The benefits of APIs are becoming more clear in an ever-evolving tech landscape, yet ITDMs still struggle to convince executives and investors to buy into an API-first strategy. Here’s a look at the importance of APIs in a changing world, and how ITDMs can make the business case in order to secure the best API strategy for their organization.

According to Google Cloud’s new “State of the API Economy 2021” report, a majority of IT decision-makers view application programming interfaces, or APIs, as essential ingredients in improved customers experiences, expanded partner engagement, accelerated innovation, and other demands of today’s business environment. This is encouraging: APIs are how software talks to other software, and since much of digital transformation involves combining disparate data and functionality into rich user experiences and process automations, APIs are an essential ingredient in modern business strategies. 

What’s less encouraging: the research surveys primarily IT professionals, not business leaders. It’s clear that IT people see the benefits of APIs in the ever-changing tech landscape, but we still hear regular concerns from these same people that they have trouble convincing executives and investors to buy into an API-first strategy. In this article, we’ll look into why they are having these difficulties and some proven ways to successfully position an API strategy not just as a technological solution, but also as a business requirement.

The importance of APIs in a changing world

The rise of APIs has been heavily influenced by the introduction of disruptive new business models and evolving customer preferences that traditional technologies are not positioned to quickly and efficiently address. 

For example, traditionally, if your business sold tickets to events, it would build physical ticket booths and maybe a website or first-party mobile app. Today, tickets in many cases aren’t so much a physical thing presented to an usher as a digital code that an usher scans. Likewise, tickets are less-often purchased in person as opposed to online, and reliance on a first-party website can be unnecessarily restrictive. It places the burden on the business to attract customers, whereas surfacing organically in social media, search engine results, and other digital experiences lets the business meet customers where they’re already assembled. 

Moreover, as COVID-19 continues to disrupt events throughout the world, many ticket sellers—and most organizations, for that matter—have pivoted to digital-first business interactions as a matter of necessity. All of these changes in the business model, and all of the interacting systems and functionality that underpin them, rely on communication among APIs. 

Similarly, today’s banks cannot grow by simply building more branches or hiring more tellers. Instead, they need to make financial information and functionality available when and where customers require it, whether that means via an ATM, a first-party app, or within some other digital experience. Many banks also need to do more than just present this functionality, as customers are increasingly interested in the analytics and insights their spending patterns can yield. Again, all of these interactions—from customers making a purchase within an app to banks applying machine learning in order to offer customers financial insights—are enabled by APIs.     

Related: The “State of API Economy 2021” report describes how digital transformation initiatives evolved throughout 2020, as well as where they’re headed in the years to come. Download for free.

When guidance meets resistance

These examples do not illustrate technology that updates the status quo, but rather technology that unlocks business opportunities that transcend the status quo—and that help businesses to thrive even as the status quo fades into irrelevance and obsolescence. APIs are thus not just an IT topic but also important business enablers that should be understood by everyone involved with the enterprise’s investments, from internal stakeholders approving business strategies to external shareholders trying to assess an organization’s trajectory. 

The challenge for investor relations is to convey these financial and operational benefits in a way that clearly communicates the need for a new business model rather than refinements to the existing models. It’s essential that IT professionals understand APIs, but it’s also essential for business leaders to understand them too.

This is even trickier given that arguments for API investments are often based on future potential, while arguments for more conservative alternatives are based on past success. 

At a high level, the API value proposition is clear: In the past, valuable functionality and data have been encased in systems and applications, making them difficult to scale or leverage for new, evolving use cases. In contrast, APIs make functionality and data infinitely reusable, infinitely scalable, and modular such that APIs can easily be combined for new uses. All of this accrues to richer user experiences and more flexibility than ever for companies to monetize their digital assets, share them with partners, or combine them with assets from third parties. 

It’s essential that IT professionals understand APIs, but it’s also essential for business leaders to understand them too.

But investors typically want as much information as possible because their decisions can affect not just productivity and output, but company stock prices and potential future growth. High-level arguments may not be persuasive. The deeper assurances investors crave would normally come from guidance.

