APIs (or, application programming interfaces) are software intermediaries that connect data systems and applications such that information can be sent back and forth between them.
They’ve become essential both inside companies and across the digital world. They help facilitate many elements of our day-to-day digital experience. When you check out at an online store and elect to “pay with PayPal,” you pay using an API. When you log into an online service using Google, or Facebook, or Twitter—you’re using an API. Or, let’s say there’s a big movie coming out. Millions of people want to know where they can see it. Theaters will of course have their own websites and systems that list their movies and showtimes.
But to catch as many moviegoers as possible, they also make that information available to aggregator websites, like Fandango. When moviegoers then visit Fandango to see showtimes in their area, Fandango uses APIs to find “exposed” or shared showtime information from participating theaters, and to then show that to users depending on their area. This transaction happens in real time through the connective tissue of APIs.
(Important to note: APIs today are designed and implemented with security top of mind. Because the function of APIs is to move data back and forth between parties and platforms, the transactions APIs process tend today to be facilitated with such safeguards in place as unique token IDs, digital encryption, etc.)
APIs operate in the background, such that end-users don’t really notice them. But over the last several years, due to the increased adoption of SaaS, they’ve garnered much more mainstream attention. Today there exists what is known as an “API economy,” which revolves around this business of integrating systems between and inside organizations. Companies offering APIs as their core product have raised large VC rounds and found success.
Benefits of APIs
One reason for the buzz around APIs is the role APIs they play in digital transformation efforts—or, efforts to digitize all elements of an organization’s operational infrastructure. APIs facilitate connectivity and communicability, enabling users to more easily pass data back and forth between formerly disconnected apps and systems. This makes data more easily accessible and actionable, which promotes smarter decision making.
Here are a few additional benefits of APIs:
- APIs allow for actions taken inside one application to trigger actions in another application or system. (For example, a form filled in Slack updating a field in your CRM.)
- APIs can create a common interface between systems.
- APIs can help companies improve their customer experience, through more personalizable messaging and targeting (see the Fandango example above).
All of this, of course, is valuable. But what makes APIs truly essential is something different: they’re fundamental not only to digitization, but to composability.
What is composability and where do APIs fit in?
Composability is a way of building software using “building blocks” composed of business capabilities. These building blocks can be assembled and reassembled to create full blown, no-code software solutions.
While composability can be used in all software contexts, composable building blocks in the context of enterprise software are known as enterprise components (ECs). ECs are modular, interchangeable, and reusable capabilities that perform actions or complete steps in a business process. These actions take one of three forms: 1) actions on people; 2) actions that perform business logic; and 3) actions on systems or data.
That last step is where APIs come in. They’re utilized in ECs to allow any user inside an organization to integrate and access components of the company tech stack. When a user composes an automation solution, for example, which helps users update information in their company’s CRM directly through Slack, that user will utilize an EC capable of integrating those two platforms through APIs.
Why does this matter? Well, human-run organizations are massively inefficient. A big reason why is so few people inside them know how to code. Software is the most powerful change-making tool mankind has ever made. But fewer than 0.5% of people alive today know how to build it. Only a slightly larger number possess the technical acumen required to implement and manage technological solutions.
This has rendered nontechnical users totally dependent on developers not only to build new solutions, but to help them even just use the tools they already have. (And the solutions they’re given often require all kinds of forced changes in behavior to realize any value, which makes iterating impossible.) The result is a majority of users inside organizations remain unable to operate with real creative independence or in a true agile fashion.
Composability promises to change all that by giving every person with the ambition to be technically creative the ability to be technically creative. It lowers the cost and skill barrier to building complex software solutions and expands the pie of who is able to build and leverage software inside organizations. In turn, it empowers nontechnical teams to finally operate in a true agile fashion—to deliver solutions and fix problems in an iterative, agile way. (For example, to ship, at the end of each iterative segment of a project cycle, a version of the solution you’re working on; implement feedback; and then repeat that process over and over until you have the most effective, elegant version of the solution possible.)
For the integrations they help facilitate, APIs are a crucial part of the composable equation
APIs have been around for a long time. They were pioneered in the ’60s and ’70s, as folks came to understand that computer systems and software programs could get more done by working together.
That understanding has only become further solidified since.
This is in part because of an increased awareness inside the enterprise of the importance of tearing down silos and barriers to innovation that organizations unintentionally erect between their different technology environments and departments.
APIs help break down the silos and penetrate those barriers.
But APIs are not a panacea. And they cannot facilitate true digital transformation efforts on their own.
Though increased connectivity, communicability, and interoperability among the apps, websites, and systems we use is positively crucial—and something we by and large have APIs to thank for—the fact is that the real value of APIs is only just now being tapped.
That value comes in the role APIs play in helping organizations transition from more traditionally hierarchical operational models to an architecture conducive to org-wide composability—which enables not just increased connectivity, but true agility, efficiency gains, and steps towards citizen development.
The future of enterprise software is exciting. APIs have a crucial role to play in it.
Want to learn more about how APIs help power composability? Click here.