Due to the nature of APIs, the discussion is often of a technical nature. While this is fine for the world’s engineers and data managers, the fact is that an API has just as many business benefits as it has technical benefits. for this reason, it helps to consider an API as not only a means to an end from an applications viewpoint, but as a tool to leverage for strategic business purposes and organizational improvement.

APIs offer perhaps the strongest, clearest, and in many cases, easiest methods to leverage a wide range of offerings to increase organizational value and help businesses grow. To that end, in this piece, we’re going to discuss 8 ways that plugging into an API can help your business grow to massive new heights. Fear not – this is not going to be filled with technical jargon and low-level code instructional, but rather this discussion will be anchored in real-world examples, benefits, and measurable results.

1. APIs Open New Monetization Streams

Establishing a strong, dependable revenue stream is a chief concern for any business venture. APIs offer a direct route to new monetization streams in a variety of ways. For one, APIs can leverage authorization and authentication to control access to its functionality, and from a business point of view, this access can be associated with a charge. In other words, your high value business data can be monetized as a function within the greater API, and the charge for access can result in a direct measurable and predictable revenue stream.

This sort of monetization practice may be very granular. Free trials, limited functionality on “non-premium” endpoints, and even pay-per-module plans can be easily integrated into the functionality of your API. This makes an API extremely integratabtle and scalable per your business plan and the specific functions of your business approach.

Example

3Scale offers a management solution for monetization with a wide range of options. These options include trials, function pricing, and more, and ultimately represent a good example of monetization as driven by API implementation.


2. APIs Create New Channels for User Base Acquisition and Growth

Related to the concept of scaling in terms of revenue, an API can grant extreme growth in user base acquisition and development as well. As such, the API is essentially an artery to your business brand, function, and purpose.

An API serves as a direct conduit to your users, and presents a value adding proposition to potential customers – the direct integration with a solution is always going to be preferable to a tertiary workhorse and contact within the organization doing the requested process, and as such, the API offers a direct contact to what the consumer wants. This naturally helps attract new users.

More specifically, however, using an API allows you to control the type of consumer your data faces, as well as how they interact with it, the branding they will encounter, and the overall user experience. In this way, the API is as much as a channel for user base acquisition and growth as it is a tool for maintaining already existent userbases.

Example

ChatFuel is a great API for creating Facebook bots. While this might seem to be a very particular use case, the idea of being able to automatically respond to chat requests and invitations opens a wide range of new user channels, and ultimately makes for a much better potential customer experience.


3. APIs Help Focus on Core Values

Jumping off the idea of granular control, it should be noted that the “arterial” nature of an API works in both directions. While the API can help to create new channels for the user base to interact directly with the business resource owners, it also creates a conduit by which the business resource owner can control interaction with the user. Adopting APIs and external dependencies allows an organization to focus on their core values, and to extend these core values to the user.

As an example, assume an organization exists in which a core value of “rich media delivery” is a prime focus. By leveraging an API that not only delivers the data, but allows transformation into variable formats and creates hyperlinks to related hypermedia, the business can take their existing data and deliver on that promise as a core value. This of course would be much harder to do in a traditional media delivery system, where the user connects to a server and views or interacts with the media as is in the directory.

This is only one of the myriad ways where an API grants organizations the ability to focus on core values, but the implications should be true – this direct line to your user is a two-way road, and as such, grants a bevy of opportunities for content delivery and control.

Example

Amazon Elastic Transcoder is an AWS-centric API that allows for on the fly media encoding. This allows for a rich media experience for users, and for many organizations, represents a strong focus on a core value of rich media delivery and interaction.


4. APIs Standardize Partner Communication

Not all of the benefits of adopting an API-centric mode of communication is user-centric – in many cases, APIs can also drastically improve the interaction and relationship with partners. No two partners are going to be the same – and in a high-stakes revenue situation in which a partner needs to be properly briefed, communicated with, and tooled, these differences require a much more customizable solution.

APIs grant this in spades. B2B, or business to business, is typically very slow to adapt, largely because the systems that facilitate this interaction are designed specifically for the given use case. Iteration and adaptation therefore come very slowly, if at all, and often have increased cost associated with each step of the process. EDI, or Electronic Document Interchange, is a good method of exchanging invoices and other documents, but ultimately it does not serve the same purposes as an API.

To rectify these failures, a RESTful API can deliver high speed, extreme compatibility with various file types, and a system that is extremely malleable and scalable given the business case of the particular integration. Ultimately, the API is more like a system, and B2B is more like a “widget” – B2B is a single use case for a single purpose, whereas an API provides more holistic support.

This ultimately means that your partner to business communication is made better, but more to the point, further communication between partner to partner is facilitated. This moves your business away from a “point to point” relationship, and more towards a network of resources and partners, granting all the benefits that come with such a system.

