The acronym ‘API’ is ubiquitous in modern corporate life, but its meaning can sometimes be ill-defined and hard-to-understand.
An Application Programming Interface (API) is a way that two different computer systems can send information between each other. The term ‘API’ is typically used to refer to web APIs, which allow different computer services to communicate with each other over the internet.
As organisations seek to digitally transform and streamline processes, APIs have become an increasingly popular method to enable seamless integration between systems.
The structure that should be used when data is sent and received is called the API specification. Computer systems, unlike people, require carefully structured data to communicate with each other. For example, if a shop owner was talking to their supplier over the phone to order more stock, it would not matter whether they said, “the number of apples I want is four” or “the quantity of apples I want is four”. However, if the shop owner used an automated service to re-order, it would be vital that the shop owner’s system sent the data to the supplier’s API in the exact format that the suppliers API specification defined.
If the API specification states that the number of apples to be ordered should be sent with the name “numberOfApples”, then sending the data on the left will result in four new apples being ordered, and sending the data on the right will result in a process-halting error message.
In this example, there is only one shop owner and one supplier, so the issue of coordinating the structure of the data is not so large. But what happens when the shop owner wants to use multiple suppliers? And the supplier has multiple customers? This is when it becomes crucial to have industry-agreed standard API specifications on how specific types of data will be sent back-and-forth. With that in place, any number of shops and suppliers can be certain that the system that they develop will be compatible with the others, if they follow the specification.
APIs therefore unlock a great deal of potential for organisations by allowing their systems to integrate with third-parties, or other internally built systems in ways that may otherwise have required a large manual intervention. In the shop owner example, they only wanted to order apples.
Imagine instead that they had a list of 200 items to order or that they were a financial institution that wanted to send a year’s worth of transactions to an adviser to feed into a client’s annual review. That would be a long phone call. Therein lies the power of APIs - when we create an effective way for different computer services to integrate with each other, they can do so at an unparalleled scale. This allows for greater productivity, efficiency, and much faster innovation.