Guidance in this context refers to insights based on growth forecasts and customer adoption, but this can be difficult early in market entry. Robust forecasting processes need to be developed to demonstrate the efficacy and value of the API economy, which can be hard to predict: whereas APIs are well understood in some sectors, and especially among digital natives, they are in the early stages of the growth rate in other verticals, making it challenging to forecast developer adoption of a given API. And since there is a shortage of information, trying to use traditional guidance comes with a risk of being wrong and thus of little value to investors.

Related: Set your 2021 API resolutions with these top 2020 posts.

How to deliver a more useful value proposition

While guidance may be premature during the early stages of market entry, investor relations teams still need to convey the full value of an enterprise to investors. To do this, they need a value proposition that emphasizes the intrinsic value of the investment while reinforcing the benefits that can best drive business and stock growth. Considering how large an investment of time, effort, and money transitioning to an API economy can be, it is vital to convey that the benefits are substantial.

A solid value proposition should demonstrate maximum returns, and while this shouldn’t include far-fetched or unobtainable claims, it can include reasonable aspirational visions alongside statistical insights. To craft these aspirational narratives, investor relations teams should look to their organization’s existing business needs and challenges, and then demonstrate how APIs can benefit the organization in these areas. Here are some options that speak to a number of common business requirements:

• Sales channel: API investments are reusable, improve speed to market, enable automated processes and partner onboarding, and can uncover unanticipated opportunities.
• Cost: Businesses can reduce operational costs by using and reusing APIs for innovation and business development, and by using the services native to your partner’s digital surface, you can further reduce innovation costs and risks.
• Earnings: API-enabled digital ecosystems unlock a variety of partner services that leverage the business’s shared data to drive new customer acquisition, new market positions, new transaction volumes, and direct API monetization.
• Risk mitigation: By investing in a credible API, businesses can mitigate downside risks that traditional enterprises can face from market disruptors, industry-wide shifts to digital tools, and inabilities to ingest and analyze growing data sources.
• Intellectual property: Unlike project-driven innovation and customized, point-to-point integration that traps enterprise knowledge in small teams and divisional silos, APIs are reusable and modular, breaking down silos and encouraging intra-organizational collaboration.
• Speed to market: The efficient, repeatable API interface informs improvements to the fulfillment process with consistent access to data from across the organization, which drives solutions that more quickly and efficiently meet customer needs.
• Ethics: APIs offer the flexibility and economical advantages that give organizations the capacity to focus on their brand’s ethical “reason for being” beyond profitability by serving economically marginal and underserved market segments.
• Customer credibility: Organizations can deliver the extended, connected digital experiences that customers expect with the tools and flexibility included with API products.
• Employee retention: Businesses can avoid losing key employees by updating their legacy technologies with APIs, giving employees the opportunity to enhance their skills with modern technologies.
• Corporate strategy: Enterprises that use APIs’ reusable, modular structure and tools are more capable of adapting to rapid structural shifts in customer demand patterns and sectoral changes in the economy.

Whichever of these business challenges a team speaks to, it is imperative that they demonstrate the benefits of APIs, and that once they’ve determined the angle they intend to use, they keep their message consistent. While we’ve seen a number of viable ways to position APIs as a winning strategy, switching among them could make the presentation—and APIs in general—seem insubstantial and unreliable. 

This is why it’s key to decide on the most relevant business concerns, and once you’ve tailored your presentation, to make sure that you have message alignment, including buy-in and support from C-level executives. With a strong pitch built around solving existing business concerns and solidarity from relevant stakeholders, you can go into your investor meeting with the confidence to secure the best API strategy for your organization.

Strengthen your pitch with additional insights. Here are five key trends in 2021 for API-first digital transformation.

About the Author: Paul Rohan is a researcher on Open Banking and a Google Cloud solutions consultant. Paul works with banking C-Suites that are examining the impact of the Platform Economy and Digital Ecosystems on financial services industry growth, market structures and governance. Paul is the author of “PSD2 in Plain English” and “Open Banking Strategy Formation”.

According to a recent Accenture report, large businesses deploy an average of 500 different applications. This trend shows no signs of slowing down, with the majority of respondents signaling plans to acquire even more applications. No surprise, all these applications present a number of integration challenges, which the impending wave of generative AI in software development only promises to further intensify.

