The seven make-or-break API challenges CIOs need to address

To compete in the digital age, large enterprises need scalable and flexible IT systems to allow for ongoing experimentation and iteration at speed. As a result, many companies have launched programs to modernize their technology.

Application programming interfaces (APIs) have emerged as a key element of tech modernization at many businesses, including most banks and insurers. With their ability to link systems and data, APIs play a crucial role in making IT systems more responsive and adaptable.

Yet despite the promise, most enterprises have failed to capture the value they initially envisioned from APIs. In many cases, a rush to build APIs without a thoughtful strategy has created a mess, with redundancies, poor maintenance practices, and limited transparency canceling out many of the potential benefits. Some companies have spent years ripping and replacing megasystems, adding APIs in an ad hoc way the entire time, without making any real progress.

In our work with many clients on developing API strategies and building out API portfolios, we’ve found common themes behind the difficulties companies encounter. One is that IT assumes sole ownership of API programs, so they aren’t tightly linked to business goals or an overarching modernization vision. Another reason API programs falter is siloed efforts—for example, efforts focused solely on data or cloud migration—which can generate only incremental value. To achieve the full promise of APIs, companies ultimately have to make significant progress along multiple dimensions.

To avoid these pitfalls and get the full benefit from their API initiatives, CIOs must address seven key challenges.