How an API Can Help Your Business Grow

API technology has been evolving for over a decade now. And while the technology has been advancing, its implementation has been getting simpler. API technology has left the technical domain and is now being used by businesses to expand the capabilities of the products and services they offer. And at the back end, they are being used to make operational improvements. 

What Is an API?

API stands for Application Programming Interface. You have all used user interfaces, which enable communication between a human and software.  Similarly, an Application Programming Interface allows applications to communicate with one another. 

They do this by exchanging data and messages. APIs offer a set of functions to another application in the form of an abstraction layer.  Applications can use this to access and exchange data without either application affecting each other’s core functions directly. 

Let’s say you got into your new car and decided to drive to the beach where your friend is waiting for you. You see your friend’s exact location on your instant messaging app and decide to map a route.  You know it takes you about 2 hours to get there, but the navigation guidance tells you that it is going to take 3. 

How and why is it telling you that? You see, your instant messaging app sent a request to a mapping service, which in turn sent a request to a weather app to see how fast you could drive there. 

In the scenario above, we used Tomorrow.io’s API integration to MapBox to give you an example. These were both backend services. Snapchat sends data to MapBox, which sends instructions and a data request to Tomorrow.io.  Tomorrow.io looks at all the route points, computes the weather forecast during the drive time, and gives its predictions. 

Finally, it sends all the data and its instructions back to MapBox, which devises the route and calculates the delays. Most of the information exchange and data processing happened between MapBox and Tomorrow.io. Snapchat is the display interface with the end-user.

How Do They Benefit Business?

Connecting Various Parts of the Business Services

Customers today like to have seamless experiences. It is now easier than ever for customers to jump services. Every department in an organization is now driven by enterprise apps like CRMs, ERPs, marketing, and finance platforms. It is only with APIs that these different parts of the business can now talk to each other. 

It is a mission-critical capability in a post-pandemic world where many employees are working remotely. If this collaboration is missing, the organization will seem outdated and will lose out to the competition. 

Gives Customers the Best Experience Possible

Customer experience is one of the key factors in customer attrition. Having a good product isn’t good enough anymore. According to Salesforce, 57% of customers gave their business away to a rival company because of a bad customer experience. 

A typical organization deals with thousands of customers at any given time. Since every customer’s need is always unique to a certain extent, it is impossible to give them the perfect service always. APIs allow the customer to pick and choose their own experience by letting them customize their usage. At the same time, it lets your organization monitor a customer’s API behavior to identify gaps in the product offering. 

A Key to Digital Transformation

Every single industry is now going through a digital transformation process. It is a system where all interactions and record-keeping are digitized. The key motivator behind this is data and application economics. Using APIs allow companies to envision new business models and create products that can be made at a fraction of the cost. 

The pandemic has acted as an accelerator for this transformation. Instead of building capabilities ground up, plug-and-play has now become the norm. It allows all tech-enabled companies to quickly reach customers who now need to interact with businesses remotely. 

A Source of Revenue

While the use of API will allow harvesting useful data from your users, the data and information that you have are of use to others. Implementing an API strategy can generate revenue for your organization as well. A Mulesoft survey revealed that more than $5 million a year in revenue is generated by large companies from APIs alone. 

Offering isolated standalone products and using standalone services are now a thing of the past.  APIs need to be embraced as a strategy that will drive customer as well as revenue growth.