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The Why and How of APIs: Where to Start

Brian Mulloy
Jul 02, 2014

In previous posts , we discussed how and why APIs enable digital acceleration. With this understanding, the next question becomes: how does a business go about building an API strategy? Is your business seeking to connect with customers, or digitize and streamline internal business processes, or create new channels to work with partners? An understanding of the different kinds of API models, and which one is right for your business, is critical.

This understanding is aided by exploring the “digital value chain” that exists within a digital business and links enterprise data all the way through to the apps and consumers that benefit from it.

The digital value chain: from back-end to app-end

Much like a physical value chain, where a series of actions takes place to deliver a product to market, the digital value chain connects users to apps to developers to APIs (and API teams) to enterprise data and services in the backend.

The API team is like an internal “partner team,” working with an enterprise’s distributors and resellers, and managing which products are available. In the digital value chain, your distributors and resellers are developers, who build your digital presence (your “storefronts”) in the form of apps.

These developers might be within your company, work at a partner organization, or might operate independently in the outside world. Regardless of where they are innovating, developers represent a new channel, and the better their product (the app), the better the engagement with your end users.


The digital value chain

Traditionally, enterprise APIs have been associated with “exposure,” which describes the transformation of existing backend capabilities, resources, and data into APIs. But the focus of APIs in the modern enterprise has been expanded to include “consumption,” which grants developers access to those same resources so they can build and deploy apps.

Data connects the value chain end to end—in both directions. APIs don’t just enable an enterprise to expose or project data. They are no longer just the sockets through which transactions pass; they create a conduit for data to flow back to the enterprise and today are the primary tools for data collection and analysis.

The data and services made available via your APIs are consumed by your employees, your customers, or other businesses (B2E, B2C, and B2B).

An API initiative for every business problem

Several flavors of API initiative support the digital economy. To determine which is most suitable for your organization, consider whether the app developer resides within your business, within a partner’s company, or works independently (“in the wild”). The role you want developers to fill determines which of three API initiatives comes into play: internal, partner, or open.

Many successful API initiatives are done in stages. With each stage, businesses can build on previous projects, assume more risk, and invest in larger projects more easily.

In the next post, we’ll discuss internal API initiatives.

image: tableatny/Flickr


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