Two years ago, we introduced Apigee Integration as an add-on capability to Apigee API Management. From conversations with customers, it’s become clear that you want to access these capabilities directly from the Google Cloud console. Today, we’re announcing the general availability of Application Integration, a standalone Integration Platform as a Service (IPaaS) designed to help you connect your applications visually, with no code. Best of all, you can now get started with Application Integration with no upfront financial commitment, even if you’re not an existing Apigee customer. 

What is Application Integration?

As a cloud-native product, Application Integration helps you automate business processes by connecting any application — both home-grown and third-party SaaS — with simple point-and-click configurations, so you can quickly and easily construct, maintain, and scale your integrations. Application Integration offers the following features:

Visual integration designer: An Intuitive drag-and-drop interface allows anyone to build workflows with no complex coding or manual processes. With the visual integration designer, anyone can simply drag-and-drop individual control elements (such as edges, forks, and joins) to build custom integration patterns of any complexity.

Plug-and-play connectors: A library of 75+ pre-built connectors makes it easy to connect to a number of Google Cloud services (e.g., BigQuery, Pub/Sub) and many third-party applications, including Salesforce, MongoDB, and NetSuite. 

Automated triggers and transformations: With built-in triggers, you can execute integrations on an API call, Cloud Pub/Sub event, Salesforce events, or using Cloud Scheduler. An intuitive data mapping editor and comprehensive mapping functions enable you to address complex data transformation requirements in no time.

Unified platform: Whether you’re building APIs in Apigee, ingesting data using Pub/Sub, receiving events from Cloud Storage using EventArc, or something else, Application Integration works seamlessly with other integration services to provide comprehensive capabilities for your use case. 

Customer praise for Application Integration

In the enterprise, different teams adopt applications to support a task in their business processes. However, the need for information exchange among these teams can spawn complex integrations that require a lot of arduous planning.

Application Integration abstracts these development complexities, so customers  can focus on building value. OVO Energy uses Application Integration to automate communications in their critical business processes. “We were looking for an integration solution that was very low-code yet configurable, robust, and scalable,” said Chris Parker, Product Manager at OVO Energy. “We needed a simple solution that allowed us to get data from multiple parts of the company, supplement an existing data point with relevant information and funnel it to the Salesforce Marketing Cloud,” added Graham Vosper, Technology lead at OVO Energy.

But changes in business processes are inevitable, forcing continuous shifts to existing integrations – sometimes even rendering them obsolete. “Using Application Integration was very simple. With just a couple of clicks, our team quickly adapted to this new product and became productive,” said Graham.

A growing library of connectors in Application Integration makes it easy to connect to new applications and ensures any changes in connecting to the end application is automatically supported. OVO Energy has taken notice. “Configurability and traceability in Application Integration allows our developers to build and maintain our integrations without in-depth skills. We now have much better visibility into our information flow and failure rates,” said Graham. 

Get started today

Today’s integration problems require a comprehensive approach that spans applications, systems, and data. Application Integration is part of Google Cloud’s Integration Services portfolio, designed to address your end-to-end integration needs. The portfolio covers a wide range of use cases like data integration, API Management, and event-driven architectures. You can get started with Application Integration with no financial commitment by using the free tier. Learn more, explore a sample e-commerce integration, or jumpstart your development with quickstart tutorials.

Founded in 2015, Rapido operates a mobile app-based two-wheeler taxi service across more than 40 cities in India. More than 100,000 drivers provide Rapido two-wheeler taxi services, while more than 400,000 current or prospective drivers have downloaded the company’s app. Consumers have downloaded the app more than 5 million times, and the business receives about 5 million orders per month for taxi services.

“If a consumer wants to travel from point A to point B, they simply open up the app on their smartphone, select pickup and dropoff locations, and tap ‘request,'” explains Rishikesh SR, Co-Founder, Rapido. “We can track that request to the nearest available two-wheeler taxi and allocate the job to the right driver.”

Google a compelling opportunity

The business started operations on a cloud service. However, Google presented a compelling opportunity to Rapido to improve its location-based intelligence through a wide range of cloud-based map APIs, infrastructure, and mobile app development services. “Google Maps Platform was particularly interesting to our business and we saw enormous potential to use it to improve our service and gain a competitive edge,” says Rishikesh.

