Time-Tested Insights on Creating Competitive API Programs

This post is authored by Datagrate. Datagrate helps their clients launch, manage and scale Talend’s best application integration solutions solving the most complex communication challenges.

When the Application Program Interface (API) first came into existence, developers viewed it as a revolutionary approach to creating re-usable software fragments. Instead of creating new code from scratch for every new program, they could now use existing functionality to develop new features. Not only did this decrease the amount of time needed to deploy a program but also meant they could leverage existing code which was already tried and tested.

Though the original concepts applied in software engineering do not have much in common with modern APIs, the fundamental idea has not changed much. Basically, developers use an existing code base to develop new programs. Advancements in technology have created countless practical use cases and opportunities for seasoned developers to set up competitive API frameworks.

Figure 1 Public API Growth – Source: programmableweb.com

The Role of the Internet in Shaping Current Trends

One major step forward came with the introduction of the World Wide Web in the late 1990’s. In addition to reusing APIs, software engineers were able to execute software remotely from any part of the world and get feedback in real-time.

<<Download the Field Guide to Web APIs>>

As the WWW has continued to mature, so was the use of these resourceful tools. Since the start of the 21st century, more people have access to the internet. Moreover, the web has created a whole new market both for new and existing business entities. By virtue of these changes, people, devices and business systems today need a standard for seamless communication. To address these and other needs, developers have created various API frameworks based on varying application scenarios.

Application Strategies for APIs

1.     Creating an API to Solve Business Challenges

APIs are the connecting points that facilitate interaction between people, their devices and the digital systems they use. They are comparable to a waiter in a restaurant who connects the cook (software) to the diner (user), getting the order and communicating it so as to get food and deliver it.

Within an organization, one might want to get data from a given database and display it on a different application. An API endpoint will communicate with the database to draw out the required statistics and communicate it to the user. To illustrate this, consider how travel sites work. They gather information from the traveler about budgetary and cabin preferences as well as travel dates among other details. They connect to airline APIs which dip into airline databases and offer options for the trip.

2.     Creating an API as a Business Case

On the other hand, an API can in itself become a full business for your company. For instance, Twilio has built a “Communication API” allowing business persons to chat using WhatsApp, SMS or other means. They sell their API to interested parties as a business case for enabling communication.

Opportunities for API Implementation

With the above points in mind, take a look at the following enterprise strategies for APIs:

·      As an Information Platform – Companies with different data buckets, databases or multiple cloud-based applications often need solid APIs. These enable them to collect data from different sources and display them from a consolidated endpoint. As such, the user will get a more holistic perspective of their business.

·      As a Product – This option requires the most experience as it involves creating a unique product to fill a market gap. In this case, the design and purpose of the API is the core determining factor of the success or failure of the business. Its key advantage is having a competitive advantage as the product will be new to the market.

·      As a Service – Modern enterprises usually have IT departments that include multiple systems and applications, each of which handles a specific role. Using an API to bundle the applications, each having a subset of features, is a great way to create a single all-inclusive service. Such services are reusable internally for the implementation of additional business needs.

API Integration in Practical Scenarios

In order to get inspiration for possible business applications of APIs, take a look at some of the ways the technology can be used in various business processes and sectors:

a)    eCommerce

eCommerce was among the earliest beneficiaries of API integration and for good reason. The business sector involves lots of moving transactions which require high speed. Third party APIs are, therefore, a necessity and come in all conceivable forms. Credit card processing is one of the most common of these but there is potential for numerous other innovations.

For instance, business entities can use exposed APIs to:

·      offer information about stock movement to partners

·      help in automatic transaction processing

·      allow access to customer portals

b)    Obtaining Customer Insights

For most business models, there are different departments, each of which has its own data pool. Notably, all such information is a valuable resource for understanding the customer. While CRM and ERP systems usually have more than a single database, this might be limited to financial or transactional aspects.

Using an API offers the opportunity to pull and combine all business data, presenting a comprehensive, real-time picture of the client. This combination of data and easy-to-digest presentation can give an entrepreneur a peek into different client personas. Armed with this information, they can tailor the approach to optimize customer experience.

c)     IoT

Advances in technology have made it possible to computerize almost everything around us. Applying the API concept in this area facilitates real-time interaction between such devices and relevant parties. IoT devices connect such “things” as automobiles, thermostats, medical devices and others within ecosystems. APIs come in handy by exposing the items as interfaces allowing access to them using apps. By virtue of this, users get control and can access the devices at any time and request for live data.

d)    Data Governance

More and more organizations are looking for ways to share data across their enterprises. In cases where such organizations have a multi-shop model, the data being shared may vary from one environment to the next. For example, a business which offers both B2B and B2C solutions might have to offer the different customers different pricing information and other data.

An API can help in such situations if it is implemented as a layer on top of existing data management frameworks. It will act as a control center ensuring that the correct data flows to the correct customer.

e)     Real-Time Supplier Communication

For cloud application users, APIs are more of a necessity than an option. Some providers require the installation of a third party endpoint to allow access to data. These applications have the objective of offering live updates. The use of a reliable endpoint in this case is a key to ensuring real-time communication with suppliers. It could also mean getting updates faster than competitors and thus offer you an edge.

Figure 2 API Usage by Sector – Source: programmableweb.com

From Theory to Practice

Considering the above opportunities and practical use cases for APIs, creating a valuable application that solves a real market need seems achievable. One of the most important factors that determine the success (or lack thereof) has to do with identifying a business case for your potential API. A viable concept does not necessarily have to make headlines but needs to fulfill a specific need in an organization. The need should be the driver of the project.

Business changes such as acquisitions and mergers are a good example of situations that create a need. Changes of this sort create significant needs for new systems, data streams or applications.

To start with, a developer can create lightweight endpoints offering access to data or other functionality. With time, they can promote this to business partners, clients or other organizational departments.

In order to sell an API as a product or service, it is important to meet client expectations and deliver value for the investment. Some of the basic features that will make this possible are creating one that is easy to use, well-documented, reliable as an endpoint and future-proof.

Keep in mind though that many business operators consider reusability as a major strength of a good API. As such, creating a flexible, generic API opens up a wide door of opportunity as it offers increased an output for the end user. While still on the matter of flexibility, remember that modern APIs have remote capability, and can thus be used from any part of the world and on any device.

Possible Challenges in API Development

Whether you are setting up your very first custom API within your organization or creating an API ecosystem, there are 2 major challenges likely to stand in your way:

·      Business acceptance – The target users need to understand the benefits they are likely to gain from the API. Since APIs are intangible, this can be a serious challenge. They usually operate silently in the background as part of middleware. A good selling strategy to make the benefits obvious involves highlighting the flexibility, reusability and generic design that your model offers. To enhance user acceptance, ensure that it offers the desired set of features and is not too complex or error-prone.

·      Technical maturity – Business operators will often notice the benefits of the model when it becomes unavailable. Much as this might seem like a desirable effect, operational reliability takes higher priority. Solid architecture and a reasonable level of experience will reduce the chances or frequency of system downtime. Ensure that it meets high-quality standards before taking it to the market.

Staying Ahead of the Competition

In recent times, there has been an increase in service providers looking to address business needs using various API designs. Companies no longer have to endure a one-size-fits-all approach, but rather, they use a best-of-breed approach. This means seeking out the best available software to meet their individual business challenges. For developers, software vendors and service partners, it underscores the need to ensure that applications offer flexible, comprehensive solutions which facilitate optimal integration.

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