APIs are a boon for organizations. API adoption streamlines information sharing across the company. APIs foster better collaboration among the stakeholders. They also ease the decision-making process for top executives. However, with the increasing adoption of APIs, API management’s burden overwhelms the senior management with additional responsibilities.
When considering an API-led digital transformation for your company, you, as a business leader, have to focus on streamlining the management and governance of APIs. It also extends to a set of OKRs to drive business outcomes via APIs. Like any enterprise-wide initiative, the top management drives API adoption. But how can you steer your way through this transformation?
Through this blog post, we try to address this very question. First, we set the context in terms of the CxO roles responsible for driving API adoption. In the subsequent sections, we cover the aspects related to the key responsibilities of the senior-level leadership for effective API management. Finally, we address the API driven metrics that move the needle toward more significant business outcomes.
Table of Contents
- 1 The various stages in the API management lifecycle
- 2 CXO roles for API management within the enterprise
- 3 Critical responsibilities of CXOs for effective API management
- 4 Key business metrics impacted by API-led transformation
The various stages in the API management lifecycle
Before going further, let’s do a quick recap about the API lifecycle stages based on the principles of API governance. This helps us understand the personas that act as the primary touchpoints for every API.
API BUILD: API Build stage involves a process leading to the publishing of an API. These are a series of events. It starts with the initial idea, then to the design of an API, all the way until its launch. The tasks performed under API build are the responsibilities of the API creator. API creators are individuals or a team responsible for the design, development, and maintenance of API.
API MANAGE: API Manage is the stage where an API’s day-to-day activities get monitored and enforced. This is where the API spends most of its time. A dedicated API governance team manages all the activities.
API CONSUME: The API Consume stage involves all the actions taken by an end-user who wishes to consume an API. This end user is the API consumer. API consumers can be internal to the company or external. In the case of an external API consumer, it may be a partner or a customer. Accordingly, APIs are classified as an internal, partner, or third-party APIs.
The goal of the C-level leadership of a company is to strategize and design the API life cycle processes. Regulating access to APIs through various touchpoints also comes under this scope. It is a decisive role. Depending upon how things are handled, it can have far-reaching ramifications with increasing API adoption.
Let’s discuss the most significant roles of the C-level executives, which are chiefly responsible for driving the entire spectrum of API management and API monitoring processes, in line with the business objectives.
CXO roles for API management within the enterprise
The API creators, API governance team, and the API consumers are all part of the ground-level execution personas driving the API adoption. Without the API creator and API consumer, there is no supply and demand for the API’s services. And without the API governance team, there would be chaos in managing the changes related to API versions and access permissions. Seamless collaboration between the different personas of this execution engine, via API management software, is the key to a successful, enterprise-wide API adoption.
From a top-down organization hierarchical view, the execution engine gets strategic directions from a few C-level roles.
Essential CxO roles
CIO (Chief Information Officer): A top management executive holds the CIO role. This person is responsible for the organization’s IT strategy and implementation. More specifically, the CIO’s job function involves designing the IT processes and support framework that aligns with the organization’s processes and business goals. Additionally, the CIO is also responsible for the deployment and management of the IT assets and infrastructure. This ranges from computer hardware to software, and other peripheral assets and accessories. CIO acts as an enabler for a closed knit coordination between the three execution personas of API adoption within the IT framework. The CIO never manages them directly. However, there may be certain situations where the API governance team reports to the CIO.
CTO (Chief Technology Officer): This role provides the organization’s overarching technology direction. The CTO works in conjunction with CIO to govern the technology adoption for the organization’s IT systems. Specifically, the CTO is also the chief architect of the technology stack, platforms, and systems. The same goes for supporting the API adoption through a robust API management technology stack. Additionally, the CTO needs to have a strategic vision for nurturing the API ecosystem.
Additional CxO roles
CFO and Other Roles: There are also other C-level roles holding some of the organization’s critical functions. These mainly include CFO (Chief Finance Officer), COO ( Chief Operations Officer), and CINO (Chief Innovation Officer). These roles do not have direct involvement in API management; however, they have a specific indirect responsibility on the API governance side.
For instance, the CFO would be interested in the money spent on managing the API management platform. In case of API consumption from third-party APIs, someone from the CFOs team, ideally the financial controller, will track the cumulative subscription costs. This person would closely coordinate with CIO and CTO to allocate budgets. Similarly, the COO might be responsible for the APIOps team accountable for the API governance. In smaller organizations, the APIOps can be managed by the CIO’s office. However, for large enterprises with diverse operational challenges, all operations teams may report into the COO organization.
Middle management roles
There are also specific middle management roles that influence certain aspects of API management, both in terms of strategy and implementation. These include the positions of Director of software engineering and R&D department head. Both these roles have a direct or indirect reporting line to the CIO/CTO. However, their scope for API adoption will be limited to a business unit or an internal project.