Rapido elected to use Geocoding API to enable its app to convert addresses to geographic coordinates, and the reverse, allowing consumers to identify point A and point B on their journey. The company also uses Directions API to identify the fastest route between pickup and dropoff locations, which enables Rapido to provide users with approximate prices for trips. Distance Matrix API is used to calculate the travel times and distances between locations, and Maps SDKs for Android and iOS to add interactive maps to the app.

Google Cloud Results

• Enables the business to optimize use of Maps Platform APIs
• Takes 5 million orders per month
• Establishes a robust platform for expansion

“Google Maps Platform is particularly useful for us as it identifies optimum routes for two-wheel services,” says Rishikesh. “This saves us time and money, while helping us deliver a better consumer experience.”

In addition, Rapido uses the Snap to Roads service to deliver best-fit geometry for sets of GPS coordinates within the Roads API, which identifies and provides metadata about the roads on which drivers travel. “Snap to Roads in Roads API allows us to optimize the path drivers take and helps ensure the fare charged is accurate,” says Rishikesh.

Improving user experiences

As Rapido matured, Rishikesh considered how to improve the user experience of the app while reducing the business’ costs. In 2017, Rapido asked Google Cloud Premier Partner and Google Maps Platform Partner Searce to help meet these objectives. Searce provided the technical and business advice that prompted Rapido to take advantage of the unlimited API calls, 24-hours-a-day, 7-days-a-week support, and strict SLAs available through the Google Maps APIs Premium Plan for Asset Tracking.

Searce also helped Rapido optimize its API calls and integrate directions and distance calls with the Roads API to smooth out variations in GPS readings received from the handsets of two-wheeler taxi owners. Finally, Searce helped Rapido deploy the Firebase mobile and web development platform to automate the mode configuration of the API keys, rather than maintain a time-consuming manual process. This move also minimized the likelihood of any issues arising if Rapido decided to start multiple projects or add more licenses, or combine Google Maps APIs Premium Plan for Asset Tracking with an external license.

Technical skill and experience

Searce finalized its initial engagement with Rapido last year and provides ongoing support and advice. “Searce’s technical skill with Google Maps Platform put us on the right path to provide a better, more relevant user experience,” says Rishikesh.

Rapido also now uses a range of Firebase services for app development, testing, and modification. The business employs Google Analytics for Firebase to measure customer use of and engagement with its app, enabling the business to make informed decisions about where to direct its resources. In addition, the business is using the Firebase Test Lab app-testing infrastructure to test its Android and iOS apps across a range of device configurations, view the outcomes, and make changes as needed.

Rapido uses Firebase Remote Config to change the app’s behavior and appearance on the fly in response to the results of A/B testing across sections of its user base. Furthermore, Rapido uses Firebase Crashlytics to provide app crash reports to its Firebase console.

Firebase Dynamic Links allows Rapido to direct users to linked content in the iOS or Android version of the app, while Firebase Cloud Messaging enables Rapido to deliver notifications and other messages to users. Cloud Firestore provides a NoSQL cloud database to store and sync data for the Rapido app.

Rapido has also started using the Firebase Realtime Database to store and sync information about customers that can be used to provide a more informed, personalized service.

At the same time, Rapido uses a BigQuery data warehouse to process about 10TB of data every month for analysis and reporting that supports decision-making across the business. The organization is also using application containerization through Google Kubernetes Engine on Google Cloud Platform.

“We are moving our apps from dedicated virtual machines to a scalable containerized environment that consumes fewer resources,” says Rishikesh. “It makes sense to work with Google – the business that designed the Kubernetes container-orchestration system.”

Rapido has also started using the Cloud Functions event-driven serverless compute platform to process smaller jobs. “This is ideal for small use cases in particular as we do not have to spin up virtual machine instances,” says Rishikesh.

Finally, Rapido is using image classification through the Vision AI service to analyze riders’ documentation, such as driving licenses. This allows the business to verify details such as names, addresses, and expiry dates with more than 90 percent accuracy – a high rate in a country where each state has its own license template.

Expanding rapidly to new cities

The Rapido app enables drivers to pick up customers quickly – in most cases, between 2 and 5 minutes.

