Application Programming Interfaces or APIs have been powering our lives for many years now. API is not some random technology that has come knocking at our doors. We may not understand the role it plays but it keeps things going for us in more ways than one. It plays a behind-the-scenes role, like an accomplished director of a magnum opus. Well, if we have piqued your interest allow us to cite a few examples to iterate the omnipresence of APIs.
From Facebook to PayPal, entertainment to travel, APIs exist in every digital domain out there doing their bit every single day. When you need a travel booking, you get to scour through myriad destinations and flights with the help of third-party APIs. Facebook Messenger, created as a bot platform, allows you to transfer money to your friends thanks to its association with multiple financial majors like Visa, MasterCard, American Express, Braintree, and PayPal.
Banking chatbots have become quite the thing these days since they allow better conversations in languages customers are most comfortable with. In fact, the global chatbot market is currently witnessing a surge with a 28.7% CAGR for the forecast period 2020-2027 and is predicted to touch $19,570 million by 2027.
Stripe recently came up with Payment Links - that allows businesses to create a custom checkout page directly from the Stripe Dashboard eliminating the need for coding skills, an app, or a website. Enabled by API, it will support payments in 185+ countries allowing businesses to offer pay-by-link features to their customers. Clearly, we are living in an API-driven world and yet we know so little about them.
According to Harvard Business Review, APIs give Salesforce.com 50% of its revenue while Expedia.com generates 90%. Almost 40% of large enterprises are already using more than 250 APIs while 71% of developers are keen on using more APIs in 2021 as compared to last year. It is time you understood their power and know why your digital transformation journey can never really be complete without APIs.
So, let’s delve deeper to know what they are all about.
APIs - the absolute essentials
The global API market is expected to go from $ 1.2 billion in 2018 to $5.1 billion by 2023 at a CAGR of a whopping 32.9%. While API-led connectivity is a major contributor, its growth is not surprising at all considering every organization in the world is now eager to go digital. What's interesting to note is that it is the BFSI sector that is expected to have the largest market size during this period as the focus is now on building lean and flexible business models.
Keeping up with changing times, HSBC recently rolled out an API developer portal to enable firms and customers to find appropriate APIs for their unique business requirements. Explains Nadya Hijazi, head of digital, global liquidity, and cash management at HSBC, "APIs are the future of corporate-to-bank connectivity, and the launch of our Developer Portal is the natural next step. By opening our API suite to customers and developers, we’re enabling them to rapidly integrate our solutions into their own products. Embedding our insights into customers’ own businesses will make them more resilient, and less dependent on the limitations of their own technology.”
IT decision-makers unanimously agree on APIs being the essential ingredients for the success of the digital transformation. APIs are responsible for the way software converse with each other. They drive customer experiences across sectors and accelerate innovation to enable better experiences and smarter environments. The fact that digital transformation is all about combining disparate data and functionality, it is impossible to imagine even attempting it without APIs. What's ironic is that despite its humongous role in enabling technologies and transformations in an ever-evolving tech landscape, enterprises are sometimes reluctant to adopt an API-first approach. This mindset needs to change, or we will forever be struggling to find our feet on the road to digital transformation.
Businesses today are reeling under the pressure of changing customer demands where everything from food to fashion is now ordered digitally. Digital-first businesses are no longer a fad but a necessity as we embrace new ways of conducting business through modern technology marvels such as QR codes, virtual trial rooms, and digital money transfers. The only way to offer such services is through APIs.
The API value proposition
APIs should not be a concern of IT professionals only but should be a conscious choice of business leaders too. APIs ensure that your data is scalable, usable, and easily applicable across use cases. It gives enterprises the flexibility to monetize their digital assets and collaborate with third parties. While some sectors understand this well, there are others that are still working on their API resolutions. The smarter way to approach API adoption is to evaluate existing business needs and challenges, and then see how APIs fit into the mix like the missing piece of a jigsaw puzzle.
When evaluating the value and role of APIs, here's what you need to know:
- Sales optimization - APIs will help you get to the market faster by empowering you with automated processes and partner onboarding capabilities. They enable consistent access to data across the organization to help make smart and quick business decisions. Also, they help you optimize your sales channels allowing you to partner with new vendors to leverage shared data for new customer acquisition and higher transaction volumes.
