APIs: the tools turning every company into a tech company (yes, yours too)

When you think of tech companies, you wouldn’t necessarily think of your local movie theater. But, invisible to you, your booking required the theater’s online portal to access and correlate data from numerous systems inside and outside the organization – a precise and technical process.

Today, companies of every shape and size are embracing digital transformation and working more and more like tech companies. With the internet of things growing in both scale and ubiquity, the way companies communicate is changing. There’s an increasing need for correspondence between companies and customers, partners and internal stakeholders.

Mature tools for a mature approach to transformation

The magic that makes this all possible is APIs – application programming interfaces. These have long been seen as purely technical tools, but APIs are fast becoming mission-critical components of a business’s functions.

APIs have arguably been in existence for as long as computer science itself. The fact they are still around is a testament to their maturity and adaptability. Rather than being left behind, APIs have evolved to not only meet the needs of a rapidly changing world but to become the ultimate enablers.

Because of their modular nature and their ability to link together and pull data from disparate systems, they are developing into the key tools used in building new services and revenue streams.

The human interface

The “interface” aspect is an important part of developing new services, particularly when it comes to the aforementioned mobile devices. Consumers are used to an always-on experience and are continually demanding more and more from their brands.

APIs are the digital building blocks that allow businesses to respond to the wants of their customers and assemble the new products and services that they expect. Rather than starting from scratch each time, APIs allow a company to expand on their existing portfolio – essentially standing on the shoulders of giants.

Building on API successes

In financial services, APIs are already core technologies. Customers are increasingly driven by convenience rather than loyalty, and they are attracted by the best customer experience as much as the best interest rates. Banks that utilize APIs to allow consumers to transfer money or organize a loan from their mobile devices are far more likely to win – and – retain customers.

In our report, Unlocking the hybrid integration dividend, we analyzed the results from our survey of 818 IT executives between March and May 2018. Our findings revealed the extent of API adoption – we found that the average number of internal APIs used by companies is 107, and the figure for external APIs is 116.

In the US, T-Mobile employs over 300 APIs, which has allowed them to quickly deliver new services to their customers. “With our T-Mobile One product, customers with family plans get Netflix on us,” said Chuck Knostman, vice president of Strategy and Technology, T-Mobile, in our report. “The Netflix integration with the APIs took us two weeks to get up and running. Completing this type of integration in the past would have taken anywhere from six to nine months.”

The integration edge

This is not an uncommon story. In our report, we look at how digital transformation separates companies into two bands – Integrators and Deliberators. Integrators are the most advanced group – the companies that have progressed further and enjoyed the benefits from modernizing their approach to integration. Deliberators are the firms that haven’t developed a hybrid integration strategy.

We have found that 40% of Integrators were able to use APIs to combine their products or services with those of partners to create an integrated sales or marketing offer, as opposed to 25% for Deliberators. Similarly, 36% of Integrators saw a reduced time to market – 50% or more – for a new product, something only experienced by 22% of Integrators.

Not only for the few

In the same way that Hollywood used to portray computers as the sole province of boffins and scientists, the misconception that APIs are tools sitting exclusively within the IT function lingers on. But times, and technology have moved on, and perceptions need to as well. Those boffins and scientists are now the heroes who save the day, and APIs are becoming the same.

Organizations need to wake up to the power and strategic value inherent in APIs – it’s surprising that, with the Soaring Twenties only one year away, so few businesses have embraced the opportunities, new revenue streams and competitive advantages that APIs can bring.

An API-first and microservices-led architectural strategy is something that benefits the entire enterprise, from the client to the back-end. It’s the key to delivering a consistent end-to-end business solution, making it goal that all forward-looking businesses should aspire to.

For more information, download our white paper, Unlocking the hybrid integration dividend

Cliff Evans

Expert in Digital Customer Experience, Digital Transformation, Mobility

I am a thought leader in digital transformation, always interested in finding the next area to be impacted by the adoption of new digital technologies. I have a successful track record of taking these ideas and translating them into practical business benefits at a national and a global scale, for clients across a range of industry sectors. As an example, I created Capgemini’s Digital Services Orchestration framework for cloud services, Immediate, which underpins the delivery of large scale Digital solutions.