Overall, the high-quality experience for consumers and drivers delivered by Google Maps Platform, combined with Firebase, has helped power Rapido to robust growth. The business now takes more than 5 million orders per month.

“With Google, we are delivering the right experience to users through Google Maps Platform, Firebase, and Google Cloud Platform services,” concludes Rishikesh. “We have realized our vision faster and now have a robust platform to grow in the future.”

Businesses migrating their SAP environments to Google Cloud do so for a number of reasons. Most cite the agility, scalability and security advantages of migrating SAP workloads to Google Cloud; many also focus on improved uptime and performance. 

At some point, most businesses also want to explore the idea that there’s a fortune locked up in their business data—and that the cloud holds the key. But leveraging the cloud to transform data into dollars is a process that involves special challenges—and specialized tools to address these challenges. For businesses running SAP environments in the cloud, most of which maintain a significant stake in legacy systems and data stores, the challenges tend to get even bigger.

The promises and pitfalls of APIs

This is where Google Cloud’s advanced data analytics, machine learning and AI capabilities, especially our API (application programming interface) management tools, come into play. Our Apigee API Management Platform is emerging as a star player for many of our SAP customers because it can open the door to innovation and opportunity for SAP systems and data stores.

API management speaks directly to what it really means to get value from business data. By connecting the right data sets with people willing and able to monetize that data, your business can benefit both indirectly (for example, by generating insights that lead to increased sales or better customer experiences) and directly (such as by selling access to your data to another business).

APIs have emerged as a pillar of modern digital business practices because they facilitate precisely these types of transactions. Today, every mobile device, website and application uses APIs to access connected services and data sources. APIs provide connection points between apps, platforms and entire application ecosystems. And by using de-facto standards such as REST (representational state transfer), businesses can utilize APIs to build and deploy innovative applications quickly.

3 reasons legacy systems and modern APIs don’t mix

Google Cloud customers running SAP environments may be ready to find the value in their data, but their SAP systems and data, as well as legacy APIs that don’t adhere to REST or other modern approaches,  may not quite be up to the task. This is because:

• Balancing accessibility, usability and security is a tough task—and the stakes are high. Opening up access to business-critical systems to third-party as well as internal developers could raise significant risks. Even for SAP teams with a high focus on security, the process of providing dependable, programmatic access to legacy SAP systems often involves significant time and effort. And while limiting access and API functionality are both valid ways to mitigate security risk, employing these tactics can slow the pace of innovation and very quickly undermine the reasons for starting this process in the first place.
• Managing APIs across legacy SAP applications and other data stores can be complex, costly and technically challenging. There’s a fundamental mismatch between the “how and why” of modern APIs and the types of programmatic access for which legacy systems were designed. Modern apps, for example, typically deliver API requests in far greater numbers; that’s true for client-side single-page applications as well as for more traditional server-side apps running on modern, elastically scaled app servers. There are also disparities in the size and structure of data payloads between what modern apps were designed to use and what legacy systems were designed to serve.

These examples boil down to the same issue: If your business is running legacy SAP systems or is in the process of migrating away from them, you’ll have serious work to do to make your data accessible for modern use cases and integrations. And asking third-party developers to adjust their methods and skill sets to consume your legacy systems is going to be a very tough sell.

• Monetizing API access presents another set of technical and practical challenges. For many companies, the name of the data game is monetization: actually charging developers for the privilege of accessing your high-value data sources. Getting this right isn’t just a matter of putting a virtual turnstile in front of your existing APIs. Any monetization strategy lives or dies based on its pricing—and this means understanding exactly who’s using your data, when they access it and how they’re using it. Even if you are not charging your developers for API calls, there are also some valuable insights to be gained from more advanced types of analysis, right up to having a unified view of every data flow and data interaction related to your organization’s API traffic. Overall, API monetization demands that APIs be built in a modern style, designed and maintained for developer consumption rather than just, per legacy methods, for exposing a system.

It probably comes as no surprise that an SAP environment, whether or not it’s considered legacy, was designed to focus on SAP system data and not designed to open the data inside an SAP system to other applications. And since these tools don’t build themselves, the question becomes, who will build them?

