10 key performance indicators for capturing API business value

Having many hands in API creation can quickly send API programs off the rails. Here's a call for greater transparency to ensure the business is getting something for its money.
Written by Joe McKendrick, Contributing Writer

APIs have become a bedrock part of mainstream enterprise computing architectures. That means they need the same degree of management and monitoring as standard full-blown applications. 

Photo: Joe McKendrick

A well-functioning API effort needs "advanced monitoring, metrics, and analytics to inform all of the processes-capabilities that not only capture raw traffic data, but also make that data actionable to help prevent abuse, provide insight into developers' experiences, shape product iteration, align internal stakeholders, and shine lights on untapped opportunities," a recent ebook from Google Cloud and Apigee relates. 

This is becoming especially important with the increasing numbers of non-developers who are also dabbling in API creation and deployment. A recent survey by Postman finds 53% of those working with APIs do not have the title of "developer" -- up from 41% the year before. With so many people across the enterprise with their hands in APIs, an API program could go quickly off the rails. The business may end up supporting -- and paying for -- dozens of clunky and underused APIs, while taxing its infrastructure with other APIs that are poorly designed and overused.

This calls for greater visibility into the API experience. Enterprises need "insight into which APIs are being adopted and what that adoption may portend about emerging business opportunities or investment priorities," the Apigee ebook's authors urge. "They need to understand how legitimate API traffic differs from traffic from bad actors-and how to thwart the latter without disrupting the former. They need data to align business and IT leaders around the ways developer activity contributes to revenue."  

Measurable metrics are always a good thing, and the challenge is identifying and capturing the right metrics for APIs, which tend to operate under new sets of rules that may differ from traditional enterprise software. The Apigee authors propose a series of fundamental key performance indicators (KPIs) that will help API creators and business leaders understand the relative success of their efforts:

Speed to API: This is an essential KPI in today's fast-moving business environment. The ability to achieve business goals needs to be balanced against the ability to rapidly launch APIs. "When this target also segments for APIs that are requested by the business, it becomes a useful measure of time-to-market for needed functionality."

Speed to onboard: How quickly can API creators "register their apps, obtain keys, access dashboards, and discover APIs?" This onboarding process should be automated as much as possible. An automated signup process "should give access to low-risk APIs and sandbox environments that allow developers to be productive right away," the Apigee authors explain. 

Speed to upgrade: "Once developers are onboarded, the portal can provide upgrade options through which they can request access to more sensitive data and business functions."   

Growth of traffic: This is perhaps the most important KPI of all, as it "can help API programs develop a strong DevOps culture by continuously monitoring, improving, and driving value through APIs."

Breadth of business: Very important as well, of course. "Business units accustomed to legacy integrations or old systems may resist adopting an API program," the Apigee team relates. "By prioritizing this target, the program can more quickly escalate such pushback to the proper executive level for resolution." In addition, high-achieving APIs can be spotted more quickly. 

Cost reduction: Always a good thing to present to upper management. The reuse ethic engendered by APIs saves a lot of development resources. "Significant cost reductions are often realized as reuse of APIs increases and needless duplication of existing but poorly-documented APIs decreases."

Direct revenue: API monetization is the great final frontier. Such a KPI helps "capture the revenue for the sales of core products that are enabled by APIs." Interestingly, the Apigee authors suggest demonstrating these metrics may help assuage upfront concerns about API development or maintenance costs. 

Number of developers applying APIs within business contexts: "API teams should distinguish between overall developer adoption and adoption among specific developers who are using APIs in a known business context, such as integrating the applications of existing ecosystem partners." 

Number of applications accessible to customers: "If an API program leads to the creation of lots of applications that are only used internally and not by customers, it can sometimes feed internal criticism and abandonment of the program."  
Number of partners: Such a KPI "can be used to accelerate partner outreach, drive adoption, and demonstrate success to existing business units."

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