Wednesday, September 27, 2023

How can your business benefit from the API economy?

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Shreya Christina
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CEO and co-founder of software development company KITRUM. Have an incredible team of skilled developers spread all over the world.

Is there a way not to lose the pace of your company’s development? Or to quickly respond to new market challenges? Or to make extra profit on existing infrastructure and data? You can do all of these things by considering a relatively new concept: the API economics and related business approaches.

ProgrammableWeb, an API economy website, currently tracks over 24,000 different APIs. Some sectors of the economy have been forced to use APIs due to regulatory requirements (e.g. healthcare and banking). In other sectors (eg telecommunications), APIs are used to ensure compatibility and efficient operation of products. There are hundreds of APIs for financial systems, social messaging, payments, e-commerce, cryptocurrencies and more. The fastest growing API segment concerns the exchange and analysis of data in various applications.

What are APIs and the API Economy?

APIs (application programming interfaces) are a standardized description of functions for use by other services. They help structure and transform the functionality of an organization’s applications into an efficient, transparent and highly scalable system of technical and business services. They enable the company to operate more efficiently, respond to market changes faster than competitors, provide a consistent customer experience across all service channels, and help transparently interact with business partners.

The API economy is an automated digital exchange of business competencies that enables organizations to integrate key services to develop and expand business cases and markets. The API economy is driven by a philosophy of integration and the rapid development of technology.

How APIs work

An API is an intermediary between applications that determines the communication rules. This is why ‘interface’, the boundary between objects, is embedded in its name. Developers use the interface to send requests and receive responses. And users are used to API functions, so they don’t need an explanation of how a familiar button works in each new program.

The developer has complete freedom in building API functions. For example, a separate set of functions may define the ability to register and login to the program. On the other hand, developers using third-party APIs save time and money by working with out-of-the-box code.

What are APIs used for?

The software interface allows developers to:

• Simplify and accelerate the release of new products by using out-of-the-box APIs for standard functions.

• Make development more secure by putting different features in a separate application, where they are hidden.

• Simplify the configuration of links between different services and programs to avoid collaborating with developers of different applications to develop your product.

• Save money by not having to develop all software solutions from scratch.

For example, before the release of Windows and other graphical operating systems, programmers had to write thousands of lines of code to create windows on a computer screen. When Microsoft released the Windows API to developers, creating windows took just a few minutes of work.

API Application areas

APIs are most commonly used in mobile applications and the IoT to automate partner interactions, build ecosystems and open platforms to access new markets, leverage analytics, and take advantage of organizations’ rich information resources.

Primarily, APIs are used to extend functionality and launch mobile services. Companies today face the challenge of delivering a complete set of standard organizational tools on mobile devices. APIs allow developers to quickly prototype and develop iteratively. Simplified APIs for mobile devices are being created, among other things, to isolate mobile application developers from the internal complexity of services.

Developers also often create APIs to connect business partners, which has traditionally been a costly process that required a lot of manual work.

Benefits of the API Economy for Business

When companies start using APIs and become part of the API economy, they receive several benefits.

• Smoother transactions and other interactions with customers.

• Real-time access to relevant data and data flow integrated between customers and partner systems.

• Improved security of automated processes.

• Faster development and integration of innovations to stay ahead of the competition.

How to start?

You don’t have to be a technology company to make money with APIs. This opportunity exists in every industry, as the need to develop API sets is driven by groundbreaking changes in business processes across the industry (retail, media, entertainment). To build an API, you need to start with a strategy that specifies the purpose of your API, the primary users, and how your business can benefit from it.

Mastering APIs will bring significant benefits to small businesses that are currently struggling to reach a digital audience as networks and online trading platforms are oversaturated with offers. APIs allow you to offer products and services on new platforms, focus on core competencies, and outsource non-core functions to third-party vendors. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?

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