The Pros and Cons of Open APIs in Businesses

Published on
30/11/2023 11:13 AM
open apis

Businesses are constantly seeking ways to be more efficient. To improve their organisational connectivity, many are using Open Application Programming Interfaces, also known as Open APIs. 

Open APIs enable businesses to bridge gaps between different systems. This allows for improved integration and data sharing. And every organisation knows how important data is in business.

Open APIs let software applications talk to each other, making them excellent digital gateways. Businesses can provide exceptional customer experiences while improving internal processes. Before we delve further into the pros and cons of Open APIs, we’ll first look at what they are and where they came from. 

What Are Open APIs?

Modern businesses rely on interfaces to connect platforms and applications, and to ensure seamless communication between them. Open Application Programming Interfaces, or Open APIs, have revolutionised how independent software systems interact and share their data. They use formats that machines can read for requests and responses. Essentially, they let you link different software without accessing source codes.

History of Open API

Open APIs aren’t a new concept. Since the internet and web services began, there was a clear need for a translation system to integrate different systems. 

The early days saw the likes of Simple Object Access Protocol (SOAP) and XML-RPC. The start of the 2000s saw Roy Fielding’s Representational State Transfer or REST architecture. This was a big event in Open API development. The RESTful APIs used standard HTTP methods so they were easy to use and scale. 

As technology developed, so too did Open APIs. This has made them more secure and more widely used. They are now everywhere and connect services, apps, and platforms in many ways. According to statistics, as of 2020, developers are spending just under one-third of their time coding APIs.

Image sourced from Statista 

Open APIs: An Example Use Case Scenario

Imagine an inbound call centre where customer interactions are integral to the business. Call centre marketers use automation to send marketing to possible customers using the CRM system. The purpose here is to see who is interested in a particular service or product. 

Customers then convey their level of interest. As customer responses come in, they’re logged with a ticket. 

Thanks to Open API, sales agents can receive real-time alerts digitally when customers express an interest. The agent can then select the customer within their CRM system to access their account details and call them.  means the conversation is much more personalised. 

The Open API technology means the sales agent doesn’t need to exit the interface to do this. They can respond immediately on the same interface armed with the personalized customer data provided by the CRM. This makes for a more streamlined, personalized approach with no need to switch between different applications. They can simply click the customer’s profile, which will start a call with the customer. 

The system can then facilitate follow-ups for later should the customer not be interested or available. Set with alerts, the agent then won’t miss the opportunity to try again later. 

If a sale is achieved, the Open API sends a text, email or other chat link to the customer so they can pay for their service or product. This makes it easier for everyone to collect payments and improves the customer’s experience. 

At the end of the transaction, the system will trigger a customer satisfaction survey for feedback. This helps with improvement and direction. Plus, Open APIs can help you deliver call quality monitoring best practices to further improve customer satisfaction. 

As we’ve seen in this example scenario of a call centre, Open APIs have an important role in the efficiency of marketing and sales agents. The APIs help them provide excellent service, making customers happier with smooth integration and communication. 

It’s no wonder that so many businesses praise APIs for improving customer experiences and driving innovation. 

Image sourced from Google Cloud

The Advantages of Implementing Open APIs

Our example scenario has already hinted at a number of advantages of implementing Open APIs but there are plenty more. Let’s explore all of the benefits of using these within your business.

Enhanced Connectivity

Open APIs allow for seamless integration among different platforms. This means data sharing is much easier and organisations can enjoy cross-functional collaboration. Like all business foci, this enhanced connectivity creates a greater ROI as the costs of an Open API are less than the profits gained by their implementation.

Improved Customer Experience

As our above example demonstrated, Open APIs serve to improve the experience for the customer. With their features, businesses can quickly adapt to customers and improve services and sales support. This leads to increased customer satisfaction.

Scalability and Innovation 

Open APIs are flexible, which makes it much easier for businesses to scale and adapt. Businesses can readily integrate new tools and resources. Scalability in cloud computing is particularly important as it accommodates the fluctuations in demand that are prevalent in the current landscape.

Being adaptable also means it’s easy to set up remote PC software, distributed teams, and virtual call centres.

