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How to build an API economy for your enterprise

December 7, 2020

Application programming interfaces (APIs) – tiny bits of code that easily allow different systems to interact with each other – have become essential tools for digital businesses of all sizes, especially as the cloud has grown in popularity. An API-driven approach can provide your organization with great flexibility to develop and deliver new business functionality in a more easily scalable and platform-agnostic manner than is possible with more traditional approaches.

The ecosystem of business opportunities enabled by the delivery of functionality, data, and algorithms over APIs is called the API economy. This promotes the disassembly of monolithic applications into smaller microservices that promote business agility. What’s more, cloud providers such as Amazon Web Services (AWS) have made it easier than ever for companies to develop, deploy, and manage APIs with tools including the Amazon API Gateway.

Typically, enterprises going through cloud transformation focus their attention on app migration and modernization. However, as a decision maker, your long-term success depends on adopting a sound enterprise-wide API strategy, which lays the foundation for the creation of a robust API economy. Here are some things to keep in mind when embarking on API-led transformation.

Think APIs, not apps. Stop thinking of your business functions in terms of discrete applications. In cloud-native environments, those applications are broken down into microservices – single-function modules that can be combined in different ways, using APIs, to deliver the required functionality. Whether you are refactoring an existing app or building a new set of functionalities, today’s best practice involves developing microservices and publishing them as APIs. This promotes loose coupling between applications while delivering greater flexibility to make changes. It also confers greater control over functionality upgrades and deprecation timelines.

Implement API lifecycle management. A single API is small, but any enterprise will require a lot of them. It’s essential, therefore, to have a robust management system in place to manage the entire API lifecycle. Modern API tools make it easy for enterprises to create, publish, maintain, monitor, and secure APIs at scale. They also include versioning, code generation, collaboration, deployment, reporting, and release management. For applications running on AWS, Amazon API Gateway offers much of this functionality.

Still, in my experience, implementing a sound API governance strategy involving these aspects can become a real challenge as enterprises start their journey. Because of this, when preparing to transform your enterprise to leverage the advantages of APIs, it’s important to understand best practices for managing each stage of the API lifecycle. For example, I recommend using APIOps – DevSecOps tailored to the API economy – to automate these stages as much as possible to reduce errors and increase speed and reliability.

Bolster security and monitoring. The API economy delivers many advantages, but the more you move to APIs, the more your network traffic will increase. This means your enterprise must keep abreast of, and adopt, best practices for monitoring, alerting, and notifications. So, as you plan your move to APIs, also think about managing them and keeping your network secure. You will likely require an additional governance layer to ensure rules relating to API standards and security policies are applied in a consistent manner across your organization.

Adopt API-based cost tracking. APIs can also be leveraged for capturing the costs of business functionality at the required granularity, so decision makers can assess, predict, and optimize operating costs. They’re also useful for calculating chargebacks and showbacks for business units, customers, and partners. This sort of accounting has not been possible with monolithic applications running in traditional data centers.

Creating API economies at scale is a complex activity that requires careful planning, shifts in organizational culture, and the adoption of new tools and practices. Because there is a proliferation of API management tools in the industry, adopting a criteria-based evaluation and running a proof of concept to finalize the decision are both important steps toward successful transformation.

As a cloud leader at Capgemini, I have worked actively with a number of enterprises to transform them to take advantage of the API economy with AWS. Please contact me for more information about how we can help you lead your enterprise through this journey or learn more about our experience, case studies, and thought leadership in this area.

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