What Is an API, and How Does It Benefit Your Business?

4 min read
May 21, 2024 8:35:24 AM
What Is an API, and How Does It Benefit Your Business?

You’ve probably heard this term many times in recent years, and if you’re not a developer, you probably think: ‘I’ll finally be able to understand what on Earth is that.’ Before giving you a technical definition, I want to make an analogy so you don’t doubt what it is about. I will link it to brain surgery, and you’ll see all the similarities between the two.

See, in the brain, there are different areas specialized in each process that we carry out in our daily lives, such as language, moving our arms, or savoring the food that we like so much. This is due to the thousands of connections that allow the signals and information we need to perform those actions to travel through our neurons.

APIs operate in the same way. Let’s say that a company’s core acts as the brain, its products or services as specialized areas, and the APIs as all those connections or bridges through which all the information travels. They allow two systems or applications from different companies or entities to communicate, thus optimizing an organization's processes and generating benefits for each company and a greater value offer for its customers.

So you don’t have the slightest doubt about what it is about at a functional level, I’m going to tell you which are the most popular public APIs on the market:

  • Google Maps: It allows you to insert maps into your site or application to show, for example, the locations of your points of sale or offices, so you don’t have to develop the functionality from scratch.
  • Google or Facebook Login: You have indeed seen them as a means of registration in many of the applications you have on your cell phone, and it is much easier for the user to log in by this means than having to enter all their data in an extensive form.

As you can see, one of the fundamental pillars of APIs is to start from the premise of a user-centered solution design.

At a technical level, API means application programming interface; it is a set of functions and procedures that perform one or many tasks to be used by other software.

APIs establish the necessary connections between applications or services through an agreement where the minimum conditions required by an application for an actor to interact with it correctly are defined. In this case, as we mentioned, the actors are other applications or services, counteracting the development of new applications and allowing your organization to save time and money.

The terms of the agreement are defined in terms of data and business rules, which are necessary for the application to perform a specific task.

APIs function as a bridge that only allows data worthy of crossing. “You shall not pass!”

Moving on from the definition of an API, let’s focus on understanding how they have transformed the market.

APIs as Economy Accelerators in Companies

APIs are considered new ways of doing business between companies; they are pillars that build connections through agility, innovation, and collaboration to strengthen the experience and value you deliver to your customers. In addition, they open the doors to business opportunities with suppliers and new customers.

When devising our business strategy with technological and digital bases, we come across issues such as integrations or external software that are necessary but complex and not very scalable or moldable. These are the main reasons companies promote their strategy based on APIs, allowing them to meet critical business needs and increase interest in your products, services, and the company itself.

The API Services portal indicates that “companies that use APIs can capitalize on what other companies can offer in the form of services, data, algorithms, and general functionalities. The cost of incorporating an external API within a platform is always lower than developing a new API from scratch, and also avoids having to ‘reinvent the wheel.’” 

The benefits of implementing APIs include reduced expenses on complex integrations, technological independence, increased attraction for your company, consolidation of more efficient processes, and more efficient B2B connections.

APIs can be used in any industry and for thousands of processes; you cannot even imagine connecting a complete ecosystem of solutions based on them.

Learn more about how APIs are a crucial element for data driven organizations.

You can develop use cases based on APIs that open the door to new business opportunities or optimize the operation, accessibility, and information management of the following topics:

  • Products
  • Customers
  • Transactions
  • Payments
  • Security controls
  • Commercial offers
  • Channel opening

Monitoring and analysis of information in real-time, among many more.
With the arrival of smartphones, everything has flourished based on APIs, becoming a fundamental technological key. It is transparent for users but brings significant benefits, such as accessibility to information and process management, to name a few, providing a better experience.

So, why waste time and money on projects trying to invent the wheel if you can save development hours through APIs and take advantage of what has already been tested by other companies and has had successful results? This way, you don’t lose focus on your business, and the value offer you hope to deliver doesn’t lose its value.

This article was written in collaboration with Julián Arcila.

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