There is an urgent need to make application programming interfaces (APIs) efficient and used more efficiently. This need is driven by the rapidly increasing rate of digitization that customers and industries are demanding from CIOs and CTOs. APIs are a powerful tool that can be used to deliver competitive advantage and market differentiation, with the two greatest demands placed on the technology team.

The Covid-19 pandemic has accelerated the digitization of society and, consequently, of vertical markets. In order to stay competitive, organizations have accelerated the pace of digitizing their business processes, which started before 2020 but accelerated significantly in response to the pandemic. Reports from management consultancy McKinsey that companies with successful technology teams have succeeded in differentiating themselves in the market. The technology in these organizations creates revenue and allows the business to adapt to market changes. Three-quarters of organizations with high-performing technology teams told McKinsey that digital transformation projects had reduced costs and improved the employee experience, and two-thirds of companies surveyed had increased revenue from existing channels; half had created new revenue streams, usually digital channels.

These trends are set to continue; 50% of CIOs responding to the recent Harvey Nash Digital Director study their market will change significantly over the next three years. “Creating new products and services has become one of the board’s top three priorities,” the report said. As a result, 61% of CIOs in the Digital Leadership Study planned to increase their teams’ technology workforce, but eight in 10 said recruiting and retention was one of their biggest challenges. Developers, data scientists and cybersecurity skills are the rarest. API developers required for cloud-native technology projects are most in demand.

This shortage exacerbates CIOs’ productivity issues, lack of skills within their teams, and recruitment issues that prevent organizations from adopting new technologies. A study by analyst house GigaOm reveals that API development processes suffer, which hampers productivity and innovation.

The pace of technology-driven business change is increasing the demand for API solutions. APIs provide organizations with the building blocks of new digital channels for customers, employees, and partners, which improves productivity and time to market for new products and services. Deployed effectively, APIs enable change without sacrificing security posture and corporate governance.

API efficiency

Despite the demand for digital transformation at the board level, studies repeatedly show that many organizations are unable to reach the levels of API usage that enable innovation. Worryingly, many companies are not getting a return on investment (RoI) from the API development that has taken place. An inability to organize the APIs leads to this usability failure. APIs must be easily searched, discovered, consumed, and collaborated on in order to deliver on their promise.

Without an efficient organization of the API fleet, complexity creeps in, which further slows down the organization’s development and innovation processes. Paradoxically, APIs were developed to allow developers to become much more productive.

CIOs and CTOs therefore face the challenge of increasing the number of APIs and API usage, but creating governance and security that ensures the sustainability of the organization’s digital transformation.

Organizations with high-performing technology teams identified by McKinsey are likely to have an effective API development, governance, integration, and management platform and strategy in place. Organizations that have successfully implemented a combination of an API-centric approach with API-driven integration have been able to achieve rapid digital innovation such as Quantas. Whether organizations choose a containerized approach using Docker or Kubernetes or other cloud-native platforms, API management technologies ensure API fleet scalability and management.

The GigaOm study also revealed savings per reused API of €30,000 in an enterprise; the organization has an inventory of 450 APIs and achieved a total savings of €600,000 across the entire API fleet.

API differentiation role

APIs provide developers with the tools to assemble these new products and services that digital transformation demands. Existing APIs, apps, and integrations can be quickly combined to meet the expectations of the board, as well as customers. This is because APIs open up parts of the business to anyone who can reuse them, be it a line of business, partner, or customer.

The adoption of open banking in Europe and the increased use of interoperable APIs in digital healthcare are paving the way for the use of APIs to create differentiated and customer-centric services.

Open banking is an example of how APIs have enabled a vertical market to meet the challenge of transforming its market without having to remove and replace legacy systems. These legacy systems are expensive to reformat and operate important business processes, posing a significant risk to the organization. API-driven transformations can be completed in weeks, while a good legacy technology transformation will take six months, but often longer. Headline-grabbing transformation failures have often involved legacy replacement programs, while APIs provide incremental, scalable, and reliable changes at low risk.

Good API practice

APIs enable business transformation when designed and deployed with strict adherence to best practices. All APIs should be designed for simplicity and reuse, which is best achieved by supporting multiple data formats and protocols. Reusable integrations and services also improve API reuse and ROI.

The demand for rapid digital transformation cannot compromise the organization’s security posture. API best practices provide authentication and authorization; manage keys, tokens, and secrets; symbolic mediation; or global identity and access management (IAM).

Once deployed, APIs have a lifecycle that requires full visibility into the API for all users and versions of the API. Without lifecycle management, organizations will find that their APIs become a costly drag on innovation.

Used effectively and managed with best practices and compliance, APIs provide CIOs and CTOs with a powerful tool to achieve the digital transformation their businesses and customers demand. A survey of 1,000 enterprise technology leaders found that 97% believe APIs have become essential and plan to increase the strategic use of APIs in their organizations. If CIOs and CTOs are to drive the innovation agenda and if technology is to be a key differentiator for organizations, optimizing and using APIs is critical to digital transformation.


APIs fuel proper digital transformation for business organizations.

Done correctly, API-driven innovation can save a lot of time and money while speeding time to market. Organizations can accelerate their digital strategy by tactically deploying API-centric services to take advantage of new opportunities without abandoning their legacy code. This means they can unlock the full potential of the business and allow their teams to spend more time designing and building revenue-generating digital solutions instead of focusing on time-consuming tasks like coding and editing. correction of errors.

Photo credit: Panchenko Vladimir/Shutterstock

Christopher Davey is responsible for solution architecture, WSO2.


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