To access the complete report, click here.
Digital Strategies with APIs
Sensedia and PwC (PricewaterhouseCoopers) jointly conducted the 2nd Report about Strategies with APIs. A total of 37 questions were asked to indicate how the APIs are used in the strategies of 130 major companies, identifying their projects maturity level and the impact of these practices on digital business of different segments. Below, we highlighted some of the main points at the report.
The world of APIs has been hectic
Last year, the new technologies, strategies, rules and customer expectations boosted companies to digital and “Open” models, where APIs performed an essential role.
During the year it got clear that APIs aren’t only a technology issue. Being able to integrate systems, devices, companies and developers – and enabling these integration monitoring and monetization – APIs are also key enablers to new business and innovation.
Besides that, the versatility on APIs allows rethinking the IT environment from new architecture approaches, such as microservices, service mesh and event-driven, bringing agility and flexibility demanded by the digital transformation process.
The API central role implies close attention, including business strategies related to APIs, with the developer experience, the governance process, data security, scalability, and other fundamental aspects.
To guarantee that those considerations are addressed, new functional roles have emerged, such as API Product Manager; the one responsible to manage the business value, monitor the KPIs, improve the business and marketing strategy, ensure the roadmap implementation, improve the experience and the API value.
At companies with more advanced strategies and with more APIs, we have seen emerging the “API platform team”, a team composed by API Product Managers from different business units, responsible for directing the macro strategy with the API portfolio, sustain the governance and certify that best practices are applied.
Sectors starting adoption and gaining scale
There are sectors in which the use of the APIs is more mature and has been gaining scale, as in companies of the Financial sector, ICTs and Ecommerces. For this maturity assessment to the API program in these sectors, we consider 4 main dimensions: Technology, Process, Strategy and API Adoption time.
– Banking, Finance and Payments
In the case of the financial sector, we saw regulations being developed and implemented this year, such as PSD2 encouraging the use of APIs. In addition to these regulations, the possibility of collaboration (and not only competition) is added through APIs with fintechs, which strengthens the trend on providing APIs for the application of Banking-as-a-Service and Open Banking models.
Among the companies surveyed, the financial sector is the most mature in its API programs, using more advanced technologies, well-defined processes and bolder strategies.
Looking more specifically at the Insurance segment, we have identified that the main motivation for implementing APIs has been the search for agility and innovation, integrating legacy systems with disruptive technologies (mainly AI + Analytics, Mobile and IoT), composing services with partners, with large clients and brokers, expanding channels and pilots for new products (on-demand insurance, microinsurance, etc).
– ICTs (Software, IT and Telecom)
On the other hand, ICTs companies are realizing that competition is no longer between products, but among ecosystems, and are seeking to use APIs to integrate with existing ecosystems or develop their own one, as well as enrich their product features and compose new ones (apps, platforms, data products, api-as-products, etc.).
According to the answers received, although this sector has been working with APIs longer, most companies are looking to develop their solutions internally, which requires more time to reach more mature stages with their APIs programs.
– E-commerce and Retail
For e-commerces and retailers, the primary concern is to use the APIs to reach new channels, expand revenue streams, integrate with marketplaces, or position themselves as marketplaces, and speed up partner onboard. In addition, companies in this sector have been preparing themselves to make an omnichannel journey and are looking for new ways to enhance their customers’ experience.
Other sectors starting to adopt APIs
Beside the aformentioned segments, there are other ones being highly affected by the “Digital Transformation” imperative and it is starting to adopt APIs in its businesses, segments such as Health, Education and Transportation – especially aiming to develop better Digital Experiences to its customers and opportunities from integrating with partners.
Benefits that companies expect to get from their APIs
In 2018 and 2019, the main benefit expected from the APIs was not only to integrate and speed up internal processes (about 50%), but to expand the supply of value of products and services (large: 57%, average 80%), start an ecosystem or increase the number of integrated partners (approximately 60%) and foster innovation (large: 57%, medium: 45%).
These data reinforce the importance of APIs, not only as a technology issue but as key enablers for new digital business and innovation. Nevertheless, the direct generation of revenue is little explored (large: 29%, medium: 40%).
APIs use Cases
The main use case is integrations with partners and customers (77%), indicating a trend to expose the APIs externally and the importance of thinking about the business ecosystem. This result was different from what we saw in 2017, which pointed as the main case of APIs usage for internal integrations (79%).
Areas that most require the creation of APIs
Although the IT area is the area that most requires the creation of APIs (87%), the participation of the business areas has increased, mainly Digital Channels areas, marketing & sales, innovation and operations.
Developer Engagement (internal/external)
To encourage engagement in the use of APIs, the main tool is the Dev Portal (55%). However, 32% of companies are not making any effort to engage developers around their APIs.
Fostering the engagement of API users is essential. It is not good enough to create an API if no one wants to use it or doesn’t even know it exists. It is critical to encourage easier understanding of APIs and to think about the pros and cons of using it to maximize value, collect feedback, and improve the developer experience.
When choosing an API to consume, it is essential that it meets performance requirements, serveyed mentioned the following as the most important ones: Performance / Availability: (73%), ease of use (63%) and security (61%).
APIs Program Expansion
76% of the companies surveyed intend to increase investments in APIs. 95% of respondents said that the number of APIs in production has increased and 54% of respondents are already having multiple APIs in production and creating a more consistent roadmap.
This expansion in API programs is reflected in Sensedia’s customers. Analyzing the annual volume of calls of the Sensedia API Platform, we identified a growth of 4x in 3 years in the volume of calls.
Important Elements and Barriers in Implementing APIs
Security is considered the most important item (95 points) in API implementation, followed by scalability (91 points) and business insights with (89 points).
However, the main barrier is the technical maturity of the teams, mentioned in 52% of the answers.
An interesting point is that lack of budget (7%) and lack of support from superiors (5%) were little mentioned, indicating that company leaders are supporting the implementation of APIs in their business.
The API time-to-market accelerated. In 2018 and 2019, 49% of respondents said the APIs’ time-to-market was around days or weeks, down from 37% in 2017.
On the other hand, focusing only on launching quickly, but in a disrupted way, does not fuel the metrics that really matter: time-to-value.
The blind speed and no direction to launch causes delays and losses due to re-jobs, poor results and misalignment with the business strategy. The most important speed is about generating the expected value for the business.
Successful APIs will be the ones that will best meet the company’s strategy. In a world where all companies are or will be digital businesses, IT involvement with Product and Channel areas becomes a must-have in strategy and operation design.
Most of the companies surveyed use a complete API Management platform (63%), mainly with Cloud deployment and with modules such as API Gateway, Analytics, Dev Portal, API Design, Security, Governance, among other resources.
Trends in APIs for 2019
The hottest topics involving APIs in 2019 are the Serverless, Mesh and Event-driven, GraphQL, Security and Governance APIs, APIs (in Banking, Health, Insurance, Telecommunications) and APIs as Business and Innovation.
Do you wanna check the complete report? Click here.