Application programming interfaces (APIs) have been around for a long time, but over the past few years they have become an increasingly indispensable tool for CIOs and organisations of all types.\nSandeep Sharma, an Asia-Pacific research manager for software at IDC notes double-digit growth of API\/integration tools across Asia-Pacific (excluding Japan), particularly in Australia, which accounts for the largest share of spending on software integration via API technologies.\n[ Beware the 14 reasons why software projects fail and the leadership practices that could sink your software project. | Get the latest CIO insights direct, with our CIO Australia newsletter. ]\n\u201cBanking and financial services are definitely the largest spenders on these technologies, followed by government, telecoms and media and followed manufacturing,\u201d he says. Retail and healthcare are among the key emerging vertical markets.\nThe greater imperative for API adoption\nThe impetus is the drive to modernise legacy systems. Sharma says that for many organisations throughout APAC, including Australia, connecting legacy systems with more modern systems and applications has taken on a sense of urgency. Building a modern workable API ecosystem needs to be considered in the context of cloud migration, as well as for the management of hybrid cloud environments, he says.\n BPay\n\nAngela Donohoe, CIO, BPay\n\n\nOften, the term \u201clegacy technology\u201d has negative connotations, yet in many instances they are very effective and essential while being difficult to replace. \u201cA lot of legacy applications are great. They ain\u2019t broke, you don\u2019t need to fix them, they can be fast, they do the job,\u201d says Angela Donohoe, CIO at Australian billing provider BPay.\nDonohoe says BPay\u2019s payments group exposed APIs to its more than 60,000 billers and more than 170 banks and financial institutions, allowing for faster, easier interoperability and ultimately much faster processing of customer transactions.\nFor instance, BPay developed an app for an accounting platform called Marketplace that allows users to generate batch transactions in the BPay systems, which are then transmitted to bank systems via the APIs, reducing friction and generally making all interactions easier.\n ANZ Bank\n\nLeigh Gibson, tech lead for responsible banking, ANZ Bank\n\n\nLeigh Gibson, tech lead for responsible banking at ANZ Bank, says the enduring legacy of mainframe computers shows that \u2018old\u2019 doesn\u2019t always mean \u2018suboptimal\u2019 in technology environments. She says that APIs should be thought of as a vital tool to help CIOs and organisations derive more value from their existing investments.\nIDC\u2019s Sandeep says that APIs are emerging as a critical tool for enabling smoother migration to the cloud\u2014both public and private \u2014by integrating their cloud based systems with on-premises or private cloud workflows. \u201cThis is another key use for APIs.\u201d\nFurthermore, the increased use of APIs has coincided with higher levels of automation, especially within the enterprise. \u201cThe entire idea of connecting different business processes and different systems through APIs is the backbone for automation. This releases a lot of efficiencies for different organisations,\u201d Sharma says.\nFor businesses managing extensive legacy assets, APIs also have a key role to play in maintaining business continuity by helping to ensure that they play nice with more modern digital systems. The point is equally valid for organisations wanting to retain core legacy systems, in operating environments that are a hybrid of the old world and the new, as well as those seeking to retire them over time in favour of running all, or close to, 100% of IT operations in the cloud.\nAPIs are enabling a degree of \u201cgraceful degradation\u201d of services at ANZ Bank, Gibson says. The use of APIs has enabled Gibson and her team to foster an environment with less deep integration, where it easier to decouple different apps from the system. \u201cYou might have one component that goes down and then the whole system goes down, which is a dreadful customer experience,\u201d she says.\nGibson recalls working with ANZ\u2019s internet banking team in 2018, when there were a lot of availability challenges. But after applying APIs to change the management of multiple interfaces, they were able to reduce outages by more than 90% in one year. \u201cAPIs can really assist with segregation of services; they allow you to upgrade,\u201d she says.\nAPIs reduce complexity\nA key benefit of APIs is helping CIOs and organisations of all type and size reduce complexity. Gibson says one of her biggest challenges is maintaining a focus on simplicity in the face of so much complexity being built up \u201cat scale over time.\u201d Successful, modern technology architectures need to be comprised of multiple layers, she says.\nBPay\u2019s Donohoe agrees. One technique she has implemented is to delegate responsibility for certain apps and layers, to avoid a situation of creating a \u201cgraveyard\u201d for abandoned apps that over time ended up burdened with too much complexity.\nSome years ago, Donohoe led the establishment of an architecture review board which has enabled the BPay tech team to better design, build, and protect applications that deliver real value.\nChallenges in API deployment\nIDC Sharma warns that there are adoption challenges when it comes to APIs that need to be considered upfront.\nOne key challenge to API adoption is the overall cost relative to the value derived\u2014ensuring the ROI is positive, he says.\nBut a bigger challenge involves the culture of technology teams and the wider organisation, such as apparent lack of executive support and sponsorship. \u201cThe true value extraction from some of these implementations is not possible because of these cultural challenges,\u201d Sharma says.\nThere are other important considerations around governance, security, and privacy regulations. \u201cImagine the case where you expose your assets to certain third parties. There needs to be a level of security attached to it,\u201d he warns.