Critical responsibilities of CXOs for effective API management
Streamlining API management is a continuous process. It needs to deal with the day-to-day changes and dynamics of the API governance. C-level management has a critical role in driving this initiative. Their teams must be aware of the strategic direction. Together, they must work within the realms of the organizational policies to deploy and maintain API management software. Additionally, they must also be observant to take notice of fraudulent practices in API adoption.
Based on the most critical C-level roles involved in API management, let us elaborate on their specific responsibilities.
Responsibilities of the CIO’s organization
For CIO, APIs are like the superhighways that help the information traverse from one department to another. As much as it is required to eliminate information exchange barriers, it is equally important to restrict it to authorized personnel. Maintaining this balance is the biggest concern for the CIO.
From the API management perspective, here are the key responsibilities of the CIO organization.
- Ownership of the API governance process: It is the CIO organization’s responsibility to ensure that all the APIs and their usage follows a strict constraint, both within and outside the enterprise. These constraints further expand into users, roles, and access control rules. All of these are bound together with a set of policies. These policies are defined by the CIO organization, within the ambit of the IT policies. However, the enforcement and monitoring of policies is the responsibility of the API governance team.
- Maintaining SOPs for API change management: As per the API lifecycle, many change events can happen during APIs’ life. Updating the policies for APIs also results in change requests. All the standard operating procedures (SOPs) about any change in APIs or the API governance processes are the responsibility of the CIO organization. Even in this case, the actual execution of the change request is carried out by the API governance team. However, the CIO organization must review and approve all the changes.
- Review of API build and API consume steps: Setting up a new API, either for publishing or consumption, also must go through an approval process as per CIO’s behest. In some ways, these can also be treated as change events. Hence SOPs must be defied and routed through the CIOs organization.
- Periodic auditing and compliance checks: This one is probably the most significant pain point for any CIO. The CIO organization is directly accountable for any events leading to leakage, breach, declassification, stealing, or unauthorized access to information. Therefore, it is vital to set up an independent team within the CIOs’ control to strictly monitor and conduct audit drills on all APIs to adhere to the IT and security policies. Further, if the company is rated for specific data security standards, all published APIs must be explicitly audited for compliance. Declassification of sensitive information through APIs demands special attention. These include, but are not limited to, PII (Personally Identifiable Information) data, IP (Intellectual Property), or trade secrets.
- API monitoring: For CIO organization, API monitoring covers a broad spectrum of activities such as:
- Access and Usage: Monitoring the user profiles accessing the APIs based on their team, department, or roles.
- Information Security: Monitoring APIs for safeguarding the boundaries of Information traversal.
- Governance Policies: Monitoring the API management policy changes to ensure that they adhere to standard guidelines. This task may also extend to monitoring the activities of the API governance teams.
- Approvals for third-party APIs: If third-party APIs are allowed as part of the API adoption strategy, then such APIs must go through the CIO team’s scrutiny. Inducting these API within the enterprise has all the risks associated with information security. Robust SOPs must be in place to review and approve all third party APIs.
Rakuten RapidAPI Enterprise Hub is a one-stop solution that enables the CIO organizations of an enterprise to define and implement successful API management strategies. Whether they want to implement access policies for discovering and connecting to internal APIs or subscribe to third-party APIs, the Enterprise Hub gives them total control over the API governance, access, and monitoring of the API lifecycle. It also leverages the Rakuten RapidAPI marketplace, the world’s largest API marketplace with over ten thousand APIs.
Responsibilities of the CTO’s organization
The CTO has a pivotal role in spearheading the adoption of APIs. The CTO organization defines the API ecosystem and its specifications. It ensures that everybody involved in the API BUILD and API CONSUME stages adheres to these specifications.
Broadly, the responsibilities of the CTO organization revolve around the following aspects.
- Shaping the API ecosystem: For large scale API adoption, it is crucial to view APIs in the context of an ecosystem. An API ecosystem is a virtual registry of APIs that can be tagged to indicate some form of logical grouping or association. Both API creators and API consumers collaborate to create such linkages where APIs are linked or grouped for a specific purpose. There are three ways to look at this concept that fosters API ecosystem development:
- Platform APIs: One of the problems with large scale IT infrastructure deployment is the lack of standardization due to disparate systems. There is a need to unify these systems in a way such that they inter-operate through a standard specification. A set of APIs providing some common functionality to achieve this synergy forms a baseline platform. Additional APIs are built on top of this ecosystem of platform APIs to provide access to the API consumers.
- Service APIs: Every organization has a few basic services that are required across departments. For example, the HR department can expose certain employee-specific information via an API. Various other departments use this API for employee-related processes, such as compensation revision, or leave approvals. A bunch of such HR-related APIs forms the core of the HR services. Similarly, an ecosystem of other Service APIs can also be created.
