This is achieved by having a very well defined and robust set of rules around how requests between components are made and the type of responses that will be received. This removes the need for an organisation to provide broad access to its infrastructure to third parties. Instead they expose well defined product-like interfaces for secure access to valuable capabilities and data.

Requests are made via an API which has been designed to deliver particular subsets of information. Each party understands why the request is being made and precisely what data will be delivered.

What is often less understood, however, is the potential value of these APIs. When designed to provide automated access to particular digital resources, they essentially become new products that can be promoted and monetised.

Third parties will willingly pay to access APIs that deliver value to their operations. This, in turn, creates a new ongoing source of revenue for the organisation.

Building an API economy

Successfully monetising APIs requires a carefully planned strategy. Each steps needs to be undertaken to ensure that relevant data is made available in a way that can be readily put to work by the external third-party customer. The six key strategic steps are:

1. Understand the value being delivered:

Before beginning the process of developing an externally accessible API, it’s important to fully understand the value it will deliver to users. Take time to understand the way in which it will be used and how the data being accessed will be put to work.

It's also important to recognise who the target users will be and the types of applications they will be using for access and processing. Also determine the operational metrics that will be required and ensure the API is capable of consistently meeting them.

Some of the questions that will be asked during this initial step will be very similar to those asked before the launch of a new product. This is because the API will become a new product.

2. Pay close attention to design:

Once the purpose of the new API has been clearly established, attention then needs to shift to its design. When a new product is developed, time is spent determining the ideal user experience. Before a single line of API code is written, the team should engage in the same process.

By ensuring the development team creates a detailed design document at the start of the project, it will lead to the API being fully documented for potential integrators. This is particularly important when it will be used by external parties.

3. Undertake the entire API lifecycle:

Just like any other piece of software, an API has a lifecycle. This includes design, implementation, testing, deployment, publishing, maintenance, troubleshooting, and updates.

The development team should begin with design, but then prioritise testing before proceeding to implementation. Once some portion of the API is built and tested, it will be time to deploy some API endpoints.

The final step is to ensure that developers can find the API to begin consuming it.

4. Assign the API a product owner:

As with any product being offered to the market, it’s important to ensure the new API won’t be forgotten or neglected once it has been released externally. Assigning a product owner will ensure the API receives the ongoing attention and resources it will require to function efficiently at all times.

5. Monitor the user experience:

Once the API is being used by external parties, monitor the experience they are having. Consider whether they have been able to connect to all their required systems and are obtaining the speeds needed to complete their jobs.

Delivering a satisfactory user experience is vital for the long-term monetisation of all APIs, and so it needs to be conducted on an ongoing basis.

6. Continuously improve:

As with any product brought to market, the process of improvement is continuous. The same holds true for APIs. When monitoring usage, determine how the API could be further enhanced and therefore be able to deliver even greater benefits to users.

An API-led future

APIs will continue to add significant technical and business advantages to organisations that deploy them. At the same time, they will become more widely used by external organisations.

By taking the time to assess how APIs could be used by others, new revenue streams can be found that could prove to be very lucrative over time. Consider how your organisation can expand its use of APIs.