As API Complexity Grows, Tame It With Centralized Governance

Decades after “digital transformation” became a mainstream concept, most companies are well along their path. But a major roadblock remains: strategies, technologies, capabilities, and speeds are out of sync across business units and regions. Application Programming Interfaces (APIs), often referred to as the glue of the digital world, were hailed as the solution to connecting systems, companies, people, places, and things.

APIs are indeed enabling more and more integrated digital experiences, such as telehealth or payments apps. They also represent an important shift in company business models: eBay famously generates 60% of its revenue from APIs. But as this thriving ecosystem grows, it often leads to API sprawl, where APIs are scattered everywhere — across geographies, lines of business, and API gateways — with no way to find and govern them all in one place. And the complexity is only going to get worse.

Growing API complexity threatens to strangle growth

We’ve been keeping an eye on this trend for a while, and our latest research confirms our suspicions: the average enterprise currently uses three different API management vendors, but this will grow to four on average by 2023 – an increase of 33% in just two years.

We recognize the complexity of today’s enterprise. There are good reasons for it: whether it’s to meet changing security needs, move to the cloud, or make their infrastructures — and their businesses — more resilient and agile. Regardless of the reason, enterprise IT isn’t likely to get simpler anytime soon.

Companies are grappling with investments of the past, struggles with current solutions in the present, and seeking greater automation and innovation in the future. In the melee, it can become impossible to see what APIs exist, how they're working, or if they're properly governed, and it can delay the launch of new digital projects and offerings, negatively impacting the bottom line.

Master complexity with centralized control

Various business units across multiple regions can adapt to their company's technology choices, but only if they have the independence and flexibility to get their work done in a language that makes sense to them. If simplifying and consolidating isn’t the answer, what's going to help them avoid complexity pain points such as productivity, scalability, or security struggles?

We believe the answer lies in central governance and visibility. Consider, for example, how API reuse is impacted by a lack of governance. It costs $29,200 on average to build an API, according to the research cited above. Imagine the cost of another business unit having to rebuild the same API from scratch, simply because they couldn't find the one that already existed.

French energy utility ENGIE was running into this issue. Each of the company's 26 business units had a separate contract with the same data provider. Each business unit also had its own API management platform, with no centralized visibility or data sharing. To solve the problem, ENGIE built a Common Data Hub that shows all the APIs and data across all business units. By exposing APIs and sharing data from a single point of control, business units reduced duplicate data purchases by 60%, which resulted in three times fewer requests to external data providers.

HM Health Solutions published all its digital services on a central catalog to offer its developers an instant overview of what APIs are already available — reducing duplication of effort and cutting time-to-market for new products. They are now well on the way to delivering the client-facing APIs that will power a new generation of digital healthcare services.

Finally, central governance of APIs can help you reach untapped markets and accelerate growth dramatically. When Indonesia’s PermataBank implemented a central API platform to securely expose products and services to more than a thousand fintech partners, each partner was able to generate new accounts for the bank using their own API-powered apps and services. Customer acquisition quadrupled in just three years. The bank delivered the kind of digital experiences people expect, without hiring new staff or opening a single new branch.

An open API management platform is essential to taming enterprise IT

Today's environment demands speed, innovation, automation, and constant change. As APIs normalize the enterprise surface area unlocking innovation and better customer experiences, I believe it is imperative to select the right API management platform. It should offer best-in-class security governing enterprise traffic and bring all your enterprise assets into a unified catalog. It should also allow both IT and business users to create integrations using a low-code/no-code approach, and offer deployment choice as well as event-driven capabilities. Be sure your API management platform vendor is consistently recognized by industry analysts for its leadership in the field.

The right API management platform will help you master growing complexity and unleash the full value of your data.

Vince Padua is Chief Technology and Innovation Officer at Axway.

Axway helps companies move forward faster and create brilliant digital experiences using our Amplify API Management Platform and proven MFT and B2B integration solutions. Vince Padua guides his team in innovating the technology and products that combine to form the company’s industry-leading enterprise integration platform. His focus is to capitalize on technology trends, drive portfolio and architecture transformation, accelerate new business models, and foster co-innovation with partners, developer communities, and customers.