Accelerate Your Digital API Program White Paper

Innovation Labs

Abhishek Seth

Abhishek Seth is an Associate Consultant in the API Program within the Research and Innovation unit at Tata Consultancy Services (TCS). He has over 10 years of experience in the IT industry in strategy and marketing. He has worked in diverse areas such as business analysis, alliance management, digital solutions, APIs, and the Internet of Things (IoT). Abhishek holds a BTech in Information Technology from UPTECH University and an MBA from XLRI Jamshedpur.

About the Author

Application Programming Interfaces (APIs) are enablers of an enterprise's business model transformation. They allow externalization of enterprise assets, thus paving the way for an open innovation ecosystem. Enterprise assets can include data, product functionalities, capabilities, and services that help to differentiate the enterprise in the marketplace.

By extending the reach of their assets and leveraging their external partner and developer ecosystem, enterprises can create new products and services. APIs are helping organizations like Google, Twitter, and Facebook to more quickly tap new markets, business channels, and revenue streams. A coherent API strategy will allow large companies to experiment with and develop APIs quickly, based on feedback and learning. Thus, APIs enable agility even in large organizations.

We have observed that older enterprises find the API route to digital transformation difficult. New businesses are 'digital by birth' and use APIs with ease. On the other hand, older businesses are just beginning to understand the value of investing in API programs.

This paper explores how enterprises should ideally manage an API program within the company for effective digital transformation. We believe a three-pronged approach that defines the strategy, operations, and change management processes will lead to smoother adoption of the API platform.

Abstract

Contents

The Rise of APIs 5

An Enterprise API Strategy 6

Effective Operationalization 6

The Need for Change Management 8

Innovation for Competitive Advantage 8

The Rise of APIsAPIs are not new to enterprises. But so far, they have largely been employed in a tactical and ad hoc manner for specific internal projects. With increased adoption and success stories of consumer APIs, such as those from Facebook, Google, and Twitter, enterprises are attempting to adopt APIs as strategic assets.

The reasons for adopting an enterprise API program are not far to seek:

n Enterprises are moving to digital platforms.

n The employee base of most companies has an increasing percentage of Gen Y people.

n Like customers, employees also want more processes on mobiles.

n Reusability of APIs enables agility and allows enterprise IT to create new applications quickly.

Enterprise APIs deliver the means to open new global markets, business channels and revenue streams; to save costs and strengthen engagements with partners and other domains; and to move to cloud-based operations and provide channel-agnostic services (see Figures 1 and 2).

While there are enough benefits that can accrue from enterprise APIs, the risks must also be clearly understood. The chief risk involves exposing databases and processes to too many people. Unless there is adequate planning, proper protocols, and employee education, an API program is going to make slow progress.

5

[1] HBR, The strategic value of APIs, January 2015, accessed February 2016, https://hbr.org/2015/01/the-strategic-value-of-apis

Figure 1: Success Stories in B2B APIs¹

of Expedia affiliate network's $2 billion in annual revenue is generated by APIs

Salesforce Revenue

Revenue

Others From API

Revenue

Others From API

Expedia Revenue

6

An Enterprise API Strategy We submit that an API program should not be managed in an ad hoc fashion, but should be part of the company’s digital strategy. This calls for:

n Aligning APIs with business goals: The API strategy should clearly outline what part of the API program will be strictly internal, and what will have exposure to partners and consumers.

n Understanding the value of APIs: If business users understand the potential of a good API program, it is easier to find sponsors and patrons within the business to carry the program forward.

n Managing risk: Risk officers need to understand that an API program does not necessarily have to touch sensitive applications. At least 30% of enterprise APIs can be based on applications that do not access sensitive data.

Effective Operationalization API management is the process of creating, publishing, promoting, and overseeing APIs in a secure, scalable environment. It also includes the creation of resources that define and document the API in order to help developers. To manage this effectively, enterprises need to look at a few important aspects (also seen in Figure 3).

Figure 2: A seamless API platform can lead to multiple enterprise benefits

Simplified integration of legacy and modern data

Stronger engagement with partners and vendors

Reduced development cost

Digital Assets

Any Public APIs

Your Internal Developers

Your Private APIs

Your Platform• Data• Information• Services

Your PartnersDevelopers

Your Open APIs

Any Public APIsThird-Party Developer Community

Rapid Apps

Improved operational efficiency

Expanded customer reach

Increased revenue through new business models

Stimulated innovation

Features: An enterprise-level API management solution should include the following features:

n Composition and orchestration: Converting backend services to developer-friendly APIs

n Security: Protecting exposed information assets against attack and misuse

n Identity: Enabling client apps to provide secure, seamless access to backend services

n Performance and lifecycle: Ensuring the availability of APIs for client apps and users

n Developer engagement: Onboarding, educating, and managing app developers

API Gateway: It’s necessary to establish an API platform that provides access to all developers. The core component of a full-featured API management solution is an API Gateway which acts as a proxy so that APIs do not have to directly interact with client applications. The Gateway represents a central point where all the abstracted API functionality is located and managed via a set of governance policies.

