Innovation Labs
White Paper
Accelerate Your Digital API Program
About the Author
Abhishek Seth
Abhishek Seth is an Associate Consultant in the API Program within the Research and
Innovation unit at Tata Consultancy Services (TCS). He has over 10 years of experience in
the IT industry in strategy and marketing. He has worked in diverse areas such as
business analysis, alliance management, digital solutions, APIs, and the Internet of
Things (IoT). Abhishek holds a BTech in Information Technology from UPTECH University
and an MBA from XLRI Jamshedpur.
Abstract
Application Programming Interfaces (APIs) are enablers of an enterprise's business model
transformation. They allow externalization of enterprise assets, thus paving the way for an
open innovation ecosystem. Enterprise assets can include data, product functionalities,
capabilities, and services that help to differentiate the enterprise in the marketplace.
By extending the reach of their assets and leveraging their external partner and developer
ecosystem, enterprises can create new products and services. APIs are helping organizations
like Google, Twitter, and Facebook to more quickly tap new markets, business channels, and
revenue streams. A coherent API strategy will allow large companies to experiment with and
develop APIs quickly, based on feedback and learning. Thus, APIs enable agility even in large
organizations.
We have observed that older enterprises find the API route to digital transformation difficult.
New businesses are 'digital by birth' and use APIs with ease. On the other hand, older
businesses are just beginning to understand the value of investing in API programs.
This paper explores how enterprises should ideally manage an API program within the
company for effective digital transformation. We believe a three-pronged approach that
defines the strategy, operations, and change management processes will lead to smoother
adoption of the API platform.
Contents
The Rise of APIs
5
An Enterprise API Strategy
6
Effective Operationalization
6
The Need for Change Management
8
Innovation for Competitive Advantage
8
The Rise of APIs
APIs are not new to enterprises. But so far, they have largely been employed in a tactical and ad hoc manner for
specific internal projects. With increased adoption and success stories of consumer APIs, such as those from
Facebook, Google, and Twitter, enterprises are attempting to adopt APIs as strategic assets.
The reasons for adopting an enterprise API program are not far to seek:
n
Enterprises are moving to digital platforms.
n
The employee base of most companies has an increasing percentage of Gen Y people.
n
Like customers, employees also want more processes on mobiles.
n
Reusability of APIs enables agility and allows enterprise IT to create new applications quickly.
Enterprise APIs deliver the means to open new global markets, business channels and revenue streams; to save
costs and strengthen engagements with partners and other domains; and to move to cloud-based operations and
provide channel-agnostic services (see Figures 1 and 2).
While there are enough benefits that can accrue from enterprise APIs, the risks must also be clearly understood. The
chief risk involves exposing databases and processes to too many people. Unless there is adequate planning,
proper protocols, and employee education, an API program is going to make slow progress.
Salesforce Revenue
Expedia Revenue
of Expedia affiliate network's
$2 billion in annual revenue is
generated by APIs
Revenue
Others
Revenue
From API
Others
From API
Figure 1: Success Stories in B2B APIs¹
[1] HBR, The strategic value of APIs, January 2015, accessed February 2016, https://hbr.org/2015/01/the-strategic-value-of-apis
5
Simplified integration of legacy and
modern data
Digital Assets
Stronger engagement with partners
and vendors
Any Public APIs
Your Internal Developers
Reduced development cost
Your Private APIs
Your Platform
• Data
• Information
• Services
Your
Partners
Developers
Rapid
Apps
Improved operational efficiency
Expanded customer reach
Your Open APIs
Increased revenue through
new business models
Any Public APIs
Third-Party Developer Community
Stimulated innovation
Figure 2: A seamless API platform can lead to multiple enterprise benefits
An Enterprise API Strategy
We submit that an API program should not be managed in an ad hoc fashion, but should be part of the company’s
digital strategy. This calls for:
n
Aligning APIs with business goals: The API strategy should clearly outline what part of the API program will be
strictly internal, and what will have exposure to partners and consumers.
n
Understanding the value of APIs: If business users understand the potential of a good API program, it is easier to
find sponsors and patrons within the business to carry the program forward.
n
Managing risk: Risk officers need to understand that an API program does not necessarily have to touch sensitive
applications. At least 30% of enterprise APIs can be based on applications that do not access sensitive data.
Effective Operationalization
API management is the process of creating, publishing, promoting, and overseeing APIs in a secure, scalable
environment. It also includes the creation of resources that define and document the API in order to help
developers. To manage this effectively, enterprises need to look at a few important aspects (also seen in Figure 3).