- Tool/Utility APIs: We are all aware of the specific tools that we use in our day to day work. Think of the humble desk calculator. Similarly, some APIs act as handy tools for particular purposes. In the context of an enterprise application, if a company does business across the globe, they have to raise invoices based on each country’s local sales tax rates. An API that provides taxation calculation for all countries comes handy in such cases. Mostly, these are third-party APIs. However, as part of the internal API ecosystem development, utility APIs can be published as tools within the organization.
- Providing the technology direction for API backend tech stack: The advent of API adoption brings new technological challenges. One of them is managing the backend hosting infrastructure for APIs. Thanks to the microservices architecture, it is easy to organize and scale the API backend. However, with enterprise-wide hosting of many APIs, there is a need to follow a well-known pattern to build the backend technology stack, which is optimized for scale and, most importantly, easy to maintain. The CTO organization is chiefly responsible for guiding the design and deployment of this stack.
- Overseeing the API Productization efforts: If the company offers APIs as a commercial service, those APIs are exposed externally for customers’ consumption. In such cases, the CTO has an added stake in API productization efforts. The most crucial thing in API productization is API specifications. The CTO organization provides the guidelines for API specs. Additionally, the specs data formats for requests and responses, API versions, and backward compatibility must be ensured. There is also a need for a separate backend tech stack to manage the scale and security issues associated with public-facing APIs.
- Monitoring the health of API: As always, monitoring APIs’ performance is key to the long-term success of API adoption. Unlike the CIO organization, which focuses on monitoring API governance, the CTO organization is more concerned with the technical parameters that determine APIs’ health. Some of the most important technical parameters include:
- Latency: Average response time for an API request.
- The ratio of error vs. success response: Percentage of error responses.
- Cache hits: Number of times the API cache is hit compared to total API calls.
- Outages: API uptime, or the average API uptime.
Rakuten RapidAPI Enterprise Hub enables CTO organizations to define and implement successful API management and adoption strategies. Through single window access to all APIs, the Enterprise Hub makes it easy for the technical leadership to discover, test, and consume APIs with ease.
Key business metrics impacted by API-led transformation
Every organizational initiative boils down to identifying and improving specific business metrics. These metrics form the basis of the objectives and key result areas tracked by the management team.
A successful API-led transformation results in a sustained, far-reaching API adoption that benefits all the stakeholders and external partners. For an objective assessment of its impact, the C-level leadership must direct their focus on the health of a few critical business metrics.
- Business Reporting: Business reporting provides a single source of truth for the various operating and financial metrics about a company’s business. It takes multiple mediums such as dashboards, documents, web pages, and email messages. When it comes to acting upon a change request in business reporting, things can take time. The concerned departments or business units responsible for the change have to figure out the nuances for either capturing additional information or altering the reporting format. With an API, the management of business reporting gets streamlined. The key result areas include faster and more coherent processes for change management of business reporting.
- Team Productivity: With a well-designed API ecosystem within the organization, different teams or individuals can quickly discover APIs for specific needs. This has a direct positive impact on teams’ productivity who rely on different APIs for their day-to-day operational needs. The productivity gains can be measured based on the completion rate of individual activities by employees, before and after the integration with API.
- Process Efficiency: One of the immediate benefits of strong API adoption is the ease of business process automation. Often, different departments or business units have to interact with each other for process adherence. It happens for several inter-departmental processes, or for consultation on a high impact business decision that requires opinions from multiple stakeholders across the board. Whatever the case may be, having an API led approach expedites the turnaround time of process execution by many folds. In this case, the key result area is to accelerate the process execution and faster time to closure.
- Information Delivery: Every organization has various channels for information delivery. In many cases, this mechanism is also closely tied to business reporting. However, unlike push-based information sharing via different reporting mediums, some sharing tools are pull-based. For example, a company may offer an interface to run ad-hoc queries for external partners to build a self-service reporting mechanism, rather than deliver a report. APIs provide a secure and consistent interface for serving such requests. Similar to improvements in change management of business reporting, change management in information delivery mechanisms can also be improved by APIs.
- Information Security Compliance: When there is an enterprise-wide mandate to access certain information only through a secured API, it becomes much easier to audit the information security risks. Compare this with the pre-API era malpractices of ad-hoc data sharing through file transfers, email attachments, or external storage devices. Such situations cause audit and compliance challenges due to the lack of traceability of the source of information. A well-orchestrated API management system enables tracking data back to its API, and the events and operations performed on the API. The overall key result area involves improving the audit process and enforcing traceability of all information so that the compliance SOPs gets expedited.
- Earnings: If API monetization is the primary motivation for an organization, this metric will take precedence over everything else. In this case, a company developing a commercial API would want to track all the business metrics associated with earnings from the API subscriptions. Here, the role of the CEO is also of relevance apart from the CIO and CTO. The CEO drives top-line growth, directly impacting the revenues and profits. In contrast, the CIO and CTO manage the factors that affect bottom-line performance, such as costs, expenses, and margins.