Example

PayJinn is an invoicing and payment processing API that allows for a unified, standardized billing system for partners. This enables a process for managing partnerships and payments that is that much easier and efficient, allowing developers to spend more time working on features and less time trying to standardize the invoice process.


5. APIs Improve End User Experience

Ultimately, all of the above benefits point to a singular, general benefit that is extremely valuable. When using an API, a business can drastically improve user experience through direct controlled actions and methodologies. Adopting an API allows for a highly customizable, tailored experienced, and ultimately makes the business offering greater than the sum of its parts.

A great benefit of adopting an API is in optimization. Because an API can be implemented generally and then tailored to specific requirements, an API in this way can be optimized towards the specific case in mind. Optimizing functions on a per-user experience as opposed to creating a solution for every single user that you wish to integrate with means less code bloat, more interchangeability, and more optimized interactions.

Ultimately, adopting a properly designed API results in a greater user experience, and as such, should be conceptualized less as a business cost and more as a tool to leverage existing resources to greater heights.

Example

GraphQL logo

Though not technically an API, GraphQL is a query language that can drive such an API system which promises to improve the end user experience. By allowing users to state the specific type of data and form they want it returned in, the requests can be optimized, return routes minimized, and ultimately the user experience can be made that much better.


6. APIs Streamline Internal Operations

So far, much of the benefits that have been discussed has been user or external centric. APIs do great things in those spaces to be sure, but it should also be mentioned that one of the greatest benefits is actually in what an API can do for internal operations. Due to the fact that an API can be used to automate internal operations, the actual internal functional workflow of your organization can be heavily optimized without loss of productivity.

Essentially, an API represents a type of automation that can be granularly controlled per the conditions your business faces. Intricate operations can be done by operators or outsourced to cloud computation systems, internal mail and ticket generation can be handled by the same API which was used by the consumer to generate a complaint, and ultimately, all internal systems can be collated to a handful of functions or APIs for clarity, concise functionality, and optimized workflow.

Additionally, DevOps can be unified with your business and organizational units due to the fact that all operants are using the same system, finally easing the gulf between technical and organizational elements within your business.

Example

JIRA has a well-known and oft-used API that allows business to tie their internal ticketing and management systems into remote JIRA installations, allowing for greater leveraging of the Atlassian Connect framework. Such a framework is prime for internal management systems, and represents perhaps the best example of this type of internal API system.


7. APIs Aid in Meeting Regulatory Compliance

While the benefits for users both external and internal should be clear by now, it should also be noted that APIs are perhaps the easiest and most cost effective way to also ensure some key business elements – notably, that of regulatory compliance. Many providers are going to find themselves covered under some pretty stringent regulations, and as such, will need to find methodologies to meet them.

For instance, healthcare providers in the United States are likely to be covered under two broad regulation sets known as HIPAA and HITECH. These regulations are designed to protect the security and privacy of patients, and as such, strictly lay out specific methods and expectations for transferring data securely, establishing database security as a whole, and ultimately allowing for more effective, private health data management. While these could in theory be implemented in paper form, adopting an API allows this information to be made into electronic data, and allows providers to leverage these systems for greater efficiency and cost-effective processing.

Another example would be for businesses operating in the European Union. The EU has stringent data protection standards under the EU Data Protection Directive and its various evolutions. Accordingly, adopting a methodology for secure data transmission and storage will heavily rely on being able to propagate these standards to all elements of the business. This is much easier done via an API than it is via specific B2B iterations or developments, and as such, is not only easier, but more effective in the long run.

Example

TrueVault is a great example API for the healthcare industry. Designed specifically to operate within the stringent HIPAA regulatory body, TrueVault allows covered entities and organizations to share data in such a way as to be properly secured and managed with the regulations they are covered under in mind.


8. APIs Grant a Competitive Advantage

Ultimately, all of these considerations and benefits culminate in a single major benefit – competitive advantage. Businesses are a dime a dozen, and in this industry, it’s not what you are that sets you apart, but what you do better than others. Accordingly, ensuring that your business functions in the most cost effective manner while delivering on optimized functionality is a huge benefit.

Having a truly competitive advantage is going to entail having a premium experience at each level for each user. This includes developer experiences, user experiences, business to business experiences, and more – and each of these experiences can be optimized, made better, and ultimately delivered in a more effective manner by an API.

Example

For an example of the many businesses getting an edge in the API economy, check out our free eBook: The API Economy for detailed analysis.

Kristopher Sandoval

About Kristopher Sandoval

Kristopher is a web developer and author who writes on security and business. He has been writing articles for Nordic APIs since 2015.