Apigee: Bridging the gaps with API management

An API management solution such as Apigee can help IT organizations tackle these issues more efficiently. In practice, companies are turning to Apigee for help with three primary SAP application modernization patterns, all of which speak to the challenges of using APIs to create value:

1. Modernizing legacy services. One of Apigee’s most important capabilities involves placing an API “wrapper” around legacy SAP interfaces. Developers then get to work with feature-rich, responsive, thoroughly modern APIs, and the Apigee platform handles the process of translating and optimizing incoming API calls before passing the requests through to the underlying SAP environment.

This approach to API management also gives IT organizations some useful capabilities. Apigee simplifies the process of designing, implementing and testing APIs that can add more functionality on top of legacy SAP interfaces; and it helps manage where, how and when developers work with APIs. This is also the basis for Apigee’s API monitoring and metrics—essential capabilities that would involve significant effort for most IT teams to build themselves.

2. Abstracting APIs from source systems. By providing an abstraction layer between SAP legacy systems and developers, the Apigee platform also ensures a consistent, reliable and predictable developer experience. Through this decoupling of APIs from the underlying source systems, Apigee can adjust to changes in the disposition and availability of systems while carrying on business as usual with developers using its APIs. In this way, SAP enterprises can package and market their API offerings—for example, publishing APIs through a developer portal—and lets them monitor API consumption by target systems.

Decoupling the source system from the developer entry points also shields connected applications from significant backend changes like a migration from ECC to S/4HANA. As you make backend changes to your services, apps continue to call the same API without any interruption. The migration may also provide opportunities for consolidating multiple SAP and non-SAP implementations into S/4HANA or cleaning up core SAP systems by moving out some of the functionality to cloud-native systems. Because Apigee abstracts consuming applications from changes to underlying systems and creates uniformity across these diverse systems, it can de-risk the migration from ECC to S/4HANA or similar consolidation projects.

3. Creating cloud-native, scalable services. Apigee also excels at bridging the often wide gap between SAP applications and modern, distributed application architectures in which microservices play an essential role. In addition to repackaging SAP data as a microservice and providing capabilities to monetize this data, Apigee takes on some essential performance, availability and security functions: handling access control, authentication, security monitoring and threat assessment plus throttling traffic when necessary to keep backend systems running normally while providing applications with an endpoint that can scale to suit any of your workloads.

Needless to say, Apigee’s security capabilities are absolutely essential no matter how you’re using API management tools. But because Apigee also offers performance, analytics and reliability features, it can position companies to jump into a fully mature API monetization strategy. At the same time, it can give IT teams confidence that opening their SAP systems to innovation does not expose mission critical systems to potential harm. 

Conrad Electronic and Apigee: using APIs to drive innovation

We’re seeing quite a few businesses using Apigee to create value from legacy SAP environments in ways that didn’t seem possible before. For an example of how Apigee and the rest of Google Cloud work together to open new avenues for innovation for SAP users, consider Conrad Electronic.

Conrad Electronic combines many years of history as a successful German retailer with a progressive approach to innovation. The company has digitally transformed itself by leveraging an existing, legacy SAP environment alongside Google BigQuery, which provides a single repository for data that once resided in dozens of disparate systems. Conrad Electronic is using Apigee to amplify the impact and value of its transformation on two levels.

First, it’s using Apigee to manage data exchanges with shipping companies and with the procurement systems of its B2B customers, giving these companies an improved retail experience and reducing the friction and potential for error that come with traditional transaction environments.

At the same time, Conrad Electronic uses Apigee to give its own developers a modern set of tools for innovation and experimentation. A small development team ran with the idea, building an easy-to-use tool that gives in-store staff and visitors access to key product, service and warranty information, using their own tablets and other devices.

“APIs give people the freedom and independence to implement their ideas quickly and effectively,” said Aleš Drábek, Conrad Electronics’ Chief Digital and Disruption Officer. “As an effective API management solution, Apigee enables us to harness the power of APIs to transform how we interact with customers and how we transfer data with our B2B customers.”

Explore the possibilities with API management

To learn more about how Apigee can solve the challenges that come with opening up your SAP systems to new business models and methods for innovation, see here. Also for more information on Google Cloud solutions for SAP customers, see here.