What is API Integration?

API integration is the connection between the Application Programming Interfaces (APIs) of two or more applications, which allows the systems to exchange data to execute a joint function. 

The meaning of API integration

Taking a closer look, API integration refers to the distinctly defined methods of communication between software components using the API layers of the two or more applications. API integrations play a crucial role in application integration, acting as the connection between different applications and systems which enables cross-communication of data. API integrations act as the foundation for a variety of processes that rely on maintaining synchronous data. 

Why is API integration important?

According to Software AG’s Annual APIs and Integration Report 2022, leading businesses are using APIs more frequently in a range of scenarios. With increased reliance on APIs, and a greater variation in their function across the organization, it is clear that enterprises need the ability to manage and utilize them as effectively as possible. This is accomplished with an integrated approach.   

The importance of APIs is unchallenged and essential to the operations of most enterprises. According to a recent study, API integration is essential to 83% of businesses and IT infrastructures. In 2022, the number-one factor in deciding whether to consume and produce an API is how well it integrates with internal apps and systems, suggesting businesses are increasingly using APIs to share data and offer services internally. State of API Integration Report, API integration is essential to 83% of businesses and IT infrastructures. In 2022, the number-one factor in deciding whether to consume and produce an API is how well it integrates with internal apps and systems, suggesting businesses are increasingly using APIs to share data and offer services internally.  

Application integration

While an integrated approach to digital transformation is essential to organizations’ success, it’s also essential for simply conducting everyday operations effectively. This is especially true if the organization utilizes cloud-based applications and tools.   

The average enterprise now uses 1,295 cloud services, with departments ranging from finance to marketing to HR relying on a growing range of tools. The increasing number of cloud-based products and apps in an organization creates a disconnected environment.   

API integrations allow cloud-based applications to connect. By integrating these tools—via their APIs—enterprises create a sophisticated ecosystem of connected applications, allowing for a seamless process of secure, automated data sharing.  

API integration examples

When a customer uses a retailer’s website to shop, they use a front-end that connects with backend data and infrastructures. If the company’s backend systems aren’t communicating quickly and accurately, customers cannot access data that allows them to view inventory, let alone make a purchase.   

A seamless customer experience relies on the integration of many applications and data sources. API integration provides the connections that allow retailers to deliver a satisfying digital experience.  

For example, prior to making a purchase, a customer may want to find information, such as store inventory and prices, using a computer, tablet or phone. Customers can’t buy what they can’t find, and today’s consumers have little tolerance for hunting down information on products and pricing. Retailers need to ensure that devices, applications, networks, content, channels and interactions are integrated to connect their potential customers with the right information, in the right context, formatted for the right device.   

Further, once a customer adds a product to their cart, the order management system needs to access data on products and inventory levels—API integration facilitates that seamless communication of data.   

API integration | SaaS 

The average organization today has 323 SaaS applications in its stack, and even companies with fewer than 500 employees are onboarding an average of four new apps every month. While choosing from thousands of SaaS applications allows businesses to handpick the optimal tools that they need without hassle, SaaS applications are almost always disconnected from each other. This impairs the organization’s visibility into their operations, makes it hard for employees to find the information they need and hampers ROI from SaaS investments.  

A complete API integration ties together an organization’s SaaS applications for a variety of use cases in virtually any department. For example, when a company’s ecommerce platform is integrated with its accounting and invoicing service, information from an online purchase is automatically transferred to the accounting system to be booked and fulfilled without manual labor.   

When all SaaS applications can share information seamlessly and without the need for human intervention, organizations reduce errors, increase productivity and can automate business processes.  

Business benefits of API integration

API integration helps businesses streamline operations, make informed decisions and change faster in response to business pressures or opportunities. 

API integration platform

API integration platforms give an organization full visibility over their APIs, meaning APIs become far easier to manage, data is secure under one platform, and businesses can communicate information between multiple APIs. A successful API integration platform gives users across the enterprise the ability to control and integrate data without requiring technical knowledge.  

Success story: AXA Cooperative Insurance

In the insurance marketplace, success is tied to a provider’s ability to harness data—they must instantly generate quotes for new customers and keep on top of ever-stringent regulations.   

This came as a challenge for AXA Cooperative Insurance, one of the largest insurance providers in Saudi Arabia, as its complex and ever-growing application landscape was strung together by a web of rigid point-to-point connections.   

As a solution, AXA needed a modern, API-led integration platform—which would ensure the fluid flow of data to regulators, brokers and customers, and position the company for continued growth into the future. AXA Cooperative utilized webMethods, an API management and integration platform, to share data in real time with multiple key government agencies that keep records of accidents, oversee all nationwide health policies and track key vehicle safety data.   

Additionally, AXA is now focusing on improving the customer experience. Using webMethods, AXA is creating a unified customer repository—which will centralize customer data and ensure customer information is accurate, updated and easily accessible. 

Learn more

True business transformation can often feel just beyond your grasp. But with the right tools, it can be well in hand. Those tools? APIs, Integration and microservices. Download our eBook on How to Transform Your Business with APIs, Integration & Microservices to explore how Software AG is helping companies succeed with their digital initiatives in more detail and create the connections we rely on every day. 

webMethods API integration solution

Making a true connection with your customers feels impossible when your data is siloed and inaccessible. Without connecting your applications on-premises or in the cloud or even your legacy systems, innovation remains out of reach. Until now.  

webMethods is the integration market leader and the #1 application integration platform of Software AG. With webMethods, integrating everything—applications, clouds, mainframe systems and even IoT devices—makes your business processes more efficient and your enterprise more agile.   

Software AG’s webMethods platform enables you to:  

  • Scale with microservices 
  • Integrate SaaS apps 
  • Automate workflows 
  • Develop with DevOps 
  • Make it easy to build integrations 
  • Unite integrations on one platform 
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