Are you looking forward to digitally transforming your business? Well, then you need to understand the crucial role APIs play.
APIs as McKinsey describes are the connective tissue between technologies and organizations. They allow businesses to monetize data, make smart decisions, and open new pathways for innovation and growth.
So, no matter if you are looking forward to market new products, analyze data, connect to customers, or aggregate functions to improve productivity – APIs can help and make digital transformation a lot easier.
It’s not just we who think APIs are crucial for digital transformation. Instead, 85% of businesses believe web APIs and API-based integration are critical for their success.
However, to make the best use of APIs for digital transformation, it’s crucial to build a powerful API strategy that perfectly aligns with your business objectives. This blog will guide you throughout the process.
Why you need an API Strategy?
Do you know Salesforce generates 50% of its revenue through APIs? So does Expedia (50%) and eBay (60%), according to Harvard Business Review.
It means APIs form a significant part of enterprise technology investments. However, what happens when these APIs start growing in numbers? Well, in that case, they will be hard to manage. It will become hard for you to evaluate the usage and performance of your APIs, and your API initiative will end up costing you many bucks instead of driving your growth.
Hence, having a solid API strategy is essential because doing so will always keep you on the right track so that APIs drive business growth and support existing value chains.
How to Create a Strong API Strategy in 2020?
Here’s the smartest thing to do while creating a strong API strategy: Never jump right into creating the API strategy. Instead, focus on customer experience and business strategy first. Know what your business objectives are and what decisions will lead to these objects. Decide what APIs you will have to set to establish communication between you, your partners, and your customers. Finally, identify the right design for these API so that you can draft for yourself an efficient API strategy that can effectively serve your purpose.
4 Pillars for a Successful API Strategy
1. A broad business strategy
Your business strategy is the first step towards building a successful API strategy. You will have to identify what objectives are you are looking forward to achieving and what execution plan you have in mind for doing that. Only then you can decide on the set of APIs which can make your business objectives possible.
2. Alignment between the organization and culture
Just having a solid business strategy is not enough for creating a successful API strategy. Your team members also need to understand what APIs are and how crucial they are for your business. You can only lay a good API plan if you include your team in the planning of outcomes you want to achieve. APIs should be the center of your business transformation.
3. Supporting technology
Technology plays an equally crucial role as processes and people in the API strategy. Once you have a strategy and the people you need to execute it, you need to think about what technology you need (an API management solution like Kong) and activate the API ecosystem accordingly.
4. Engaging the ecosystem
Once your APIs are in place and you have formed an ecosystem of users around it, the next thing you need is to engage it. There are many ways to do this: documentation, hackathons. Just make sure you treat your APIs like real products. You will be able to approach your API strategy better.
What makes an API Strategy Successful?
1. Relevant and up-to-date documentation
Relevant, up-to-date documentation is what will help your customers know about your APIs and derive maximum value from them. So, as a business, you will need to make sure your documentation is detailed and has a lot more than just the technical information about the API. The best practice will be to include some real-world use cases in your API documentation.
2. Tracking API metrics for success
Tracking API metrics will be a great way to measure the effectiveness of your API strategy. You will be able to know where your API strategy is lacking so that you can optimize it for the best results.
Following are the metrics you should evaluate:
- Revenue metrics like direct and indirect revenue, ROI and, CLTV (customer lifetime value) per developer.
- Operational metrics like uptime and error.
- Developer metrics like community engagement, documentation engagement, churn, and API.
3. Building a strong community of developers
A strong community of developers is another thing you need to craft an effective API strategy. Good developers can ensure API security, maintain strict security standards, and ensure that the confidential details within your organization remain safe. So, focus on building a strong community of developers.
A few more important things to keep in mind
1. Know the difference between business and traditional APIs
Both business and traditional APIs are different. While the former uses the language and semantics of your enterprise to ensure your company is projected securely, the latter expose functionality from individual systems like a CRM or an e-commerce platform.
2. Get your technology and marketing team on the same page
While you can’t have business APIs without your technology team, nobody will know or use the APIs your technology team created unless they are properly marketed. So, getting your technology and marketing team is another thing you need for building a successful API strategy.
3. Know what your business needs to project
The next you need is to know what capabilities can project your business in the best limelight. Then, you can accordingly create APIs that support your objectives and build great digital experiences.
4. Make wise decisions with point or cloud solutions
It takes the entire application portfolio of your company to offer exceptional digital experiences to your customers. So, strengthening your touch-points with cloud solutions which don’t provide integrated access to core functionalities like customer data, product information, and business process will only lead to unsatisfying experiences. So, you must be wise while choosing point or cloud solutions.
5. Embrace Self-serve
The good thing about business APIs is that you can allow anyone who is not even a technology specialist to create, maintain, and experiment with customer touch-points. So, make sure you embrace the self-serve model so that your IT team can focus on developing secure and reliable core capabilities that will create long-term business value and help you in future digital transformation endeavors.
In a Nutshell
A clear, efficient, and powerful API strategy makes users feel empowered and acts as a catalyst in business digital transformation. However, creating such an efficient strategy is easier said than done. While the blog might’ve given you an idea, there is still to building an API strategy when it comes to implementation in the real world. So, it’s important to seek advice from people who have experience with using APIs in digital transformation and having experience in the field we can help.