The Importance of API for Businesses

June 8, 20228:08 am1079 views
The Importance of API for Businesses
image source: Well Data Labs

Digital agility is considered necessary for companies to drive scaled innovation, deploy new projects faster, and provide the experiences that customers and colleagues expect. Businesses that can establish a base of digital agility will be better ready to respond to change quickly and without being impeded by IT or operational constraints. MuleSoft, provider of the leading platform for building application networks, revealed the findings of its 2022 Connectivity Benchmark Report on how businesses can make use of digital agility through Application Programming Interface or often known as API. Here is a quick summary.

API at a Glance

API is a software mediator that allows two programs to connect with one another. Simply put, it works like this: when you use a mobile apps, it connects to the Internet and sends data to a server. The server then receives the data, processes it, takes the proper measures, and delivers it back to your phone. The program then analyzes the data and displays the information you want in a readable format. This is what an API is – everything happens through an API.

Kurt Anderson, Managing Director And API Transformation Leader of Deloitte Consulting LLP said that the era of the ‘composable enterprise’ has arrived. This enables anyone to build new products and services by leveraging existing digital capabilities rather than starting from scratch each time. This approach improves digital agility by relieving IT of burdens and freeing up time for innovation. The importance of API for businesses are due to arise in today’s digital era of composable enterprise, such as:

  • On average, companies could lose $7m if they fail to complete digital transformation initiatives properly. Although companies now adapt more and more apps, compared to the previous decade, they are not fully integrating them. This impedes legacy code and systems, siloed data, and skills shortage.
  • Still related to the previous point, data silos are still a tough challenge for 90% of companies surveyed. There needs to be more data scientists, business analysts, and customer support staff to ensure integration demands are met. Yet, the biggest challenge is on how to incorporate data-derived insights into user-facing apps.
  • 52% of IT projects failed to be delivered on time per 2021. There is an average of 40% increase on the number of IT projects to be delivered. On the other hand, companies’ current infrastructures are not adequate; they continue to slow down the speed of project delivery, which turned the department into an innovation bottleneck.
  • Integrating user experiences becomes another major challenge for 55% of companies surveyed. This is 7% higher than one in 2020, since security and governance challenges became more prevalent, but the infrastructure got more outdated as the time went by.
  • More than quarter (26%) business leaders call for a company-wide Application Programming Interface (API) strategy, which is twofold from the demand in 2020. AT the same time, the number using APIs to build integration has not changed within the intervening period.
  • How important are APIs? It is revealed that on average, 35% of companies’ revenue is now enhanced by APIs and its supporting implementations. Leaders are recognizing how the integration of API-led connectivity with automation can deliver better experiences for both employees and customers.

Company-wide API Strategy

Despite the operational issues that many businesses experience, nearly all (98%) companies as surveyed now use public and/or private APIs, an increase from 96% a year earlier. This shows the growing awareness that API-led connection and reuse can be a critical facilitator of digital transformation and a driver of company success. The value of APIs as a driver of linked user experiences is being recognized by leadership. The percentage of companies that require a company – wide API integration strategy has increased from 15% to 26% in only a year. API-led connectivity has the advantage of accelerating time-to-value and cost efficiency while decreasing the barriers of entry for non tech users. Businesses are already using this to develop new experiences and accelerate processes. 

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Benefits of API to Drive Value and Revenue

APIs are adding significant value to enterprises through improving performance and increased adoption of self-service IT. These projects have also increased innovation, time-to-value, and teamwork. APIs can thus provide significant revenue potential growth. APIs and their implementations currently produce more than a third (35%) of an organization’s revenue. Organizations have realized that integrating API-led connectivity with automation may improve employee and consumer experiences. As global enterprises strive to provide the experiences that their employees and customers demand, the convergence of automation, integration, and API management will become increasingly appealing.

Addressing Security and Governance Challenges

As IT teams shift to API-led connectivity features, security becomes an increasingly crucial matter. A major incident might cause transformation programs to be delayed or even halted entirely. Companies need to look for vendors that can provide multi-layered protection for their data, the API that enables access to it, and the perimeter around which the API is implemented.

Maximizing API reuse

The age of point-to-point integrations is nearing its end. Reusable API-led integration is a more flexible, agile, and cost-effective solution to provide the experiences your users and customers desire. It is more efficient, less expensive, and requires less work from IT and business users.

Digital transformation has become a critical driver of customer engagement as well as employee productivity. A technologically advanced strategy combining integration, API management, and automation is critical to achieving digital agility, allowing companies to efficiently connect and integrate the data, applications, and devices that power new digital capabilities. In the end, this also provides resiliency, stability, and security for existing platforms utilized by businesses.

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