This is the second part in a two-part series on APIs and essentials metrics that help us track them. Here is Part 1. In part 1, we looked at the AER Model (Adoptions, Engagement & Retention) and looked at different metrics that help you track the success of your APIs. Here is a nice summary of the landscape published by the good people at ProgrammableWeb
Author: Mark Boyd
Continuing with the theme of measuring the success of APIs, next, we’re going to look at the KPIs for APIs. First, let’s understand why is it important to have KPIs for APIs.
Now, more than ever before, it is essential for digital teams to define KPIs for the APIs for their digital products. Executives belonging from starts to Fortune 500 companies understand that the core performance of their business is entirely dependent on technology and more so, on technology that enables the communication between internal systems and systems of their business partners. Therefore, making APIs critical assets for many companies and hence it’s there is value to be derived by using key performance indicators (KPIs) to track your APIs and aid in the adoption and development of your digital offerings.
There are eight KPIs that are helpful when you’re leveraging APIs to drive business success. These eight KPIs largely fall in three major categories –
- Consumption of APIs
- Number of APIs
- Number of Developers
- Number of Customers
- Number of Apps
- Performance of APIs
- Speed to API
- Speed to Onboard
- Cost of APIs
- Cost Reduction
- Direct Revenue
Let’s start with Consumption of APIs
KPI 1: Number of APIs
This is a very tactical KPI. One has to ensure quality with quantity. Publishing a large number of APIs without the right offering or strategy will lead to a drop in the usage of APIs. Therefore, an API product needs an adequate number of APIs that suffice the need of the users.
KPI 2: Number of Developers
A meaningful community of developers is key to the success of an API program. If the API provides the correct functionality, it can lead to a rallying of large sections of developers who are willing to pay and adopt your APIs. This eventually leads to the creation of an ecosystem around your API program. Therefore, the number of developers consuming/discussing your API is key to its success.
KPI 3: Number of Customers
It’s really important who the end-user of your APIs and the volume of these end-users. The developers consuming your APIs usually would be developing another app on top of your API for another set of stakeholders. It’s imperative to ensure the APIs serve the needs of the end-user entirely to meet the critical pain points that developers are trying to address using your APIs.
Here is a Digital Value Chain explaining the end user consuming an API, created by a developer via an app using a third part API.
KPI 4: Number of Apps
APIs often lead to creating apps atop the API platform. The larger the number of apps being developed upon your API platform, the strong the validation of your APIs. APIs that are able to solve pain points for the masses lead to strong consumption of the said APIs, in turn, leading to business development by monetizing the usage of your API.
Next comes is the Performance of APIs
KPI 5: Speed to API
Fundamentally, this is the time to market of an API when the need arises. Irrespective of the functionality requested by the developers consuming the APIs, the team developing the APIs need to ensure they’re able to create a comprehensive API product in limited time while ensuring that the end user’s experience is not compromised.
On a side note, DZone published ‘8 Accelerators to Speed up API Development’, to help you speed up your API development.
KPI 6: Speed to Onboard
A new developer looking to leverage your APIs to create their product first need access to your APIs. In order to do so, usually, businesses have compliances before registering a potential new business partner. This new business partner/software developer needs to get approval done, register themselves for the API, often acquire a key to use the API, and get their hand on the documentation of your APIs.
This can be a tedious process, especially for developers who are just looking to experiment with your API before deciding upon whether to actually use it or otherwise. Therefore the timeline/steps a new user needs to accomplish before using the API in sandbox is key to the success of your API.
Finally, Cost of APIs
KPI 7: Cost Reduction
The is difficult to reduce the cost of APIs however it can be offset of the reuse of the said APIs for greater purposes. A highly capable API program can become a platform in itself and therefore generate revenue for the company. This ensures that the API program is a profitable one, meeting the need of the executives.
KPI 8: Direct Revenue
An API program is effectively a sales channel for a company. It allows for strategic partnerships and new business models to be created by business managers. However, a majority of API programs can be self-sustainable by creating an end to end backend product that can be leveraged by frontend developers to offer a service such as Google Maps or Weather API. These kinds of APIs generate direct revenue for the company and can be measured easily enough with the number of hits to the API.
These are a broad set of KPIs that can help you create powerful KPIs for your API program. You can use the metrics to give valuable feedback both to the management and the product/engineering teams at your company and help create new insights into the program.