6
Features: An enterprise-level API management solution should include the following features:
n
Composition and orchestration: Converting backend services to developer-friendly APIs
n
Security: Protecting exposed information assets against attack and misuse
n
Identity: Enabling client apps to provide secure, seamless access to backend services
n
Performance and lifecycle: Ensuring the availability of APIs for client apps and users
n
Developer engagement: Onboarding, educating, and managing app developers
API Gateway: It’s necessary to establish an API platform that provides access to all developers. The core component
of a full-featured API management solution is an API Gateway which acts as a proxy so that APIs do not have to
directly interact with client applications. The Gateway represents a central point where all the abstracted API
functionality is located and managed via a set of governance policies.
While Gateways cover most of the technical features needed for layered API architecture, additional functionality is
required to make the APIs themselves user-friendly for developers. This will normally involve integrating a webbased API portal into the Gateway, through which developers can register for APIs, access educational resources,
and monitor app/API performance.
Documentation: Enterprises need to create templates for user documentation of APIs. Good metadata helps
repeated use of APIs.
Legal Support: The legal team needs to define the fine print on API usage and misuse; this should be published on
the Gateway so that there is no ambiguity among stakeholders.
Service Lifecycle: Enterprises should create a robust API service lifecycle with specifications for design of the API,
testing, publishing, documentation, maintenance, and risk management.
Documentation
API
Portal
Internal, Partner & Third-Party
Developer Communities
Registration
Analysis
Community
API
Gateway
Security
Caching
Representation
Resources/ API
Orchestration
Architectural Layers
Mobile and Web
Applications
Figure 3: API Management Architecture
7
The Need for Change Management
Enterprise data and applications have been the bedrock of organizational ICT strategy for many years. These assets
have generally been accessible only to internal IT departments and R&D teams, with strict controls around external
access. IT teams understand the importance of enterprise security, and hence, do not find it easy to adjust to an API
economy. Internal IT teams must be apprised of the digital strategy and the risk mitigation steps the API program
will adopt.
Employees can be big contributors to a good internal API program. It would be a good idea to check if those who
work on legacy systems also understand how to work with APIs. To accelerate digital transformation, enterprises
can incentivize contribution and use of APIs. They can also run hackathons to encourage creation of new
applications and services. This has the additional benefit of fostering a culture of innovation.
Enterprises may not run rigorous checks on code for internal applications, due to lack of time or other practical
concerns. Exposing APIs from such programs is dangerous. APIs that are to be shared internally among groups, and
definitely those that are to be exposed to partner ecosystems, must be rigorously tested at the code level.
Innovation for Competitive Advantage
Unlike consumer APIs, enterprise APIs typically require a more interactive business relationship, proactive support,
and a deeper engagement model with stakeholders, and the enterprise may not be geared up for these.
An API program brings benefits to a number of stakeholders in an enterprise. It enables application developers to
quickly create, secure, control, deploy, analyze, and manage APIs and services for internal or external consumption.
They can better manage APIs and understand how they are used. Businesses can also market APIs to developer
communities (private, partner, and public) worldwide. IT operations staff can easily manage and upgrade the API
environment with the ability to monitor and scale without disruption to service.
An API management platform can provide a complete solution to overcome the challenges of managing enterprise
APIs, thus allowing an enterprise to attract developers and partners. Such a platform will provide documentation,
tools for seamless onboarding, testing tools, and support and collaboration tools to foster communication and
handle issue resolution. It will also create the infrastructure that an enterprise needs to benefit from external
developers without undue risk. The right API platform can transform an enterprise’s business model and give it a
competitive edge.
8
About TCS’ Innovation Labs
Established in 1981, TCS’ Innovation Labs address real-world business problems, bringing scientific
rigor to the study of computational concepts, and delivering solutions that make computation more
reliable, efficient, and agile for our clients.
With a focus on three key aspects—Software, Systems, and Applications Sciences—our Innovation
Labs build on new ideas to create solution frameworks that deliver high business impact across
domains. Our Co-Innovation Network (COIN™) gives our clients access to potentially disruptive
technologies through our partnerships with emerging technology companies, venture funds,
academic research units, multi-lateral bodies, and Tata Group companies.
The global network of Innovation Labs is equipped with sophisticated infrastructure to support
leading-edge research. Our researchers file over a hundred patents each year, and our researchbased papers are a recognized voice on global thought leadership platforms. Our breakthroughs
have won several industry awards, including the MIT Technology Grand Challenge Award and the
Stockholm Challenge Award.
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