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Industry Insight

Unsung heroes of the app economy

How to build an effective application programming interface management strategy in the South African market.

Application programming interfaces (APIs) are the unsung heroes of the application economy. Modern applications simply wouldn't exist without them. APIs are sets of defined rules that govern how one application can talk to another, providing ready-made, universal access to whatever functionality a company needs to deliver.

It doesn't matter whether users are using an app to book a bed-and-breakfast venue, checking in for their flight, finding out when their Uber will arrive, or messaging a friend… an API will have connected them to this data.

On the Web, APIs make it possible for services like Google Maps or Facebook to let other apps ‘piggyback' on their platform. Trip Advisor is an example – it displays nearby restaurants on Google Maps, just as airlines display hotel and car hire offers beside the flight reservation details.

Companies are swarming over APIs like bees around a hive. A new global study called APIs: Building a Connected Business in the App Economy surveyed 1 770 senior executives, including 695 in Europe, Middle East and Africa (EMEA). It found 90% of companies across EMEA have now adopted APIs as a strategic business tool, with almost one-third using them to drive new revenue growth initiatives.

Many companies reported significant results: 72% reflected improved customer experiences attributed to the use of APIs; 68% cited an increase in digital reach; and two-thirds experienced improvements in their supply or demand chains. Moreover, enterprises using APIs increased customer satisfaction by 40% and revealed significant cuts in IT costs by as much as 39%. Forty-eight percent also believed API usage translates into a competitive edge, as it helped them to differentiate themselves in a crowded market.

APIs inspire innovation

The study revealed more than two-thirds of EMEA organisations reported an improvement in their ability to leverage third-party developer innovation using APIs. By opening up and sharing select data with third-parties, these companies are benefiting from partnerships by exposing services to drive new revenue channels.

Companies are swarming over APIs like bees around a hive.

Among these innovations are ‘conversational commerce' services that enable consumers to interact with brands or aggregated services using chat, messaging or other natural-language interfaces. For example, instructing a mobile device using natural language to book a flight and aggregating different services together to book a preferred hotel, restaurant or taxi partner at the destination.

The adoption of APIs is also driving the uptake of new e-government services, ranging from tax filing and voter registration, to the payment of fines and social housing applications. In France, for example, a new API portal has been released by the government, enabling both the public and private sector to offer citizens composite digital services, regardless of which agency offers the actual service.

In Estonia, APIs underpin an innovative e-residency programme through which citizens can perform various public services, such as setting up an Estonian company online or completing tax returns. So far, 10 000 Estonians have signed up for the service.

Vote yes for APIs

In SA, as part of its commitment to transparency, efficiency and innovation, the Electoral Commission has created APIs to provide data in real-time to stakeholders for use in or by third party Web sites, mobile devices, political parties, media institutions and other interested parties to retrieve data relating to voters and election results.

With the primary focus on connecting data, people, systems and devices, the most important digital initiatives will all rely on APIs to deliver the robust and flexible integrations required. In addition, as the rate of technical innovation and the number of connected devices increase throughout the global (and local) economy, so too will the importance of APIs, and how they are created, consumed and managed at scale. Successfully executing a digital strategy requires the ability to quickly launch and adapt new digital experiences and co-ordinate a digital presence with trading partners.

While APIs themselves are not a new innovation, it's more important than ever in the digital economy to manage them effectively. That unified approach to management enables companies of all sizes, in all sectors, to level the competitive playing field, and cope better with the rising volume, scale and volatility of customer-facing apps.

So, why is an API management strategy necessary?

It is crucial to have a clearly thought out strategy when one considers that API management speeds up digital transformation by bringing systems together, securing integrations, delivering better customer experiences faster and enabling enterprises to capitalise on new opportunities.

An API management strategy specifically enables companies to create, secure and optimise APIs throughout their life cycle and at enterprise scale. Ultimately, API management accelerates digital transformation.

This particular study included an API management maturity model, which assesses the degree to which companies have implemented the tools and technologies, systems and processes, plus the capabilities required for full life cycle API management. The model showed a significant disparity in success between companies at an "advanced" stage of API management use versus those at only a "basic" level of use.

In my next Industry Insight, I will outline the steps necessary for effective API management.


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