Computer programming / coding can seem like a distant universe thats hard to grasp entirely, however, when it comes to APIs or Application Programming Interfaces and your business, it’s something that requires a little time and effort to really comprehend. Nowadays, businesses are focusing more on social media (such as Twitter, Linkedin and Facebook) and other alternative channels to drive their traffic up and generate revenue. However, traditional APIs have resulted in the success of a lot of now-major firms and are a necessity if you want your business to truly thrive.
But what exactly is an application programming interface? An API allows various software programs to interact with each other in order to offer a better service – for example, copying and pasting text between documents is the result of an API, where one piece of software effectively asks another to perform a specific service. It may sound a tad confusing, but chances are you’ve already used an API before. For instance, when you access an integrated Google Maps application on a website or if you order movie tickets through another website, those sites are performing a number of services and are interacting with other pieces of software in order to complete tasks. Not only is an API useful and necessary, it allows for a better streamlined process and more effective results in the hands of the consumer.
This is why API is so important for businesses, and why it shouldn’t be discarded for other channels of communication such as social media.
The API economy has brought about a veritable revolution in terms of growth and expectations within the business community and some big names are the direct result of what good API management can achieve. Take Airbnb.com for example – a company credited in completely disrupting the Hotel booking business all around the world – Its a service that allows short-term renters to connect with homeowners or other landlords, and vice versa. The AirBNB API allows developers to access and integrate the functionality of AirBNB with other applications and to create newer applications on top of that. This type of service that allows for two-way communication has helped Airbnb to make a name for itself by streamlining and integrating services, but other businesses have suffered. More traditional hotels and other services of the genre that can’t, or either don’t, maximize the benefits of API simply can’t keep up with those that do, and the whole sector has been completely changed, especially in areas with high demand such as touristic sites.
At the WSO2Con 2014, the Commonwealth Bank’s head of innovation and digital financial services technology, Asia, Rana Peries, stated that “The API economy is an economy where companies expose their business services in the form of APIs to external parties in order to generate additional revenue. Today’s customers are demanding a more personalized service which is integrated to their lifestyles [and] this is translating toward delivery of next-generation services such as taxi services and the banking and payment industry.”
So Does your business need an API ? Companies should also look at implementing internal APIs, that is, a beneficial system that is internal to a specific corporate structure. Internal APIs have multiple benefits – for instance, they can allow for more security with regards to cross-departmental interactions. They can also increase productivity depending on what your system of record is (for a hotel, your system of record would be your reservation system – something that generates key revenue). Finally, another main benefit would be the minimal effort it would take to develop applications when using API ecosystems.