Skip to main content

API Strategy – why does it matter

article banner

APIs are fast becoming a critical element of many businesses’ digital transformation efforts. And it is easy to see why. It gives them the ability to integrate their data from various systems and, in the process, make their IT ecosystem more responsive and adaptable to change.    

Yet, many businesses fail to realise the value they intended from their APIs. In most instances, this is a result of poorly planned and implemented APIs. In other words, it is the result of lacking a proper API strategy.

What is an API Strategy?

APIs have been used for years by businesses to connect applications and platforms. An API strategy however is less about the technology itself and more about the development of an ecosystem where businesses can access all their data from one central hub.  And although each business may have different objectives to achieve via its APIs, the strategy focuses on establishing the parameters for designing and building these APIs.

A strong API strategy takes into account the platform of APIs, the channels of platform availability, and the people or entities that will have access to those APIs, while giving developers the framework for building APIs. When businesses succeed with this, they can build a thriving ecosystem.

Why is an API Strategy important?

APIs give businesses the following benefits:

  • Accelerated development. APIs simplify the process of integrating different platforms and data sources. As a result, API integration eliminates the need for point-to-point integrations with custom code. This enables businesses to adapt to change faster, whilst reducing effort and cost.
  • Reusability and Scalability. One of the main benefits of APIs is that they can be reused for various integrations. In addition, they also enable traffic management because they are able to control the flow of data. As a result, businesses can scale better and more efficiently.
  • Automation. APIs make automation possible by simplifying communication between applications and services. As such, they eliminate the need for many manual processes.
  • Collaboration. APIs allow businesses to connect their applications and data sources to external third parties. This facilitates collaboration and makes it possible for businesses to build partnerships that would, save for APIs, not be possible.
  • Innovation. Because APIs are far easier and cheaper to implement and maintain, they encourage experimentation and innovation.


It is important to remember that although APIs offer many benefits, they should not be seen as a stand-alone tool. They should form the fabric of integration across the enterprise to enable the connectivity and integration that today’s technology landscape requires.

A proper API strategy puts APIs at the core of a business’ data integration. With it as a foundation, businesses can build new business lines and services according to ever-evolving customer needs and demands. For example, they can easily convert their website to a mobile app, or CRM data can be used in their marketing platform.   

In its article The value of APIs for business, MuleSoft offers two excellent examples on the value an API strategy can create for a business:

Connect with customers

Take the hypothetical case of a national auto insurance provider. Over the years, as part of its normal business operations and planning, it has assembled and maintained comprehensive, detailed, and up-to-date data on the quality and condition of local roads all across the country. By making this previously internal data publicly accessible through an API, the company unleashes the creativity of developers and related businesses to devise new uses for the data. Developers create apps that recommend driving routes based in part on road quality. Civic groups develop apps that empower citizens to band together and petition local officials for better funding of transit infrastructure. The insurance company itself gives potential customers a way to get rate quotes — whenever they want, and from wherever they happen to be — through web and mobile apps. Simply exposing this previously isolated and hidden data through a public API has given the insurance company a powerful way to extend its reach to thousands of new customers — who now regularly connect with the company in a more personal, meaningful way. This API strategy has allowed the company the opportunity to improve customer engagement as well as creating new products and new channels that can be used in increasingly innovative ways. 

Streamline operations

The insurance company could also develop private APIs for use by its own employees — for example, to provide its sales team with information that can help them give accurate quotes more efficiently, even when they are on the road, through web and mobile apps. Another API could enable the company’s claims department to more easily access data that will help them process customer claims more quickly, more conveniently, and with fewer errors. These are just a few examples of how an internal API strategy can improve operational efficiency and customer service for businesses.

Implementing an API Strategy

Now the question is, how can businesses implement an API strategy? Although different organisations will have different needs and requirements, there are certain common steps a business should go through to implement its API strategy.

These steps include:

  • Establishing a digital strategy. The first step is to establish a digital strategy, aligning stakeholders, defining business outcomes, and validating the ecosystem and business models.
  • Aligning the organisation and culture. Here, the business should realign itself to the new capabilities it aims to gain through the use of APIs. Here, it is important to view the APIs as trustworthy and secure products, designed with their target audiences in mind. This realignment will enable the business to create new value, provide excellent customer experiences, and improve outcomes.
  • Consider and deploy the supporting technology. An API by itself is of little value to the business. It is the technologies that ‘consume’ the APIs and the resulting experiences that generate value. In simple terms, while APIs make the data available across an enterprise, success is defined by how the wider ecosystem of users and applications, both internal and external, will use this data.
  • Document-document-document. Creating a clear and easily accessible documentation of the API strategy, will help current and future users across the organisation and its extended ecosystem to have a common understanding and point of reference with respect to what the business is trying to achieve and how.
  • Engage. Once the strategy is formed, it is important to engage the entire ecosystem to maximise awareness and adoption.
  • Measure success. As a final step, businesses need to measure the success of their API strategy by using relevant metrics. These include revenue metrics like return on investment, operational metrics like uptime and errors, and developer metrics like speed of delivery. And by measuring and testing, businesses will gather data that will enable them to continuously optimise their API strategy.

Related reads.

WHAT WE DO.

Explore our wide gamut of digital transformation capabilities and our work across industries.

Explore