For years, businesses have been experimenting with application programming interfaces (APIs). However, being strategic about APIs hasn’t always been a business mandate. Now, companies have no other choice – align your technology with business needs or forget beating the competition.
If you want to get serious about fine-tuning your company’s API ecosystem, keep reading. Today’s post focuses on the marriage of APIs and digital transformation – the union that is making API management more business-oriented than ever before.
First, the Basics
What are the Benefits of API Integration in Digital Transformation?
- Connect systems, automate tasks, and personalize experiences.
- Access features like inventory management, payment processing, and real-time recommendations.
- Drive innovation by enabling the development of new products and services, such as FinTech apps and connected devices.
- Unlock valuable data, fueling business intelligence and driving growth strategies.
How is API Integration Achieved?
There are two different forms of APIs that organizations use:
- Customized solutions – These are tailor-made APIs designed to cater to specialized needs. This approach offers greater control and flexibility but comes with a higher cost and longer implementation time.
- Out-of-the-box solutions – These are pre-built APIs that are native to a software package, such as an ERP system. These are faster and less expensive for companies to deploy compared to custom APIs. The downside, of course, is the limited customization options.
The type of API integration a company needs hinges on its unique needs and IT capabilities. Custom API integrations require coding, so developers are essential. On the other hand, native API integrations are already coded within a larger enterprise system, such as an ERP, CRM, or SCM system.
Our ERP consultants have seen companies benefit from both approaches, usually a combination of the two.
2024 Clash of the Titans
SAP, Oracle, Microsoft, and Infor each have a variety of systems that can support data-driven decision making. We surveyed customers of these four vendors to find out what their selection and implementation process was like.
The Complex World of API Gateways
Over the years, companies have been rapidly implementing a litany of APIs.
Unfortunately, reliance on numerous gateways to manage a growing number of applications can introduce security challenges and performance issues. A single API gateway can contain thousands of different assets. Even if it’s technically operable for the time being, it might not remain that way as the company grows and changes.
Essentially, when it comes to company growth, traditional API management platforms are unable to keep up.
To develop a modern API strategy, companies must consider their overarching digital transformation strategy. In other words, they must align their technology decisions with their business priorities.
Technical Decisions in a Business Context
One of the technical (though really business) questions leaders should be asking is, “Do we need one consolidated platform that does it all or a connected framework of different technologies?”
Companies each have their own API priorities and needs, and these requirements will change as the business matures. Thus, they need tooling that not only meets their current needs but also sets them up for future success.
While consolidated, end-to-end platforms might offer a degree of user convenience, they often fall short in terms of flexibility and scalability.
However, integrating various tools and technologies isn’t all sunshine and roses, either. Compatibility and integration issues are no laughing matter.
In the end, companies should make a decision that aligns with their digital transformation goals.
APIs and Digital Transformation: What’s Your Strategy?
Increasingly, executives are realizing the business importance of APIs. Instead of delegating technology decisions to the IT department, they’re actively influencing their organization’s API strategy.
In turn, they are minimizing risk and maximizing business value.
Our enterprise software consultants can help you get all your stakeholders on the same page when it comes to APIs and digital transformation. Contact us below for a free consultation.
