They have become indispensable and we use them every day, sometimes without knowing or noticing it, in a wide range of activities. An example in the private sphere would be when we make a purchase online and pay using our credit card, or when we subscribe to a service using one of our social accounts. Another example would be when we sign a new contract for gas or electricity, and we are redirected to a signature page that allows us to affix an electronic signature.
They allow us, as companies, to quickly integrate different software and applications so that we can offer our customers new functionalities and a wider and more integrated range of services. We are talking about Application Programming Interfaces, better known simply as APIs. In this article, we will try to understand what APIs are and why they have recently become more and more important for companies in various sectors, becoming one of the main disruptive innovations of our time.
What is an API?
Application Programming Interfaces, or APIs, are applications that have the ability to communicate with other software and applications, exposing their functionality and allowing them to be activated and used. API integrations, therefore, allow applications to communicate with each other, even when they are software solutions developed by different manufacturers. In this way, when we want to develop a new service or a new feature, we don’t have to develop a new application from scratch, taking up the time and effort of the IT team and thus putting in place a considerable amount of resources.
Through API integrations, we can communicate with the applications we need, integrating them directly with our software and thus considerably reducing time and effort.
APIs can be classified according to three types, depending on how they are used. We can therefore have:
● Private APIs, used only within the company and therefore aimed at optimizing internal processes
● APIs shared only with business partners, for example with a supplier who, thanks to an API, allows us to immediately view the availability of stock
● Public APIs, i.e. accessible to anyone. In this case, anyone can develop apps capable of communicating with APIs, creating value-added services. The best known examples in this sense are Google, Facebook, PayPal, and others who have decided to make their APIs available, thus opening the way to a multitude of new services and opportunities and creating new income channels.
The strategic role of API integrations
The first advantage of APIs, therefore, lies in the possibility of communicating with existing software and applications to extend and enhance our solutions. Thanks to the reuse of technologies that are triggered in this way, the effort required by the company is significantly reduced, generating savings in terms of resources.
APIs can be used to enhance and streamline existing functions, as well as to add new functionality and integrate more services. By simplifying processes and shortening the chain of actions required to achieve a given result, we can cut costs, not only in economic terms, but also in terms of the resources used to carry out an activity, including the time and energy of employees and collaborators. In this sense, API integrations can serve us to communicate more easily with our business partners and to simplify internal company activities. Most importantly, APIs give us the opportunity to offer new services to our customers, thereby improving their customer experience.
When we refer to the opportunity to monetize through APIs, therefore, we think of the combined effect of several aspects. On the one hand, as we’ve seen, APIs generate savings by speeding up and simplifying back-end processes; on the other, they allow us to make more and more services available, while also increasing the visibility and coverage of our brand. How?
Expand your business through APIs
APIs can become an extremely effective tool for reaching new potential customers and expanding existing revenue channels, or opening new ones. First of all, they allow us to offer our customers a more complete and personalized experience, which can be more satisfying from all points of view.
Let’s take the case of a car rental company as an example. The customer goes to the company’s website, enters the search parameters that interest him (country, conditions of withdrawal and return, type of car, and so on), looks at the possible options and finally chooses the car that suits him. At this point, he has to sign the rental contract and proceed with the payment. How many times have we all had to print out the contract, sign it, and then scan it and send it back to the company? And how many times have we all thought, “I don’t have the time, I’ll do it tomorrow,” finding a more convenient solution in the meantime and abandoning the proposal of the first company?
If, for example, the process of signing the contract had been faster and easier in the first instance, this probably wouldn’t have happened and, thanks to a simple API integration, the first company would have acquired a new customer. In fact, through APIs, it’s possible to connect to a previously evaluated and selected e-signature solution and offer the customer a simple, fast, and secure way to conclude the contract. Thanks to special API integrations, it is possible to make all of these operations available through apps to be used on smartphones, in an even more agile and appealing way.
This is just a simple example, but it helps show how strategic the role of APIs can be in developing efficient and successful proposals. In addition, APIs can be used to reach a wider range of potential clients, for example by making services available to our partners’ clients, thus generating a virtuous cycle of mutual benefit.
For the characteristics outlined above, APIs were immediately and correctly included in the category of disruptive technologies, precisely because they revolutionized the way we design services. But, above all, they have also revolutionized our expectations. APIs, together with the potential offered by the cloud, with which they are closely linked, have contributed to the creation of an increasingly interconnected ecosystem of services and applications, so much so that by now we can expect nothing less.
When we order a product online, we expect to be able to pay directly with our credit card; when we need to access a new service, we expect to be able to do so using our Google or Facebook account, without having to create a new account from scratch, which would take additional time and several steps. APIs allow us to access multiple services from a single interface, providing a level of integration and efficiency that is now taken for granted.
The role of API integrations in the cloud ecosystem
As we have mentioned, APIs are closely linked to cloud technology. For some time now, many services have begun to “move” to the cloud because it is a solution that allows lower costs and high levels of efficiency. By using cloud-based services, a company does not have to acquire expensive servers on which to install the hardware and software infrastructure it needs to carry out its business.
This also allows them to avoid the necessary space and maintenance costs that having servers requires. On the contrary, it can rely on external suppliers who make their software solutions available in the cloud… through APIs.
By developing their own services using cloud infrastructure, providers can make them available to their partner companies according to the main paradigms of the cloud, namely:
- SaaS, Software as a Service
- PaaS, Platform as a Service
- IaaS, Infrastructure as a Service (the only case in which, on request, the necessary server and hardware infrastructures are also made available)
By sharing the necessary APIs with partners, providers make the necessary services available to them, which can be of many different types: Integration of signature, payment or identification processes, implementation of e-invoicing services, and more. It is also thanks to this sharing and collaboration between technology and business partners that the virtuous processes are triggered that bring the mutual benefits discussed in the previous paragraphs.
The multiple applications of APIs
API integrations can find applications in many sectors and contexts, and it is also in this transversal character that their potential lies. As we have seen, they allow the reuse of existing technologies and even the same API can be reused in different contexts, thus opening the doors to new services and supporting the process of innovation.
APIs can be used to increase the potential of any company, in any sector. In addition, APIs can also be used effectively in the Internet of Things (IoT). When we talk about the IoT, we’re referring to the ability of some objects and machines to communicate directly with the web, with other software and applications, sharing data and information in real time.
The IoT is a technology that is experiencing a great development and finds its application in various fields: From home automation to the automotive world, to industrial applications. This development is supported, once again, by the power of APIs.
In other words, APIs do a kind of behind-the-scenes work, kind of like the magician’s trick you can’t quite see. But with APIs, there are no tricks and no magic, of course. What is certain, however, is that API integrations and the cloud are two of the main technological requirements that allow us to live in the interconnected (and hyper-connected) world to which we have become accustomed, allowing us to carry out with ease and with just a few clicks, many activities that we take for granted, but that would have been impossible until a few years ago.
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