Top Strategies To Improve Business Operations Through APIs

In our dynamic world of constantly evolving customer experiences, APIs are the thread that stitches together applications and features and enables them to accomplish myriad business demands. Such rising expectations have seeped through both B2B and B2C markets. There is hardly an industry left untouched by APIs. 

So, companies, across a wide spectrum of industries, are on a constant lookout for better ways to manage their APIs. More so, because critical business tools require a strategic implementation to maximize their utilization and yield the desired outcomes. 

With a thoughtful strategy in place, which goes beyond technical implications, organizations can capitalize on several core benefits of APIs. In this blog, we discuss the benefits that APIs bring to the table, the challenges in implementing API programs, and the strategies that you can leverage APIs for your organization. 

What API-driven means for your business

Before we delve into the detailed API strategy that can drive business value, let’s quickly take a look at what an API-led approach means for businesses:  

• Faster development, integration, and innovation 
  Businesses constantly look for ways to streamline their processes to boost productivity, be more agile, and accelerate development. APIs are the key accelerators that you need to kill two birds (in this case three) with one stone. Well-managed APIs, with proper documentation and support, are easily reusable and consumable; thus accelerating development and integration. This also extends to facilitating innovation as building something new by reusing APIs is easier and a developer need not spend time and effort to write code from scratch.
• Better developer and user experiences
  Well-managed APIs reduce the effort required by developers. but the buck does not stop here. APIs can also be metered to gauge usability and drive insights. This not only helps to improvise quickly but also prudently. It also enables you to create an outstanding user experience. 
• Easier Security Management
  When you create an interconnected web of services for your users, the amount of data and its exposure needs to be handled with utmost care. Thus, API program managers have a lot at stake.
  However, API security is not an additional burden; implementing it is rather easy with an API management platform. It serves as a singular point for applying security measures. As robust as the security protocol may be, it still allows individuals and teams to work autonomously.   
• Future-proof business 
  It wouldn’t be wrong to say that agility, security, and scalability are the three pillars of future-proofing your business; APIs fetch all three. Therefore, integrating any new technology becomes easier and has a shorter turnaround time. 
  Moreover, making these APIs available on a self-service developer platform encourages collaboration with external parties for innovation. As these APIs get exposed to multiple users, these can be packaged in newer use cases that are beyond the core capabilities of the provider. Thus aiding entry into newer markets. 

See how we built a fintech sandbox to create an open banking ecosystem for Yes Bank

Challenges faced in developing and implementing API programs

While the destination seems rich and rewarding, the journey does have certain pitfalls. Let’s take a look at them:

• The burden of legacy!

Generally, most organizations simply resort to quick fixes to continue functioning on their legacy systems. Sadly, this results in a mind-boggling cocktail that is too difficult to swallow. These contribute to making the legacy systems only more cumbersome. These become more rigid in embracing fast-paced technology changes. In such cases, businesses usually resort to point-to-point integration. Although successful, this comes with the additional burden of high maintenance costs and fragile dependencies. 

• Workmen need their tools

Beyond integration challenges, organizations face issues with testing, management, and monitoring the APIs. This mainly attributes to the lack of access to tools that can aid effective process maintenance. Also, the inability to expose their APIs via sandboxing to external developers. 

With an active community of developers, it becomes way easier to test, track and gauge the effectiveness of the APIs. However, another aspect of fostering such a vibrant community is proper management and exposure of the APIs on a platform that supports documentation, API description, and so on. 

Strategies to Improve Business Operations through APIs

• Identify Your Business Use Case 

You should begin with recognizing where APIs can best be applied to generate maximum value. Post which, you need to estimate the impact that can be in terms of productivity, customer experience, or revenue. One such way of identifying API opportunities is to analyze customer journeys. By utilizing the combined expertise of your business and technical teams, you can chalk out the pain points and the bottlenecks experienced by customers, which can be resolved via APIs.  

With this in place, your developers can now identify the number of APIs required to drive value. Prioritizing the API development and planning a roadmap enables optimal utilization of resources and results in near-term, measurable gains. You can prioritize based on factors such as implementation complexity, privacy, security, strategic importance, and so on. 

• Build the API team You need

Just as an API injects agility in your systems, the teams responsible for building APIs also need to dedicatedly employ an agile operating model. This is a major shift from the tunnel-vision purview that building APIs is a one-off project. Rather, it requires the idea that these are individual products that will improve and evolve over time with constant feedback. 

To achieve this, there are two basic prerequisites:
a) a team with the right skillset
b) the organizational structure that supports this business need.

Typically an API team should have a product owner - who ensures they are building high-value APIs; an architect - who identifies, implements, and monitors the technical standards, best practices, and vision; and scrum masters - who ensure the team utilizes the truly agile model for faster turnaround time. 

In terms of an organization’s structure, there are three approaches:
a) centralized - a central API unit working in tandem with the local team,
b) decentralized - dedicated local API development units, and
c) hybrid - a centralized API unit building foundational APIs. 

• Close the loop with 3M approach - Monitor-Measure-Modify to scale

Let us now take a look at how to measure the impact, after you have viable APIs in place. As mentioned earlier, APIs should be treated as a product. Likewise, they require a concrete adoption campaign and also dedicated performance management to succeed as a product.

So, to drive API adoption, businesses should look for adopters who are willing to invest time to support innovation. Teams would then work together to build the prototype that can derive the intended outcomes. 

As for measuring the performance of APIs, the following factors can be taken into account: Request Per Minute (RPM) - tracking the volume of calls made to an API to gauge usage, Latency - tracking different versions of the APIs to improve responsiveness, Error Rate and Types of Errors, code compliance, and so on. 

• Active Monetization Methodology 

With a fully functional API program in place, monetization is the next step you should be looking at. Now that you have a system to monitor and measure, ideating and implementing revenue models become easier and quicker. 

Let’s take the classic example of Google and Uber. Google opened its Google Maps API and Uber utilizes the same APIs to fuel its business model. Another successful example is Paypal. 

However, you do not have to exactly follow what tech giants practice. Your monetization arrangements can vary to pursue different partners. Businesses can typically explore options like ‘pay for use’ - users pay as per volume of usage, ‘revenue-sharing model’ - partners are paid in accordance to the value they generate for the provider, and ‘freemium’ - free usage for some basic features that promote your brand or product, additional features are chargeable.

Preparing a Future with APIs 

APIs are meant to stay, grow, and become key enablers in the application architecture of the future. So, it is only prudent to identify the scope of APIs for your business and start with a sound strategy right away. 

In doing so, you need a technology partner who can assess your technology readiness, map your business requirements to technology needs, and build a blueprint for accomplishing it. 

Our experts can help you in accomplishing a successful API journey. We analyze your existing platform, suggest optimal revenue generation, and work on implementation. Get in touch with us today to be API ready!