API programs are fast becoming a new avenue of growth for enterprises of all sizes and domains. Many Industry Standards are based entirely on APIs. For example, Open Banking APIs are the standard in the field of Banking and Finance, GSMA One API does the same in the field of Telecom, and so on. Benefits of having APIs are quite well known, however, one needs to think and plan meticulously before diving into the world of web services/APIs. A lot of enterprises try this API First/API centric approach but only a few succeed.
Going for the API First approach not only involves technical changes, but it also sometimes involves a big cultural change especially for a big enterprise. Big companies are used to work as per a certain model and structure, which might be the complete opposite to the one required for API based approach. This makes it imperative for the stakeholders to spend a good amount of time churning out a proper strategy when they decide to implement an API program or set up the API ecosystem.
From a business point of view, below are few things to watch out for while designing and implementing an effective API strategy:
1. Lack of API Motivation
Like with most other business initiatives, a good starting point for an API strategy is to figure out what you want to achieve. Whether it is an increase in revenue, broader partner base, or competitive advantage – you should figure out the end goal before you embark on an API Strategy. This first step will help you make decisions about what you are going to API enable, how you will go about doing it and how it will be marketed once it is implemented. It is very important to outline the vision for your API program and prepare a roadmap for it. So, spend enough time answering this question and make sure you understand what you are going after. If the motivation is not there for the right reasons, the results can be disastrous.
2. Mistakes in Return-on-Investment Expectations
Most business initiatives are measured by their impact on the bottom line; the API program is no exception. If any business is going to implement an API strategy, then it should expect a decent ROI from it. Since direct consumers for your API program would-be app developers, you need to make sure you are devising your marketing strategy around them. Many businesses fail to plan how they are going to monetize their APIs and how developers’ payouts should be done. Also, ROI, in this case, should not only be measured in terms of money but also the non-tangible aspects like branding, thought leadership, and customer mindset. For example- RoI for an Over the Top (OTT) service provider is calculated by the monetization of its APIs, but for a large corporation, it is usually calculated by the developer engagement with its APIs. Many times, businesses ignore such things when they plan their API strategy.
3. Not listening to feedback from the developer community
Developer onboarding is a critical part of the overall API strategy of the business. App developers are direct consumers of your APIs. The success of your API program mainly depends on how easily developers integrate with your API program and make apps for those. Before launching a full-fledged API program, it’s advisable to release the alpha/beta version of APIs and expose it to a selected set of developers and get their feedback. Having this feedback can help you better plan your API rollout. Also, it’s a good strategy to prioritize those APIs that are expected to get more traffic, as it means you get more feedback and fix any issues quickly as well as plan for enhancements accordingly.
4. Mistakes in Estimating Traffic
When a business plans its API strategy, it needs to think of having good enough infrastructure to handle the load of live traffic. Sometimes businesses ignore this aspect, and this results in service disruptions, loss of data, revenue, and most importantly goodwill of end-users. This can turn a bright future into a nightmare. Remember – nothing kills a badly implemented API faster than good marketing. Whether you go with a cloud service provider or have your own on-premises data centers, you need to have projections ready for traffic estimated well in advance and should plan for infrastructure to support it.
5. Ignoring Security and Performance Challenges
When a business launches its API program, it’s effectively exposing some of its data to the outer world. Due to the risks involved, some of the businesses have very strict security protocols/checks in place. But it might have an adverse effect on the developers using these APIs because of the lack of seamless integration. Also, having more security-related policies can result in delayed responses from APIs which will eventually degrade performance. This is a very slippery slope. So, business needs to plan properly for such scenarios in advance while opting to implement its API program.
There have been some success stories in cases where a small company becoming big by having a good API strategy (Like Twilio, Sendgrid, Salesforce, etc.), or a big corporate giant moving to an API based approach to power its digital initiatives (Example- Barclays, HSBC, Vodafone). Regardless of the size of these companies or the domain in which they operate, they all have one thing in common – a good API strategy. Defining a good API strategy leads to the preparation of a roadmap for future digital transformation. It should set out the vision on how to go ahead and help define various milestones in the digital journey. Eventually, when an enterprise implements the API program, these milestones are the ones used to measure its progress or success.
I have helped large enterprises build scalable APIs for a long time. In my experience, the success of an API program depends largely on lining up your expectations and planning to meet them through an API Strategy. The importance of a good API strategy cannot be overstated. More time you spend on devising a strategy, the more chances of success of your API program increase. Remember – Well begun is half done.