Digital transformation initiatives have been a top priority for several years in most companies. However, while such programs are considered a necessity for the long-term survival of most businesses, they haven’t always been prioritized or given the resources they deserve.
That all changed with the COVID-19 pandemic. Today, according to analyst Gartner, customers expect companies to accelerate digital initiatives due to COVID-19 and all industries are experiencing widespread digitization. In turn, this is accelerating the adoption of thousands of new APIs. That’s because the drive to make services digital is no longer a nice to have but business critical. Even post COVID, with some businesses opting for a hybrid work environment, we are seeing that acceleration continue. Put simply, as they race to catch up, organizations are digitizing and innovating faster than ever before.
Unlocking and Digitizing Valuable Functionality and Data
Every company in the world already has valuable data and functionality housed within its systems. Capitalizing on this value, however, means liberating it from silos and making it interoperable and reusable in different contexts -- including by combining it with valuable assets from partners and other third parties. APIs are the de-facto way to let developers easily access and combine digital assets in different systems, even if those systems were never intended to interoperate. In their most basic form, APIs are how software talks to software. But when APIs are designed with the developer experience in mind, and for reuse rather than just as bespoke integration projects, they become extremely powerful. DevOps teams are looking for more flexible architectures and practices and APIs help to significantly reduce the development effort by enabling re-use. Developers do not have to do everything from scratch, using APIs they can extract most of the functionality they need to create systems. This leads to significant cost reductions and faster delivery cycles (and more revenue for the company). I have seen companies who have taken this approach achieve as much as 30x reuse within the enterprise, and even higher reuse by external partners.
However, many companies are still not able to successfully take advantage of APIs at scale and transform into mainstream digital businesses, in the same way that many of the start-ups and digitally born businesses have successfully adapted such as Amazon, Uber, and Netflix. One of the biggest limitations has been the pace required; some changes can happen in weeks, but this takes months or even longer.
That said, when the pandemic hit, companies were forced to transform rapidly to adapt and survive, so how did they do that, and which sectors have done this successfully?
Let’s Look at the Public Sector
One sector that was probably less comfortable with this speed of change was the public sector. Devoting investment to large-scale digitization projects required a leap of faith that many civil servants felt uncomfortable in making. As a result, while pockets of digitization have grown and many governments had pushed digital transformation at a strategic level, until COVID-19 many citizen-facing processes continued to rely on in-person interactions.
This flipped overnight. With municipal buildings, courts, doctors’ surgeries, and police stations closed to the public, in-person services ground to a halt. Everything from unemployment benefit applications, medical appointments, and education, to planning applications and crime reports had to take place digitally, or not at all. COVID-19 proved to be a catalyst for permanent change. In fact, according to the Global Head of Technology Transformation for Infrastructure, Government and Healthcare at KPMG, Mike Stone, "The private sector and citizens have become much more used to working online and are therefore becoming more demanding around ease of access to services and the usability of digital apps." Certainly, the digital natives within government entities are likely to want to keep their foot on the gas pedal of change and maintain these advances.
As mentioned earlier, the success of these digital transformation initiatives is leading to more and more traffic being API based. The increase in remote working is putting additional pressure on organizations to make these services available and to keep adding differentiating features.
Consumer-facing businesses are seeing more API-based services being deployed which traffic customers’ personal data. For example, parcel delivery services utilize APIs to enable consumers to track the status and position of their parcels. Here, customers enter a parcel code and postcode, and if they match a valid entry in the database, they are authorized to view the shipping details.
APIs in Healthcare
The pandemic has created a catalyst to truly reimagine the future of healthcare. For example in 2021, a US Government directive, CMS-9115-F, set out to give patients greater access to their healthcare data via public APIs. This will break down barriers across the healthcare ecosystem, not just empowering patients but also increasing innovation and fostering competition in healthcare delivery.
Facilitating access to patient data and healthcare information is an effective method for preventing medical errors and improving patient safety and care. Purpose-built healthcare solutions based on full API-integration platforms enable organizations to participate in the API economy, which is key for healthcare companies looking to build a competitive edge. Patients also stand to benefit dramatically from interoperability. In the long run, easy access to their personal health information means patients can make better decisions regarding their care, ultimately leading to healthier populations across the country.
APIs in Financial Services
Furthermore, APIs are becoming a major feature in the insurance and FinTech sectors and, as customers become increasingly demanding of personalized, mobile solutions that leverage open banking, so we are seeing APIs become more of a factor in mainstream banking too. As more organizations continue to rely on mobile apps for customer access and take a cloud-native development and deployment approach, APIs will naturally continue to increase in usage in this sector. However, just like any other software driven service, APIs have a host of natural risks that emerge when poor coding practices are applied during application development. Therefore, organizations who use APIs for a host of reasons like mobile apps, digital streaming, digital payments, transfers between financial institutions, and other financial transactions should educate developers about common errors and pitfalls.
Bridging the Gap Between Modern Applications and Legacy Systems
Finally, as mentioned earlier, APIs hold tremendous promise to bridge the gap between modern applications and legacy systems by providing a needed interaction and abstraction layer. APIs can fully support access to data, interactions with data, and transfer of data, often with ease between very dissimilar systems and approaches.
In summary, the pandemic has led to greater creation and consumption of new APIs, particularly in areas such as healthcare, financial services, remote work, and supporting the homeworking lifestyle, such as deliveries and streaming. Other sectors are leveraging APIs owing to industry interoperability requirements or to bring about disruption. In short, APIs are the backbone of digital business ecosystems helping organizations to reap many benefits including accelerating product go-to-market timelines, improving developer productivity and velocity, and, most importantly, unlocking innovation.
Photo Credit: Sashkin/Shutterstock
Christopher Davey is Head of Solutions Architecture, WSO2