API programs are quickly becoming a new avenue of growth for enterprises of all sizes and domains. Many industry standards are based entirely on APIs. For example, open banking APIs are standard in the field of banking and finance, GSMA One API does the same in Telecom, and so on. The benefits of having APIs are quite well known; however, one needs to plan meticulously before diving into the world of web services and APIs. Many enterprises attempt an API-centric approach, yet only a few succeed.

An API-first approach not only involves technical changes; it sometimes requires a significant cultural shift, especially for a big enterprise. Large companies are accustomed to working as per a certain model and structure, which might be completely opposite to the one required for an API-based approach.

This makes it imperative for the stakeholders to spend a good amount of time churning out a proper strategy when deciding to implement an API program or set up an API ecosystem. From a business point of view, below are few things to consider while designing and implementing an effective API strategy.

1. Lack of API Motivation

Like with most other business initiatives, a good starting point for an API strategy is figuring out what you want to achieve. Whether it is increased revenue, a broader partner base, or a competitive advantage, you should figure out the end goal before you embark on an API strategy.

This first step will help dictate what you will enable with APIs, how you will achieve it, and how you will market it. It is crucial to outline the vision for your API program and prepare a roadmap for it. So, spend ample time answering this question and ensure you have clear project motivations. If the motivation is not there for the right reasons, results can be disastrous.

2. Incorrect ROI Expectations

Most business initiatives are measured by their impact on the bottom line; an API program is no exception. If any business is going to implement an API strategy, it should expect a decent Return on Investment (ROI). Since the direct consumers for your API will be app developers, you must devise your marketing strategy around them.

Many businesses fail to plan how they will monetize their APIs or how they will handle developer payouts. In this case, ROI should not only be measured in terms of money but also the non-tangible aspects like branding, thought leadership, and customer mindset. For example, ROI for an Over the Top (OTT) service provider is calculated by the monetization of its APIs, but for a large corporation, it is usually calculated by the developer engagement with its APIs. Many times businesses ignore such things when they plan their API strategy.

3. Not Listening to Developer Community Feedback

Developer onboarding is critical to the overall strategy of an API business. App developers are direct consumers of your APIs. Thus, your API program’s success mainly depends on how easily developers integrate with your API. Before launching a full-fledged API program, its advisable to expose alpha or beta versions to a selected set of developers to acquire feedback. Having this feedback can help you better plan your API rollout. Also, it’s a good strategy to prioritize APIs that you expect to receive more traffic, as it means you get more feedback, fix any issues quickly, and plan for enhancements accordingly.

4. Mistakes Estimating Traffic

When a business plans its API strategy, stakeholders must build a sturdy infrastructure to handle the load of live traffic. Sometimes companies ignore this aspect, which results in service disruptions, loss of data, revenue, and, most importantly, the loss of goodwill of end-users. An unplanned API can turn a bright future into a nightmare. Remember: nothing kills a poorly implemented API faster than good marketing.

Whether you go with a cloud service provider or have your own on-premises data centers, you need to have projections ready for traffic estimated well in advance and plan for infrastructure to support it.

5. Ignoring Security and Performance Challenges

When a business launches its API program, it’s effectively exposing data to the outer world. Due to the risks involved, some companies have stringent security protocols and checks in place. While often necessary, strict security checks might have an adverse effect on the API developer experience because of the lack of seamless integration. Also, additional security-related layers can result in delayed responses from APIs, which will eventually degrade performance.

This is a very slippery slope. Companies must balance a rigorous security mindset with developer experience. To do so, the business must plan appropriately for such scenarios in advance while opting to implement its API program.

Good API Strategy = Digital Transformation Roadmap

At times, a small company significantly increases in size due to a quality API strategy. Take Twilio, Sendgrid, or Salesforce, for example. Big corporate giants like Barclays, HSBC, or Vodafone have also moved to an API-based approach to power their digital initiatives.

Regardless of the size of these companies or the domain in which they operate, they all have one thing in common: a good API strategy. Defining a good API strategy prepares a roadmap for digital transformation. It helps reach a vision and define various milestones along the digital journey. Eventually, when an enterprise implements the API program, the above benchmarks are used to measure its success.

I have helped large enterprises build scalable APIs for a long time. In my experience, an API program’s success depends largely on lining up your expectations and planning to meet them through an API strategy. The importance of a good API strategy cannot be overstated. The more time you spend devising a strategy, the more your chances of having a successful API program will increase. Remember: well begun is half done.