What is an API strategy?

An API strategy is a high-level plan for using APIs to contribute to organizational goals such as digital transformation. As companies develop a digital strategy, they realize that APIs often play a critical role in many functions of their business as an enabler for digital products and projects. An API strategy sets the direction for the use of API technology, which serves as a means to achieve digital transformation goals. An API strategy needs to create a shared understanding of the role of APIs and align diverse stakeholders in an organization.  

API strategy essentials

An effective API strategy consists of three parts: (1) a set of goals, (2) a rationale, and (3) a plan for turning the goals into reality. It is important to have all three elements in place for the API strategy to be effective. Resist the temptation to jump to the plan directly, as you will need the goals and the rationale to convince important stakeholders within your company.

  1. API strategy goals
    What do you want to achieve with API technology in your organization? On a high level, the intent for using APIs is typically related to supporting your organization’s digital transformation initiatives. Try to dig deeper: make goals more specific such as aiming to build a composable enterprise, renovate a legacy system landscape, collaborate with partners, create digital products, establish a platform business, or create a digital ecosystem.
  2. API strategy rationale
    Why are your API strategy goals important, and why are you using APIs to address them? Even if it might appear obvious to you, it might not be obvious to other stakeholders. Specifying the rationale and motivation for achieving the goals will bring clarity, create a common understanding and underline the importance of your efforts on APIs. It is often helpful to show how different digital projects and products can use and reuse the same APIs, the cost savings you can expect, increases in speed to market, and opportunities for new revenue streams.
  3. API strategy plan
    The API strategy plan documents how you can use API technology to achieve your goals. The plan may be high-level and link business outcomes to API-people, API-processes and API-products. The plan can also be specific and include setting up an API initiative, getting a mandate for APIs, developing API business cases, creating an API architecture, setting up an API product management practice, establishing an API lifecycle, API governance, API security, and API design and testing. 

Why API-based architectures excel in times of economic uncertainty 

How do you develop an API strategy?

An API strategy is not developed in a vacuum—it must be linked both upward to the high-level goals of an organization and downwards to the operational realities. The API strategy must clearly show the relationship between API success and business success.

For the upward connection to the high-level goals of the organization, use the digital strategy of the organization as a starting point. This allows you to develop API strategy goals and API strategy rationale. You can also use high-level IT goals (such as agility, modularity, changeability) and high-level business goals (such as new revenue streams, data economy, platform economy and digital ecosystems) as starting points for an upward-oriented API strategy.

At the same time, make sure you ground the API strategy in the operational reality of the organization. Take into account the current company culture, knowledge, architecture and practices. An enterprise will typically require a different plan than a startup organization, for example.

To develop a comprehensive plan for APIs, consider the following aspects of API strategy:

  • Setting up an API initiative
  • Getting a mandate for APIs
  • Developing API business cases
  • Creating an API architecture and infrastructure
  • Setting up an API product management practice
  • Establishing API governance
  • Establishing an API lifecycle
  • Ensuring API security
  • API design
  • API development and implementation
  • API testing 
Figure 1: An API strategy ties together many facets of API use and monetization across the enterprise.

When should you think of an API strategy?

An API strategy has the most impact when it is devised early, in coordination of starting an API initiative. In this situation the API strategy can provide a clear direction with its goals, an understandable justification with its rationale, and a plan for operationalizing APIs across different functions in the organization.

Revisit the API strategy as you grow API initiatives from pilot programs to more established initiatives. As APIs gain traction, you’ll have a roadmap to guide decisions for the greatest impact on business outcomes.

APIs should be part of the overall digital strategy of the organization, and they are more than a line item. Instead, APIs often span multiple digital strategy priorities. To encourage adoption of APIs, it is often helpful to link the positive effect APIs to other topics on your digital agenda. 

Figure 2: APIs often span several aspects of digital strategy

How to operationalize an API strategy

“Culture eats strategy for breakfast” is a well-known bit of wisdom attributed to the management consultant Peter Drucker. He didn't mean that strategy was unimportant—rather that it needs to be complemented with a powerful and empowering culture to lead to success.

This applies to an API strategy as well. An API strategy can only become successful if many people in the organization bring it to life, by incorporating it into their day-to-day activity and execute on it. People and the appropriate mindset are paramount for successful execution. The corollary to the Drucker principle is: API culture eats API strategy for breakfast. 

