APIs can be strategic tools to unlock business value

Opinion

APIs can be strategic tools to unlock business value

Teresa Tung and Michael J. Biltz

This year’s Accenture Technology Vision asserts that every business is a digital business, and digital business ecosystems are powered by application programming interfaces, better known as APIs.

First the good news: enterprises now own vast stores of valuable data that have the power to boost revenues, drive down costs and present smarter ways of doing business. They have also become increasingly adept at offering digital services to customers, which generate both revenues and ever more precious data. More and more we will also see businesses relying on data and services from other organisations.

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The downside? Much of that data and services are stuck inside isolated applications within the enterprise. Furthermore, customers are becoming more demanding and already expect those services the way they want them, on mobile or social platforms, and tailored to them.

In satisfying those customers, companies often find themselves adopting APIs. APIs can be described as the glue that binds the enterprise’s applications together – enabling exchanges of information between them, offering on-demand access to valuable data and services.

APIs emerge as strategic tools

APIs have been around for many years, but until now have remained a niche interest to programmers. 

The smartest businesses have worked out that APIs – which used to be technical artefacts – are now hugely valuable strategic business tools. Not only do they enable an organisation to make its underlying data and functions available for general use, driving efficiency and agility across the enterprise and partner ecosystem, but they can also be open to developers, both internal and external, who can harness this familiar web-based technology to build new and innovative business uses. 

As APIs standardise functionality, they accelerate development – particularly as business moves into cloud, mobile and social.

In other words, an API offers a way to unlock the value of a business’s digital assets and to extend its reach through leveraging the integrations and development across the enterprise, from partners to independent developers. The business can then leverage these relationships to create more and more value from augmenting its key assets. It represents an opportunity to innovate and even to develop brand new business models.

Creating a successful API programme

However, not all APIs will deliver these benefits – only those that are conceived and designed with the business’s goals in mind. The key is to get past the technology and start thinking about APIs as a product.

That works on two levels. An API may be a vehicle through which customers access business functionality – at a company such as Salesforce.com, for example, 60% of traffic now arrives through APIs. The API itself represents the brand to appeal to the developers who use the APIs.

An API offers a way to unlock the value of a business’s digital assets and to extend its reach

In either case, the basic laws of product development apply. Developers won’t use the APIs unless there is a differentiated reason – offering unique functionality, for example, or to make the developer’s job easier. The API product must appeal to the developer through ease of use, terms of service and user support.

Moreover, for businesses to make the best use of the API product, they need a strategy. In the past, when APIs were developed on an ad hoc basis for specific needs, it was acceptable to leave them to IT alone, but now these tools are a product supporting a business objective, a more strategic approach is required.

Businesses must rise to that challenge to expose the right API product to support a business objective. To appeal to a developer segment, it is not one-size-fits all; unlocking internal efficiency may require different technology, terminology and support in the API product than one that is designed for consumption by partner developers or by independent developers. If the process is properly managed, it is possible to create APIs that will unlock efficiency, innovation and even monetisation.

Measuring API value

This level of control will also enable businesses to measure the value of their APIs – who is using them both internally and externally, and why. Plus, what level of return is being generated, either in direct monetary terms or in the context of a particular business goal. Ultimately a strategy helps the business evolve and ensure the continued success of the API programme.

It is time for businesses to recognise the potential of APIs and to begin managing the process of unlocking that potential

However, none of these outcomes will be achieved unless businesses start to take their APIs much more seriously – first identifying their core digital assets and then establishing an API strategy for maximising their value.

Today’s technology landscape around social, mobile, analytics and cloud means that every business is a digital business where the API is a product. With such a pivotal role in enabling these trends, APIs will become the de facto integration model for IT systems within the next three to five years. 

Companies must remember that the API should take a primary role in the business. Businesses must have a strategy, and within that identify who is responsible for API management. The API programme should be treated as a line of business within the digital business.

It is time for businesses to recognise the potential of APIs and to begin managing the process of unlocking that potential.


About the authors

Teresa Tung, PhD, is a senior manager at Accenture Technology Labs.

Michael Biltz is a director at Accenture Technology Vision.


Image: Fotolia


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This was first published in July 2013

 

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