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article imageAPIs recurring theme in digital transformation

By James Walker     Sep 15, 2017 in Technology
APIs are the driving force behind successful digital transformations. They're enabling growing numbers of digital strategies, offering companies "off-the-shelf" tools to build new technologies. Amid a culture of rapid change, APIs give firms leverage.
APIs are the public portals developers use to access data from external services. It's how different websites and apps interlink behind the scenes, allowing you to get a ride from Uber when you talk to Siri or share a photo to Twitter when you post it on Instagram.
APIs are also being used for enterprise software. As digital transformation takes hold, APIs are rising to prominence as a driving force of the trend. For digital industry to flourish, data needs to be able to flow between different services. If everything is siloed off, insights into the data are limited. It's only when platforms interlink that their true value becomes apparent.
It's a lesson digital providers have already learnt. APIs have allowed incumbent tech firms to become dominant in their market. Apps such as Slack soared to popularity because of their API.
In the case of Slack, the wealth of third-party integrations available allows companies to use the messaging app as a hub for their business. Slack's API works with virtually all other enterprise tech solutions, turning the barebones chat app into the centre of an organisation's digital collaboration.
APIs are now transitioning into an even grander role. Forward-thinking businesses are realising the opportunities that APIs can offer. By opening up data pools and encouraging sharing, services can be stimulated into more rapid scaling. The "Slack effect" could ripple across industries from energy through to retail.
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There are challenges to overcome though. One of the biggest issues is the cultural shift required for an API to be endorsed by a company. Businesses coming from a non-digital background may struggle to view an API as an asset. It might instead be regarded with a measure of suspicion. The value in offering public access to a carefully curated data pool could be overlooked or misinterpreted, particularly as APIs are always-on and can't readily be disabled.
Companies also have to actively maintain their APIs. Security risks need to be addressed, the API has to be updated to match platform changes and documentation must be published to help third-party firms utilise the resource. The demands of these tasks aren't trivial. Keeping a large-scale API online could consume more resources than a company initially allocates.
The results can be worth it though. A MuleSoft study in 2016 found one-third of large organisations with over 100,000 employees generate over $10 million in annual revenue from their APIs. Uptake is growing, with 35 percent of organisations who don't already have an API intending to implement one.
As digital disruption increases, interoperability with different services and platforms will be critical to individual success. Alone, a company's data pool is limited. Only when it's combined with data pools from across the digital economy does it hold true value to external stakeholders. In many ways, APIs are the gatekeepers to digital, offering new firms a helping hand while ensuring they contribute back into the API economy.
More about Api, digital transformation, digital economy, digital era, Data
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