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Yes, it seems like a very technical subject best left in the hands of your IT department.

But just as the web and mobile jumped quickly from sideshow to center stage in sales and marketing, how good your APIs are will ultimately have a significant impact on your bottom line – and potentially, the future of your business.

Here’s what you need to know about them.

What exactly am I trying to solve?

By now, you’re probably well aware of the market forces and trends leading every industry into an era of disruptive digital selling. Emerging products and services are exerting tremendous pressure on companies to innovate, differentiate, and extend the reach of their offerings – whether functionally, demographically, or geographically. At the same time, aggressive competition is driving down margins, while rapidly changing consumer attitudes, preferences and behaviors create a moving target for marketers and product strategists.

To succeed in this environment, any digital selling that your enterprise undertakes must obviously be frictionless, relevant, and pervasive to consumers. But on your end, it must also be fast, scalable, and cheap. Cheap to try, cheap to deploy, and cheap to shut down if specific projects fail (and they will).

This is where API technology excels.

How do APIs solve these challenges?

In theory, a good set of APIs transforms your big, old-fashioned ecommerce platform into a sleek engine that delivers commerce-as-a-service. This means that all of the advanced capabilities you’ve come to rely on – promotions, personalization, offer management, shopping carts, and so on – are no longer locked away within a single platform, but instead are available for use by any application or developer.

In this perfect world, if you can imagine or build a customer experience, you can quickly loop it into your existing ecommerce, business intelligence, and CRM systems by calling on APIs instead of hacking away at the underlying software.

A great API allows you adapt quickly and cheaply to a shifting market, but in a scalable and sustainable way, rather than constantly making difficult and expensive changes to enterprise software. This magical ecosystem looks something like this:

The promise of APIs

Aren’t my IT guys taking care of it?

Unfortunately, this is where the promise of APIs crashes headlong into their present reality.

If you put yourself in the shoes of most enterprise IT or commerce platform technologists, their number one priority is not to build out this magical ecosystem for your business, but simply to ensure that the underlying functionality they own is exposed for use by third parties. This may be a subtle distinction, but it’s the difference between a good API that gets the job done, and a great one that works like a superpower.

Many existing APIs do a terrible job at making it easy for other applications to actually access business functions. Some are good. Almost none are great. When left in the hands of IT, the typical API ecosystem ends up looking something like this:

The reality of APIs

It’s a bottom-up view of APIs from the perspective of the code, rather than a top-down one where the potential applications are king. Where underlying functionality is merely exposed, creating a viable customer experience out of those functional pieces requires serious time, money, skill, and deep, in-depth knowledge of the software that hosts those capabilities.

This defeats the purpose of having an API in the first place, and does little to alleviate the time, effort, or cost needed to conduct disruptive commerce.

Compare the promise with the reality. The only difference between the two is in the quality of the commerce API, and how easily independent developers can create products and services from your core capabilities. This is how API technology can either make or break your entire business strategy.   

How can I make this happen?

Independent API evangelist Kin Lane has seen first-hand how API programs at major companies have resulted in both spectacular successes and failures. He stresses that the creation of an API strategy must be a coordinated effort between business stakeholders and technologists, because API technology decisions have moved beyond the IT sphere to affect the very ability of an enterprise to respond effectively to the market. If you’d like to learn more about this, check out my recent conversation with him in Business Challenges Solved by APIs.

Just like with ecommerce and mobile that came before, business executives can no longer consider APIs to be a sideshow best left to IT. They must get involved in understanding, making decisions, and ultimately owning what will be the next big chapter in digital commerce and marketing. 

David Chiu

Published 8 June, 2012 by David Chiu

David Chiu is the digital commerce strategist at Elastic Path and a contributor to Econsultancy.

4 more posts from this author

Comments (5)

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Steven Willmott

Great post and a good summary of much of the current state of the art. It's indeed challenging because a technical function is increasingly coming up against a strong business need.

We recently put together a presentation on the types of business models being applied which might be helpful (http://www.slideshare.net/3scale/the-api-economy-api-provider-perspective-european-identity-summit-2012), and often having a clear set of objectives for the audience and objectives of the API has a significant impact on the final technical setup.

about 4 years ago

Lee Cash

Lee Cash, Senior Business Development Manager at Qubit

Hi David
Thanks for the article. This is very much chicken and egg of course but you can't win the lottery if you don't at least buy a ticket!
We (FusePump) saw similar challenges in terms of product feed adoption a couple of years ago. These days product feeds are powering a significant number of eCommerce partnerships and marketing applications and the proof that customers need to invest in feeds is clearly visible.
I'm sure the same will be seen with APIs in the next few years.
Lee

about 4 years ago

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Colorfull beach shadow

The weight of the frame is often the quickest way to determine the strength of the gazebo. Although not always the case, usually the heavier the gazebo,

about 4 years ago

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Steven Schwartz

Great article. One major message is that business needs more input into API design. Your customers are part of that business: they can help you design your API for more usage (and more sales!). How do you engage them in doing so effectively?

over 3 years ago

Dmitry Sotnikov

Dmitry Sotnikov, VP, Cloud at WSO2

It is obviously not either/or situation. IT provides the underlying technology, and business is in charge of the API representation. API should be treated as a product, and a Product Manager - who is both technically strong (the "buyer" is technical after all!) is managing the API front end (including not just the cloud gateway, but also documentation, forums, subscriber management, and so on).

Luckily services (like WSO2 API Cloud: http://wso2.com/cloud/api-cloud/ - for which I work) make it easier to separate the roles, and equip the API owner with the tools for the API representation and management, while letting the engineers run the backend web service.

almost 2 years ago

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