How the Best in the Business Are Succeeding With APIs

With billions of connected devices and apps now in use around the world and the number growing fast, APIs have become the core lifeblood of the digital economy. They are essential to being able to connect people, businesses, devices and apps all in a seamless network of consumer experiences.

Recent research we conducted with Coleman Parkes not only confirms the business benefits of using APIs but explores those who are most advanced in their use of API management and what results they are achieving. By learning what these advanced users are doing differently, we can map out a clear roadmap to improving business results using APIs.

API Business Benefits

Our global survey of 1,770 senior business and IT executives found APIs to be in widespread use: some 88 percent of enterprises currently use them.

Initially, organizations usually start using APIs to improve efficiencies in their own development efforts or to simplify integration among different applications. In fact, 42 percent of our survey respondents are using APIs for internal development and another 40 percent to integrate back-end systems and data.

The more surprising result was that roughly one-third use them to drive revenue (33 percent) and improve speed-to-market and innovation (34 percent). Additionally, around three-quarters believe that APIs have significantly enhanced their customer experience (75 percent) and digital reach (73 percent).

These results clearly show that API usage has evolved significantly, and organizations are now recognizing how critical APIs are to their external customer and partner initiatives.

Survey respondents also report significant business impact from APIs across many key performance indicators:

• 43 percent improvement in customer and partner satisfaction.
• 42 percent increase in transaction volumes.
• 41 percent reduction in IT cost reduction.

API Lifecycle Management

However, our analysis found that simply using APIs isn’t enough to unleash their true value to the organization. What’s needed is a sophisticated approach to managing the entire API lifecycle from conception to consumption.

This full lifecycle approach to API management requires a wide and complex range of capabilities. It demands the ability to connect legacy and current systems; rapidly create APIs in order to safely expose data; integrate this with back-end data and legacy apps; protect these integrations with the right levels of security; accelerate mobile development; and unlock the value of the resulting digital ecosystems through analytics and monetization.

As a result, our survey used an API management maturity model designed to assess how far organizations have implemented full API lifecycle management. It allowed us to discover how many of the necessary tools and technologies, systems and processes, and capabilities they have in place (see diagram), and then measure what impact that has on business results.

Based on the respondents’ answers, we classified organizations that had eight or more of these capabilities as having an “advanced” approach to API management, while those having between four and seven garnered a “basic” API management designation.

Worryingly, just 51 percent of the enterprises we studied met the threshold for having advanced API management.

The Maturity Advantage

Our comparison of the business impact of advanced and basic API management revealed some eye-opening differences. We found that more sophisticated API management is driving much stronger business results across the board.

On average, firms in the advanced camp achieved further incremental business benefits over the basic users:

• An additional 47 percent improvement in customer satisfaction.
• 41 percent more reduction in IT costs.
• 41 percent further increase in transaction volumes.

 The results of our research add up to a powerful business case for API use—and more importantly, for a robust approach to managing the full API lifecycle. Our study leaves little doubt about the critical need for effective API management in the digital economy and the clear benefits of moving up the API management maturity curve. You can read more about the full study APIs: Building a Connected Business in the App Economy.