API Management in 2024: Top 3 Benefits & 4 Use Cases

APIs have become essential tools for software ecosystems, promoting innovation both within and outside of an organization. It is estimated that 90% of developers rely on APIs.

As APIs become more prevalent, API management is becoming crucial. This article explores API management, its components, benefits, and use cases.

What is API management?

API management is developing, publishing, securing, and managing API connections in an enterprise and multi-cloud environment. Companies can share and connect API setups through API management while regulating access, gathering and analyzing usage data, and implementing security standards.

Figure 1: Simple representation of API management

Why is API management important?

By enabling developers to access a partner company’s software, services, code, or data, APIs can help businesses improve the quality of their products. However, companies need to appropriately manage APIs to get the most out of them. 

API Management tools help companies secure data and user information transferred over APIs, achieve workflow automation, and promote data-driven growth.

What are the components of API management?

While API management methods can vary from organization to organization, the following components are included in a typical API Management solution: 

• Gateway: An API gateway is the entry point to other connected systems and services. It handles all routing requests and protocol translations between clients and the third-party services they’re connected to. 
• Publishing tools: A set of tools used to create APIs according to certain specifications. Publishing tools help create API documentation, control API usage through access and usage rules, test and debug API execution, and security testing. 
• Developer portal/API portal: A developer/API portal’s main objective is to give developers a central location to access and share API documentation. Developer portals enable developers to quickly browse, create, and test their APIs while facilitating team communication.
• Reporting and analytics: API management platforms track APIs availability, response time, and general performance. These can include the number of completed transactions, compute time and the volume of data transferred.
• Monetization: There are several monetization models, and companies can benefit from them according to their needs. Monetization as a component of API management helps businesses make money by ensuring high-quality value to API users. 

Figure 2: Representation of monetization strategy

3 Benefits of API management

Figure 3: Simplified version of API management process

1. Data security

Research shows that APIs benefit businesses by allowing them to access enterprise services from various devices, acting as a platform for innovation, and opening new revenue streams. However, during such processes, they may leave data transformation vulnerable. Over 90% of organizations had an API security incident in 2020, which is why they need to be protected and appropriately managed. 

API management platforms provide security by tracking API usage and initiating the integration of security protocols such as OAuth, OpenID, and JWT. API management can provide additional security benefits by regulating access to applications. 

2. Workflow automation 

API Management simplifies API-related tasks by enabling businesses to automate a range of operations. Workflow automation and simplification frees up time that can be used for more productive tasks that promote organizational growth.

3. Promoting data-driven decisions 

API management platforms provide businesses with comprehensive analytic tools that facilitate data-driven decisions. Data-driven decisions will lead to data-driven growth, which will improve the components of a company. Data-driven decisions can improve the conversion rate by 2.5 times and annual recurring revenue by 2%-4%.

API management tools enable data-driven decisions by: 

• Assessing channels for data transfer before evaluating business problems, reducing up-front analysis. 
• Ensuring that data remains encrypted by providing data first monitoring. 

Top use cases of API management

API management for supporting digital transformation and providing agility

API management provides agility by enabling smooth connections between digital assets and enabling companies to switch between multiple channels without much effort. API management tools can help growing businesses accelerate their operations, which will help them manage the growing scale of day-to-day activities. 

Companies can adopt API management solutions to track API connections from a centralized platform. This will help them achieve innovation by supporting new business models, reducing costs, and opening up potential benefits for the customer and the business itself.

Businesses can also utilize API security tools to conduct vulnerability scans and protect their APIs from cyber-attacks.

Figure 4: Representation of the use case of the API manager

B2B integration

Business to Business (B2B) integration via API management is the automation of communication and interaction processes of multiple organizations. B2B integration allows companies to work with their partners and reach customers more efficiently. 

API management tools are helpful for B2B integrations since they can provide data-level integration, allowing organizations to switch from paper to digital. Data-level integration enables an organization to pull in both internal and external data for easier processing.

GDPR Compliance 

According to IBM, API gateways are essential to address and comply with GDPR requirements when transmitting large volumes of data. With proper API management, administrators can maintain access control over integrations, achieving the GDPR compliance standards more easily. 

API integration

API integration provides data integrity and ensures that connected applications represent the most recent data. API management helps the process of API integration as it utilizes APIs to connect multiple apps so they may work together to execute a single task. Each application’s API layer serves as a connection, allowing the programs to communicate while performing a task.

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