This means that writing an API strategy is just the starting point that must be followed up with an ongoing effort to form, improve and strengthen the API mindset. You need to empower the people in your organization to act on your API strategy. This can take various forms: technical education, coaching and mentoring, building a community, or an API mandate from high up in the organizational hierarchy.

API culture can be formed top-down, as was the case when Jeff Bezos wrote an API Mandate for Amazon in 2002, but it can also be built bottom up. An effective way to encourage bottom-up growth is to establish a central team that helps the organization to use APIs the right way. This center of enablement can do some of the work hands-on, and educate ambassadors in the various departments and teams to bring the API culture into the organization at scale. 

What is an Enterprise API strategy?

An Enterprise API strategy aligns all stakeholders of an organization behind a common, important goal for the API initiative. This alignment is often central for growing the maturity and the success of an API program.

A characteristic for APIs in large enterprises is the large number of stakeholders of an API program. Even if all stakeholders support the API program in principle, inefficiencies can occur if the stakeholders are not aligned. An enterprise API strategy aligns all the stakeholders in an enterprise (e.g. from several lines of business, IT, and the core API team) around a common goal and shared understanding.

An enterprise API strategy needs to include:

  1. Goals relevant to the enterprise. APIs are quite universal technology – which is a powerful advantage when addressing multiple goals across the organization.
  2. Reasons to reach the goal. Motivation—a shared understanding and is the basis for creating alignment across various stakeholders—is important but often overlooked.
  3. How APIs help you achieve the goal. The plan should be actionable, but not overly prescriptive on a specific set of steps. The plan translates the goal into action: setting the general, defining the boundaries, and leaving enough room for creativity, innovation, pragmatic problem solving inside the boundary.  

API strategy benefits

An API strategy brings clarity and focus to an API initiative. It aligns stakeholders and creates a common understanding. It is the basis for making your API initiative successful. 

Why are you using APIs?

Your API strategy should provide the answer The goals of an API strategy can be very concrete (such as: “the APIs are a backend for our mobile app”) or they can be more high-level and generic (such as: “APIs are the foundation for all our digital initiatives”). Some companies start with a concrete strategy and then evolve into a more generic strategy later on.

Whether the goals are concrete or generic, an API strategy should answer the questions: "Why do we use APIs around here?" and “What is our approach for creating, managing and publishing APIs?” And it is clear that the answers to both questions need to match—the goal and aspiration on one side and the execution on the other.

Many organizations find success by generating a high-level API strategy that can provide durable, guiding principles, then switch to a more tactical approach in how to execute the strategy. This crawl, walk, run approach helps you keep moving toward the right goals as IT teams and the overall organization have gained more experience with APIs. 


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Effective API strategies align stakeholders

An API strategy gives you clarity and focus for your API initiatives. An API strategy is also a great communication tool. The stakeholders of an API initiative are typically from different parts of the organization: different lines of business, IT, operations, software development, integration, partner management, innovation and many more. In this heterogeneous group, there are many wishes, expectations, and ambitions for the API program and often they are all over the map. The API strategy helps to align all stakeholders of an API initiative—showing the organization’s goals and how APIs contribute to success—and thus strengthen the initiative.  

How Software AG’s webMethods powers your API strategy

Whether your goal is to connect internal systems or create innovative products, APIs are mission critical. Your API strategy affects nearly every aspect of your business and operations. But speed should not come at the expense of delivering secure, high-quality APIs.

Software AG’s webMethods helps you balance speed, quality and security right from the start, so your company can create APIs quickly and at scale, without introducing security risks. webMethods offers a platform to make your API management strategy robust, flexible and complete:

  1. Use a single API platform to save resources in terms of training, time and cost. webMethods is an award-winning, unified, enterprise-grade API management platform that simplifies how IT supports the business.
  2. Support the full API lifecycle from design to development. webMethods gives you end-to-end DevOps automation and centralized management of APIs, gateways, microgateways, microservices, and service meshes in the cloud.
  3. Embrace an open API ecosystem. webMethods is built on open standards, and pre-integrated with common ecosystem tools and technologies.
  4. Launch an API marketplace to distribute and monetize APIs. webMethods has its own Developer Portal for the design and maintenance of an API Marketplace that benefits API providers and application developers alike.
  5. Ensure lock-tight API security. webMethods comes with advanced user-based security, data validation and masking as well as threat protection and throttling, with easy-to-configure settings via the API Gateway
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