Spencer Nguyen - April 20, 2022
Application Programming Interfaces (APIs) are critical to the agility companies need to respond in real-time to market changes. Digital transformation is no longer a choice. It’s a must for companies to compete in the digital economy. Here’s our take on how APIs work, API benefits, and a few tips on how to incorporate a few of the most common uses of APIs into your business strategy.
Turning customers into brand loyalists requires a sharp focus on leveraging technology as a business strategy. APIs are central to that strategy.
An API is a software intermediary or middleman that follows a set of rules for two software components (endpoints) to talk to one another. These APIs allow systems to communicate regardless of programming language (Java, Javascript, Python, etc.) or operating system. They allow developers to create more efficient web application user interfaces by consolidating information from multiple backend systems. APIs act as a catalyst for innovation. They collect data from mobile applications, websites, internal systems, and partner systems. A few real-world examples of APIs and the most common uses of APIs include:
- Google Maps API
- Social media APIs such as the Twitter API
- Paypal API
- Amazon Web Services
- Internal APIs for integrating data silos within the organization
Using APIs empowers companies to analyze and find new ways to use the information to bring value. An API-driven business model means investing in and using an API ecosystem to drive business strategy.
Business Agility
The ability to quickly respond to market change. is an indicator of business agility. The most agile companies capture emerging opportunities to innovate. Doing business in the digital era requires an unprecedented level of interconnectedness between customers and business partners. Using APIs is one of the most common uses of APIs that has many advantages.
- Better and Faster Decision-Making — API integration allows companies to consolidate information from their data silos into existing reporting tools. This makes it easier for leaders to take the best action based on a more holistic set of data.
- Legacy modernization — Companies are taking on digital transformation programs to refactor monoliths into microservices or web services. This is one of the common uses of APIs that is critical to successfully upgrading these legacy systems.
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Common Uses of APIs Drive B2B Integration
B2B integration is one of the more common uses of APIs that is on the rise. According to Gartner, by 2023, over 50% of B2B transactions will be performed through real-time API calls versus traditional approaches. Business-to-business (B2B) integration is the automation of business processes and communication between two or more organizations. It allows them to communicate more effectively with their customers, suppliers, and business partners through public APIs by automating key business processes.
Digitalization is pushing partner and customer expectations. Organizations are finding that the existing way of processing information is not sustainable in a digitally-connected world. And every business has its own mix of systems and applications for exchanging files and messages with partners. Disparate technologies make it difficult to communicate.
By weaving partner APIs into your B2B strategy, you are enabling new digital business and real-time patterns for information exchange. You are also taking steps to help drive an ‘API First’ design principle within the company. The additional benefits include:
- Instant Information Transfer — One of the benefits of using APIs for digital transformation is instant information transfer. Companies no longer need to rely on batch processing. Instead, they can make an API request to get the most up-to-date information.
- Faster Deployments — Speeding software development is another of the most common uses of APIs.They keep developers from having to reinvent the wheel. They can use an API to access an existing system to get the information they need.
- Easier Onboarding — Today’s business environment requires efficient and fast information exchange between partners. Yet, that can be challenging due to disparate technology. Some companies use legacy technologies, while others store information in the cloud. This is another of the common uses of APIs that empower companies to integrate systems regardless of the underlying technology. This makes it easier and quicker to get set up with partner integrations. With these types of integrations, companies can connect to an external API, perform authentication, and exchange information securely.
Improving The Customer Experience
According to IDC, over 64 zettabytes (ZB) of data was created in 2020, and that figure is predicted to grow at a rate of 23% up to 2025. More data, however, doesn’t always equate to insightfulness and helpfulness. Data silos, proprietary systems, and system complexity hinder the ability to deliver seamless customer experiences.
Customers are the foundation of any business. Improving the customer experience is critical to an organization’s sustainability. Customer data may be kept in different systems throughout the organization. Delivering seamless omnichannel experiences requires data integration from different systems. A strong API economy enables this strategy.
To overcome these challenges, organizations need a way to manage their data more effectively. They need a strategy that helps them organize data all the way from ingestion through analytics and reporting. Companies can only achieve this by finding a way to break down information silos. The key to this is application programming interfaces. APIs provide access to data regardless of location. Thus, enabling teams to aggregate relevant and useful information for decision-making.
Another one of the most common uses of APIs is to decrease the need for multiple handoffs across departments. When information is shared via APIs, it can reduce the number of times the customer has to interact with a business. This reduces errors and makes customer interactions more efficient through automation.
APIs also help deliver highly personalized experiences. The more data you gather on a customer’s preferences and behaviors, the more personalized the experience. For example, if customers are leaving your site to search for something elsewhere, you can use APIs to offer the same functionality. This saves customers time and gives them a seamless experience. Or, if you need to ship a product, you can identify which shipping services are available at the best rates. That way, you deliver the value your customers will appreciate.
DreamFactory: Fueling Business Transformation Through API Integration
Application Programming Interfaces are critical to transforming business operational workflows to meet corporate objectives. APIs empower companies to take advantage of emerging technology to be market leaders. Using any of these common uses of APIs allows businesses the agility needed to respond to customer demand in real-time.
API integrations are an important strategy for any company looking to improve operational efficiency, modernize legacy systems and transform the customer experience. The number of the common use of APIs is endless. Try DreamFactory for free and start building API integrations today.
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As a seasoned content moderator with a keen eye for detail and a passion for upholding the highest standards of quality and integrity in all of their work, Spencer Nguyen brings a professional yet empathetic approach to every task.