Most people tech industry already know the transformative power of APIs. Web APIs can manage data and enable collaboration between apps and databases. The advent of connected ecosystems has transformed the way companies and customers interact.

However, it’s only recently that solely API-focused businesses have become viable. API-first unicorns have emerged, demonstrating that monetising an API can be a big sell. For example, one of the fastest growing companies in the payments sector is API-based. In essence, we’re in a new “API as a product” paradigm.

In addition to improving product experience, it can also be a revenue generation stream. APIs can improve many areas of the business both internal and B2C. APIs can improve digital experiences, decrease churn rates, expand product lines, and drive innovations. Let’s review some business benefits that every company can anticipate when leveraging an API strategy.

Keeping up with digital expectations:

Perhaps the number one business benefit of adopting APIs is digital transformation. Since consumers are being pampered with high performance apps and services, their expectations for digital experiences are tremendously high.

These new stakes have ushered in demand for interconnected experiences across many channels. Customers expect to smoothly interact with brands and across different brands via digital touch points. The digital touch points can be as many as website, web apps, text, voice, AI chatbots, mobile, desktop, kiosk and more. Data integration now requires multi-platform connectivity, and utilising APIs for this is the most efficient and cost-effective method.

But APIs offer more than just improving customer experience. Product teams have the power to bring numerous business benefits. Some of these include:

  • Efficiency: API-based services can increase reusability, significantly reducing operational overhead.
  • Partner networks: APIs provide an automated way for any third party partners to integrate with your data and ecosystem.
  • Community building: Third-party developers can help spread brand awareness and increase audience size.
  • Productise: Companies may productise APIs in their own right as Software-as-a-Service (SaaS) further acting as a revenue stream.
  • Regulatory: APIs are helping companies meet new data-sharing regulations e.g. Security compliance, GDPR etc.

These are only a few ways that APIs may help organisations react and adapt to the rapidly changing digital landscape. Now, let’s see some specific industries that are especially impacted by APIs.

Examples of API-driven industries:

Financial services

Some financial services companies are using APIs to offer modern digital experiences. It can also offer cross-platform connectivity across various services for example,using a payments API to allow third parties to set up secure payments on behalf of customers, making payment transactions faster and more secure.

CRM software

Cloud-based CRM software developers have been some of the first to fully commercialise web APIs. Originally processed with standalone applications, the CRM software industry transitioned to the cloud after identifying strong customer desires to share data across business applications.

Utilising APIs, they extend their offering with Software-as-a-Service (SaaS) offering further inter-connectivity with of hundreds of apps, opening new markets and supporting customers with new features. For CRMs, utilising APIs enables customers to leverage their data within a wide variety of external business applications. This extensiveness brings stickiness and a competitive edge to a platform.

Energy and utilities platform

Modern sustainability and green tech companies can make use of web-based APIs and web services to track carbon emissions across various business functions from manufacturing to office spaces. Companies looking to track and reduce their environmental impact can greatly benefited from using APIs and corresponding utility tools to track, identify and reduce their carbon footprint. Few standardised APIs are available which easily integrate with utilities provider or your grid while offering near real time updates in mobile applications.

Today’s innovation boundaries are permeable

Companies find success when they can quickly respond and adapt to market trends and release new iterrations of their products promptly. To innovate more rapidly and meet the expectations of customers, companies can leverage third party APIs to great extent.

By outsourcing technical components, enterprises are free to focus on their core competencies. In this way, consuming API-based services help developers iterate at a faster pace. Similarly, companies should focus on externalising their key strengths for others to consume — this two-way process is key to participating in the platform economy.

A similar experience occurs when external developers use your API infrastructure to innovate and build. These third-party developers may extend your products and services to fresh markets, reaching new audiences. Developer ecosystems stimulate innovation in the form of application mashups and novel concepts.

Companies can focus on their core products while third-party developers push boundaries of innovation through APIs, arguably a modern R&D tool.

Thinking beyond APIs as technology

As APIs become instrumental company assets, they continue to demonstrate their business value. Rather than simply a technical tool, companies should view their API as a product.

Being valuable assets, companies should also include APIs in overall product roadmaps and customer journeys. Only with these components can companies fully realise the benefits of an API ecosystem.

Conclusion

Fuelled by new customer expectations, many companies now use APIs to accelerate product development.

Companies can leverage third-party products and services to create and deliver modern experiences to a broader audience than they can alone. Core products and services benefit from external innovation as well, pushing them to enhance and evolve at a faster and more efficient rate.

APIs are a powerful mechanism for enabling digital platforms to flourish. Able to generate a healthy return on investment as products in their own right, APIs help companies realise the value of a full ecosystem, which, in turn, leads to more business success.

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