- Cost savings - APIs are reusable and businesses can leverage them to reduce operational costs. APIs help developers get the resources they need through third-party providers without having to reinvent the wheel for building an application. This helps them save development effort and cost to a great extent while refining the capabilities of their apps.
- Better reach - APIs can help you build credibility and mitigate risks that come from market disruptors by delivering connected digital experiences to your customers. They break silos and facilitate collaboration among organizations to work towards attaining the goals they set out to achieve rather than merely focusing on profitability.
- Faster time to market - Enhanced efficiency helps businesses launch applications faster and forge partnerships to move with agility in a highly competitive market. Nationwide Insurance, for instance, reduced onboarding time for B2B partners from months to just days with an API-first business strategy. The ability to create new connections with partners also means an opportunity to expand your network and broaden your horizons. Accelerated time to market and the ability to pivot to new verticals definitely make API and API integrations an organization must-have.
- Greater adaptability - Enterprises can simply update their legacy systems with APIs allowing employees to update their skills. They can use the reusable, modular structure of APIs to adjust to radical shifts in customer demand patterns.
Power up your digital transformation journey with APIs
According to research by Google Cloud, about 75% of the organizations are continuing their digital transformation journey despite the pandemic while 65% of them are accelerating their investments to become digital-first organizations. API along with API analytics, API integrations, and the many benefits that bring along will make digital transformation a lot easier and open new avenues for innovation and growth.
Although APIs are a crucial part of your technology portfolio, it is important that you work on creating a strong API strategy to manage them well and reap extraordinary benefits. APIs ensure that the information you need is readily accessible and thus plays a pivotal role in helping enterprises build new capabilities. They are the lynchpin that holds different parts of a value chain together despite the fact that they may belong to different systems, environments, or vendors. They facilitate seamless communication between internal and external consumers.
Instead of replacing legacy systems, enterprises can use APIs to modernize them and build capabilities in a secure manner. Luckily, building an API strategy is not difficult at all. You need to figure out a strategy that aligns with your business goals, measures performance and engages well with your ecosystem. You need to ensure that you choose the right technology and supporting architectures to make sure that you get the most out of your API deployment.
Your strategy should essentially reflect the business objectives and drivers you have in mind. The end result should be such that systems are able to communicate with each other without manual intervention through API endpoints thereby freeing up a huge amount of your time.
Relevant, detailed, up-to-date documentation is critical for the success of your API strategy. Without it, your customers will never be able to leverage your APIs effectively. Make sure that you add real-world use cases too rather than giving them just the technical information.
Don't forget to use API metrics to track the success of your API strategy. You can evaluate the API performance on the basis of revenue metrics such as direct and indirect revenue, ROI, and customer lifetime value or CLTV per developer. Other metrics include the operational ones such as uptime and error, and developer metrics such as community engagement and churn.
While it is important to get your business APIs right with a proficient technology team at the helm, you must ensure that they are marketed well so that everyone uses them. Make sure everyone is in sync and ready to embrace an API-first approach within the organization.
Analyze your business environment well to ensure that you strengthen all the touchpoints to offer core functionalities for better experiences. APIs can be empowering for your digital transformation. Just make sure that you put in a substantial amount of time and effort in planning your API strategy well.
Lead with TransformHub:
TransformHub is an award-winning Global Digital Solutions company providing a full suite of digital transformation & product engineering services to enterprises, product companies & new-age startups. We have our presence in Singapore, US, Middle East, and India.
Our mission is to become a preferred partner to enterprises for growth and innovation in the digital age. TransformHub combines Strategy, Experience, and Technology at every stage of the engagement model to build human-centred digital platforms & channels.
Our expertise lies around the 6 building blocks for Digitization - Product Engineering, Mobility, Enterprise Integrations, Data & Analytics, Cloud & DevOps, Intelligent Automation. With a large and ever-growing team of digitally ready consultants, the company helps its clients to grow and stay ahead of their competition.
So, if you are looking to innovate, trust TransformHub to be your like-minded partner that can help you cut costs and digitally transform your business with our expertise. Our team does the thinking and focuses on getting the Return on Investment (ROI) and controls the total cost of ownership (TCO).
To know more about service & solutions - call us at +65 9198 4440 or write to us at firstname.lastname@example.org and request a free consultation with our team.
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