API business operations in the insurance industry can help to improve customer experiences, streamline processes, and open up new opportunities for collaboration and innovation.
For example, an insurance company that exposes its data and functionality through APIs can enable customers to easily access and manage their insurance policies and can allow other businesses to build innovative applications that use the company’s data to offer new types of insurance products or services.
But what is API Business Operations? What role do they play in the insurance industry? What is the value of APIs to a business? And are APIs also tradable products?
These are the questions we set out to answer in our new series, “A Guide to API Business Operations”
Where do we stand?
APIs have taken over the world of tech. Many of the most successful tech companies, such as Google, Amazon, Facebook, and Uber, generate significant portions of their revenue through APIs and integrated products. Just think about a food delivery app showing you a map of nearby restaurants – via the Google maps API.
Due to the very technical nature of the APIs, most programs focus on security and control instead of usability, ease of use, and efficient business processes. While API security is essential (we have written a whitepaper about API security in collaboration with Google), focusing on the technical aspects alone will not bring a new offering that brings the expected benefits.
Since launching the first API marketplace for the insurance industry in Europe in 2019, we have worked with some of the largest players in the financial services industry. During this time, we have observed that many API programs fail at the same point: when APIs are published on an (often self-built) API portal and customers are expected to start using them.
API business operations. Or: The inside-out use case
This guide will initially focus on the practical aspects of publishing APIs to third parties. More use cases will follow in later articles.
Definition of API Business Operations
Looking at the definition of Business Operations on Wikipedia says:
“Business operations is the harvesting of value from assets owned by a business.”
In the context of APIs, this means efficiently maximizing the value APIs bring to the business. And actually, this applies not only to the ones created and owned by the company alone.
Instead, this principle applies to all APIs in a corporate universe:
- Internal APIs are built in-house and used by developers and teams within the company
- External APIs are built in-house and published to the outside world. Sometimes also called Partner APIs.
- 3rd Party APIs from external providers that are used across the company and that are typically being purchased
This benefit can be a monetary one, but as we will see in the next section, monetization is only a small aspect of API Business Operations. Next to direct monetization, there are many more aspects to count on, such as other developers enriching your products or offering easier ways of integrating and using company assets.
So what could be a better definition of API Business Operations?
“Business operations is the harvesting of value from assets owned by a business.”
Extending the definition and including the APIs that are used by a company (but provided by 3rd parties), gives a 360° scope of maximizing the business value of all APIs for the company that uses it, no matter who owns the existing technology.
The “A Guide to API Business Operations” series will feature these articles, among others, yet to come:
- Part 1: What is Business Operations?
- Part 2: What is the value of APIs?
- Part 3: Who are the Stakeholders?
- More parts will follow. Stay tuned!
We will publish them step by step, update them as needed, and communicate updates on our LinkedIn profile. Follow us there and stay tuned.
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