While Gateways cover most of the technical features needed for layered API architecture, additional functionality is required to make the APIs themselves user-friendly for developers. This will normally involve integrating a web-based API portal into the Gateway, through which developers can register for APIs, access educational resources, and monitor app/API performance.

Documentation: Enterprises need to create templates for user documentation of APIs. Good metadata helps repeated use of APIs.

Legal Support: The legal team needs to define the fine print on API usage and misuse; this should be published on the Gateway so that there is no ambiguity among stakeholders.

Service Lifecycle: Enterprises should create a robust API service lifecycle with specifications for design of the API, testing, publishing, documentation, maintenance, and risk management.

7

Figure 3: API Management Architecture

API Gateway

Resources/ API

Internal, Partner & Third-Party Developer Communities

Mobile and Web Applications

Documentation

Security

Registration

Caching

Analysis

Representation

Community

Orchestration

Architectural Layers

API Portal

8

The Need for Change Management Enterprise data and applications have been the bedrock of organizational ICT strategy for many years. These assets have generally been accessible only to internal IT departments and R&D teams, with strict controls around external access. IT teams understand the importance of enterprise security, and hence, do not find it easy to adjust to an API economy. Internal IT teams must be apprised of the digital strategy and the risk mitigation steps the API program will adopt.

Employees can be big contributors to a good internal API program. It would be a good idea to check if those who work on legacy systems also understand how to work with APIs. To accelerate digital transformation, enterprises can incentivize contribution and use of APIs. They can also run hackathons to encourage creation of new applications and services. This has the additional benefit of fostering a culture of innovation.

Enterprises may not run rigorous checks on code for internal applications, due to lack of time or other practical concerns. Exposing APIs from such programs is dangerous. APIs that are to be shared internally among groups, and definitely those that are to be exposed to partner ecosystems, must be rigorously tested at the code level.

Innovation for Competitive AdvantageUnlike consumer APIs, enterprise APIs typically require a more interactive business relationship, proactive support, and a deeper engagement model with stakeholders, and the enterprise may not be geared up for these.

An API program brings benefits to a number of stakeholders in an enterprise. It enables application developers to quickly create, secure, control, deploy, analyze, and manage APIs and services for internal or external consumption. They can better manage APIs and understand how they are used. Businesses can also market APIs to developer communities (private, partner, and public) worldwide. IT operations staff can easily manage and upgrade the API environment with the ability to monitor and scale without disruption to service.

An API management platform can provide a complete solution to overcome the challenges of managing enterprise APIs, thus allowing an enterprise to attract developers and partners. Such a platform will provide documentation, tools for seamless onboarding, testing tools, and support and collaboration tools to foster communication and handle issue resolution. It will also create the infrastructure that an enterprise needs to benefit from external developers without undue risk. The right API platform can transform an enterprise’s business model and give it a competitive edge.

All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / information contained here is correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. Copyright © 2016 Tata Consultancy Services Limited

IT ServicesBusiness SolutionsConsulting

Subscribe to TCS White PapersTCS.com RSS: http://www.tcs.com/rss_feeds/Pages/feed.aspx?f=wFeedburner: http://feeds2.feedburner.com/tcswhitepapers

About Tata Consultancy Services (TCS)Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match.TCS offers a consulting-led, integrated portfolio of IT and IT-enabled infrastructure, engineering and

TMassurance services. This is delivered through its unique Global Network Delivery Model , recognized as the benchmark of excellence in software development. A part of the Tata Group, India’s largest industrial conglomerate, TCS has a global footprint and is listed on the National Stock Exchange and Bombay Stock Exchange in India.

For more information, visit us at www.tcs.com

TCS

Des

ign

Serv

ices

I M

I 04

I 16

About TCS’ Innovation Labs

Established in 1981, TCS’ Innovation Labs address real-world business problems, bringing scientific rigor to the study of computational concepts, and delivering solutions that make computation more reliable, efficient, and agile for our clients.

With a focus on three key aspects—Software, Systems, and Applications Sciences—our Innovation Labs build on new ideas to create solution frameworks that deliver high business impact across domains. Our Co-Innovation Network (COIN™) gives our clients access to potentially disruptive technologies through our partnerships with emerging technology companies, venture funds, academic research units, multi-lateral bodies, and Tata Group companies.

The global network of Innovation Labs is equipped with sophisticated infrastructure to support leading-edge research. Our researchers file over a hundred patents each year, and our research-based papers are a recognized voice on global thought leadership platforms. Our breakthroughs have won several industry awards, including the MIT Technology Grand Challenge Award and the Stockholm Challenge Award.

ContactVisit TCS’ Innovation Labs page for more information Email: innovation.info@tcs.comBlog: Research and Innovation