In today’s digital age, APIs play a critical role in enabling organizations to thrive. With the rapid growth of AI Agents, the demand for robust and reusable APIs is higher than ever. A scattershot approach to building purpose-built APIs is no longer sustainable. Instead, organizations need to focus on creating a robust set of APIs that support their business purposes.

By strategically leveraging reusable APIs, organizations can reap numerous benefits, including enabling digital strategies, creating efficiencies in development and governance, supporting AI and human consumers, increasing customer engagement, and enhancing organizational flexibility and nimbleness.

API Reuse Benefit 1: Enabling Digital Strategies

Most digital strategies focus on:

1. Platform plays
2. Marginal gains on existing products and services
3. Releasing digital products and services
4. Re-bundling and customizing existing products and services
5. Opening or increasing use of digital distribution channels
6. Using digital technologies for cost-efficiencies (e.g., automating processes and/or applying AI)

All these strategic directions rely heavily on APIs. It is important to consider not whether you need APIs (you will), but how your digital strategy informs and prioritizes the resources you want to expose and how you want to market these APIs.

The revenue for Google’s Map API is close to $1 billion annually. Clearly, if you can tie revenue to your APIs, you will want to prioritize this development.

If you are faced with channel partners that you can’t access or customers who won’t do business with you due to your lack of APIs, this is another priority to consider.

As companies adopt AI Agents to automate processes, an inability to deploy agents due to lack of accessibility to underlying resources will negatively differentiate companies that remain less nimble and flexible.

API Reuse Benefit 2: Development and Governance Efficiency and Quality

API development, especially when creating high-quality APIs, is a non-trivial exercise that requires significant investment. Organizations that don’t align on a strategy of developing reusable APIs often end up with a collection of point-to-point, one-off APIs that frequently expose only a portion of a resource and often have attribute names and descriptions that are inconsistent with each other.

What this represents in costs is an n-times the initial development cost. Maintenance costs are also multiplied by each redundant API. Less visible are costs associated with explaining the semantics of each API to each consumer, the costs of consumers trying to determine which API is best suited, and the multiplied governance costs and lifecycle maintenance costs.

Instead, by focusing on high-quality resource APIs that are designed from the outset for reuse, organizations can lower the initial development costs. Maintenance is subsequently focused on keeping the API in sync with changes to the underlying resource and continuously clarifying the API specification to enable consumers to be self-sufficient.

The reusable API also promotes simpler governance processes and improves API lifecycle management. Instead of a bunch of low-use APIs that everyone has forgotten about, API product managers can see when their API consumption is falling and take actions to improve the API or sunset it.

API Reuse Benefit 3: Supporting AI And Human Consumers

It is apparent that AI Agents are rapidly going to become a tremendous consumer of APIs. Like human consumers, the API producer wants to make their APIs as understandable and self-documented as possible. At the same time, some organizations and development situations will still rely on human developers. Organizations don’t want to slow down either type of consumer by having to create a new API. Nor do they want to incur the costs of developing new APIs to support AI Agents.

It seems evident that API specifications are going to evolve to support AI Agents. However, it is recommended that providing the highest-quality, reusable APIs to as many consumers as possible will allow developers to focus on evolving this smaller subset rather than diverting resources to maintain a large body of lower quality, redundant APIs. Additionally, you want to get your AI Agents up and running as soon as possible. Developing new APIs only slows this process down rather than directing your agents at the reusable APIs you already have.

API Reuse Benefit 4: Increased Customer Engagement

APIs have often been viewed as merely tools for IT to connect systems. While they are indeed excellent for integration, one of the greatest values of APIs lies in exposing them to your customers and their software providers.

By using your own APIs to build web applications, you can create user experiences that some of your customers will appreciate. However, none of them enjoy having to switch between their internal applications and your web application. Instead, by exposing APIs that they can integrate into their processes or that their software providers can integrate into their products, you enable your customers to become more efficient. This increased efficiency makes them more willing to use your services.

Additionally, integrating your APIs into their environment builds a certain “stickiness” in your relationship. Once your customer has integrated your APIs, switching to a competitor’s APIs may not be worth the cost and effort. This creates a strong bond and loyalty, ensuring long-term customer engagement and satisfaction.

API Reuse Benefit 5: Organizational Flexibility, Composition and Nimbleness

Many organizations struggle with changing their processes to control costs or increase turnaround times. Once process changes are identified and new organizational structures and processes are defined, organizations are often constrained by the limitations of their IT systems. Interestingly, the underlying resources required for these process and structural changes tend to remain relatively stable. For example, if you are selling insurance, a policy is still a policy that needs to be created.

Organizations that have exposed their resources through high-quality, reusable APIs can create new business processes that consume these APIs in innovative ways, especially with the rise of AI Agents. This approach allows for greater flexibility and adaptability. A prime example of this is Amazon, which implemented an API mandate in 2002 and has since demonstrated remarkable nimbleness and composability.

By leveraging reusable APIs, organizations can quickly adapt to changing business needs and market conditions. This not only enhances their ability to innovate but also improves their overall efficiency and responsiveness. The ability to compose new processes and services from existing APIs enables organizations to stay competitive and meet the evolving demands of their customers.

Summary

To maximize the flywheel effect of API development, organizations must look beyond mere integration. Instead, they should focus on the underlying resources being exposed and how these can be leveraged both internally and externally. By adopting an “outside-in” perspective, organizations can identify opportunities to expand API usage, strengthen relationships, and create new opportunities.

Analyzing the current API landscape is crucial. Organizations should consider how AI Agents can create new processes, identify gaps in resource accessibility, and evaluate the potential gains from exposing APIs. Additionally, it’s important to assess the total cost of API development, including the opportunity cost of maintaining redundant APIs, and to focus on creating a richer API environment.

By consolidating around the best resource APIs and making them available to all consumer types, organizations can maximize flexibility, engagement, and attractiveness to business partners. While it may not be easy work, an API strategy that focuses on reusable APIs aligned with business objectives will generate the flywheel effect for organizations.