What is an API? If you’ve ever logged into an app using your Facebook account, turned on your thermostat with your smartphone, or looked up your location using Google Maps within a different service like Uber or DoorDash, then you’ve experienced the power of APIs—probably without even realizing it. APIs are the glue that holds the modern digital world together—and they’re just as important to enterprise organizations as they are to individuals. But most importantly, they’re leveraged by enterprise organizations to improve the digital experiences of the customers who use their products.
Simply put, APIs are a way for two or more applications to communicate with each other. The purpose of an API is to exchange value. But API value that is created but not consumed is not valuable. A productized API, which is an API oriented toward the consumer’s end goals, is incredibly valuable.
Because productized APIs are so essential to the end-to-end customer experience, you should be aware of why they’re important to you. And unfortunately, this is easy to miss. In this article, we hope to educate you on the importance of APIs within your company. Here are some reasons why you should care about APIs, broken out by job title: CIO/CTO, CMO, CDO, and CCO.
Chief information officers (CIOs) and chief technology officers (CTOs) are responsible for technology modernization and API program federation across the enterprise, meaning that they need to ensure that their internal solutions are easy to use, time-saving, and cost effective. Depending on the organization, this goal can be more complex than it may seem at face value.
For example, we worked with a large US-based health insurance company to transform its API practice. The client’s digital marketing had been performing point-to-point integrations that required a significant amount of effort. When we talked to the client’s IT group, they said that the end users of their portal—the company’s individual brokers—were happy with it. However, when we talked to these brokers, they said no—they wanted to use their own business system to get needed company information, so they wanted APIs that could easily integrate the two systems.
We soon found that the IT group’s APIs were difficult to use and complicated to integrate. So we implemented a process of productizing the APIs to solve the problems that the brokers were trying to solve—instead of creating a comprehensive API that the IT group was trying to create. As a result, in the following year, our solution allowed the client to onboard 45 new brokers, whereas previously it could only onboard three.
Why were we able to greatly increase onboarding? Because we productized our APIs, and created an enormous amount of new revenue value. When you can make something accessible that solves the right problems, you in turn unlock value.
A recent Forrester blog post, Predictions 2023: Citizen Development And The Metaverse Stir Up Software Development, projected that: “More than 40% of API strategies will be driven by enterprise business leaders vs. IT.”1 This is a radical change from what we’ve seen in the past, because the majority of the buyers, whether they’re the decision-maker or the owner, have been predominantly in the CIO tower. This flip is consistent with what we’re seeing when we work with clients to create valuable experiences. Executives for different business units have digital experiences they need to build, but they often report that their number one problem is the CIO. So, if we can teach CIOs how to properly productize their APIs, they can become a better service provider to the business—and unlock more value for everyone.
One of the largest challenges that chief marketing officers (CMOs) face when they’re creating new experiences is that many of them fail because they cannot gain the proper access to downstream capabilities—meaning that the APIs aren’t there, they don’t work at all, or they don’t work for the problems they’re trying to solve. And the reason they don’t work is because they were built based on what systems do—they weren’t built based on what the experience they’re trying to create requires in order to exchange value. In our digital world, CMOs are increasingly tasked with creating and managing digital business capabilities, and with productized APIs, they have all the capabilities they need to achieve value.
APIs need to be looked at in the proper context. CMOs should ask themselves, “What do we need to do to liberate capabilities so that we can exchange value at speed in the marketplace?” Proper productization and understanding of APIs will make CMOs, the marketing teams they manage, and their companies as a whole, successful.
This is why APIs are important to CMOs, even if they don’t realize it. If their APIs are productized, meaning that they’re built to serve the capabilities they need to unlock value in the marketplace, they win.
One client of ours, a major agribusiness, discovered this when it began to develop a comprehensive digital strategy. The client needed innovative solutions that would serve a variety of stakeholders. From growers looking to address the increasing complexity of farm decisions to online engagement platforms that improved ease-of-use across preferred channels and partners seeking to “own the grower relationship,” the client sought a roadmap to a more connected future.
To accomplish this, it tapped us to help build the foundational elements of an API program to promote grower interaction. The API program would enable new digital offerings, including a customer experience portal for crop consultants and growers, an ecommerce platform to enhance grower sales, and additional agronomic capabilities.
Through a powerful API program strategy and governance plan, we were able to implement the Apigee API Gateway management platform and a branded developer portal in only three weeks, significantly ahead of schedule. This foundation was essential for quickly building and publishing APIs as products. One of the first available API products cataloged in the developer portal was specifically designed to deliver shipping and tracking statuses for input delivery. The first partner to integrate was able to consume and implement the API within two weeks. Previously, this type of partner integration would have taken months to complete. Within six months, more than 12 APIs were published and in use by customers.
As you can see, API productization allowed the client to meet the rapidly evolving demands of its partners’ customers, and scale capabilities without scaling its staff. For CMOs, a digital strategy that serves a variety of stakeholders can be accomplished by harnessing the power of APIs.
The chief digital officer (CDO), who’s tasked with shepherding their company through digital transformation, and the chief customer officer (CCO), who’s responsible for leading their company to meet customer-centric goals, are both relatively new positions at enterprise organizations. Their responsibilities are important, however, because customer experiences are changing rapidly. As experiences continue to evolve, they become more complex, which requires newer capabilities that align with what the market is asking for. Productized APIs, which are oriented to creating the experiences that CDOs and CCOs are after, can unlock the ability for them to solve these challenges more quickly.
Listen up, C-suite—you need to pay attention to the magical power of APIs. You may think your number one barrier to success is employing edge technologies, building a new mobile application, or creating a better loyalty program. But you can’t do any of those things if you don’t have connectivity. APIs can provide that connectivity by orienting to the capabilities you’re trying to solve—and in doing so, help you to solve organizational problems.
Learn more tips, best practices, and rules of API productization in our API economy playbook.
EVP, Solutions & Innovation