashboard.
In doing so, teams can track performance, monitor how the APIs are being used, and quickly create new APIs for specific purposes. The platform provides the infrastructure for companies to devise and implement a winning strategy.
With small to medium-sized businesses now using around 99 APIs, it’s critical for companies to ensure they control these programs. An integration platform can support businesses grasp the technology, utilize the data, and maximize the impact of APIs.
The API Economy is Here
There’s little doubt we are entering an exciting period where companies prioritize data management, and APIs are an essential part of the solution. The next decade will favor businesses that strategize for the API economy by embracing integration and ensuring data is used efficiently. In doing so, teams will identify and resolve issues quickly, be more responsive to customers, and find new revenue sources.
This is the appeal of the API economy. It allows companies of all sizes to pursue growth in areas out of reach just a few years ago. APIs can be used to streamline processes, bring old, legacy software back into use, and open up new opportunities - such as offering services using cloud-technology or use old databases to sell new products.
Strategizing for the API economy is a strategy for growth.