Clear Documentation 

When APIs are well-documented, the process of integrating them and understanding them is simplified. In turn, there are fewer costs associated with their implementation. Clear documentation also makes it easier to make workflows properly integrated.

Governance

Open APIs help to ensure compliance with regulations and internal governance. These often have strong security measures to make sure only authorised users can access them. There are also frequently used encryption protocols to ensure data transmission is secure. Some providers get GDPR certifications to show that their API follows compliance standards.

Language-Agnostic

By their nature, and because of what they’re designed to do, APIs are language-agnostic. This means they’re designed for developers regardless of the programming language used. This supports accessibility, global connectivity, and widespread integrations.

Wide Adoption

Because Open APIs have been adopted widely, this has led to a wealth of associated expertise, tools, and resources. So, you’re comfortably supported when it comes to learning about and executing Open API implementation. 

Tools and Features

The resources and features of Open APIs mean that organisations can adjust their workflowsas they go. This enhances the customer experience and allows for real-time adjustments to be made, optimising performance and productivity.

 

Free to use image from Pexels

The Disadvantages of Implementing Open APIs

Though the advantages of implementing Open APIs are many, there are also some drawbacks. Organisations need to be aware of the potential challenges they may face when they implement Open APIs. Here are some of the main considerations.

Security Concerns

One of the biggest concerns for many businesses is security. Open APIs may have bugs or security issues that leave your network vulnerable to risks, such as unauthorised access and data breaches. Robust audit trails are essential in mitigating these risks — here’s an audit trail definition to help you understand them a little better.

Third-party Service Dependence

When an organisation relies on external APIs, they are relying on a third-party service. This can expose them to risks like service interruptions and data loss. They also need to bear in mind what would happen if the third-party API is no longer available in the future.

Privacy Issues

When dealing with customer data, it is essential to follow data privacy regulations. Implementing Open APIs might raise concerns here if you’re using a third-party service. 

Non-Visual

By their nature, Open APIs aren’t visual; there is no user interface to interact directly with the API. This creates a challenge for developers when it comes to troubleshooting.

Non-Hierarchical

Often, Open APIs aren’t hierarchical. This can complicate the data structures and systems within an organisation. Data can become challenging to navigate and more complex to retrieve.

Common Open API Integrations

In the past twenty years, Open APIs have become necessary to achieve cloud connectivity, connect software systems, and share data. Here are some examples of the most common integrations:

Payment Gateways

Open APIs facilitate payment gateways on e-commerce platforms. Customers can make secure payments easily using services like PayPal that enable secure transactions. 

Social Media

Open APIs allow businesses to leverage the power of social media platforms to interact with their audiences and share content. They also facilitate user data analysis, which is vital for marketing.

Free to use image sourced from Unsplash

CRM Integrations

CRM systems, as seen in our example, benefit from Open APIs to connect them with other useful business tools. For instance, a CRM integrated with an email marketing platform allows customer data to synchronise to targeted and effective marketing.

Geolocation and Mapping

With open APIs, businesses can embed geolocation services into their applications. This is invaluable to ride-sharing apps, location-based marketing services, and delivery services.

Cloud Storage and File Sharing

Through Open APIs, cloud storage providers like Dropbox can facilitate file sharing and storage. So, users can access files from anywhere in the world with reliable cloud connectivity.

Chat Boxes on Websites

Chat boxes on websites have become commonplace. These allow businesses to engage with their customers — and vice-versa — in real time thanks to cloud communication

In fact, many businesses choose to utilize CPaaS (Communications Platform as a Service) solutions. This enables them to engage in real-time chats and tap into conversational commerce opportunities.

Not only does a CPaaS provider deliver unrestricted customizability, but you can choose specific APIs to integrate based on your unique communication needs.

Final Thoughts on the Pros and Cons of Open APIs

It’s clear that Open APIs have become indispensable for modern businesses. They enhance connectivity, offer flexibility, and foster innovation. 

However, organisations should be aware of the challenges. Although they help share data and scale, Open APIs need strong security to reduce associated risks. If businesses plan carefully and do their research, they can adapt and succeed. 

In the end, Open APIs are a powerful tool that organisations can use to achieve greater efficiency.

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