API PRODUCT MANAGEMENT KPIS FOR API PRODUCT MANAGERS: PART 1
In this series, we’ll explore the following topics:
- BiModal API Product Management is Critical to Digital Transformation
2. Wear Multiple Lenses to Determine API Product Management KPIs
a.) Business Success Criteria Lens: Metrics to consider based on three drivers.
b.) Growth & Revenue.
c.) Cost Savings & Operability
3. The API Catalog Lens (Public, Internal, & Third-Party APIs): Metrics to consider for each layer of your API Catalog. *Business Success Criteria Lens will be applied when applicable.
a.) Public APIs (Also called Open Web APIs, B2B APIs, Product APIs)
b.) Internal APIs (Also called Business Capability APIs, or Capability APIs)
c.) Third-Party APIs. (OPAs… or Other People’s APIs)
4. The Stakeholder Lens: Presenting the right metrics to the right stakeholders.
5. The ‘API Product Manager KPI’ Worksheet
BiModal API Product Management is a Critical Part of your Digital Journey.
As we discussed last week in API Theory versus Implementation, the management of API Products, especially your internal API Products, will be key to your digital transformation. It’s no coincidence companies with the greatest digital maturity operate on advanced API programs that manage APIs internally as products — but what are program and product without people? Enter BiModal; the smooth operation of experimentally-driven Agile teams, as well as existing, experience-based teams in place. Here’s a quick refresher on Gartner’s Bimodal Concept:
Your API Product Management strategy must acknowledge the difference between Mode 1 and Mode 2 teams and enable them to work in unison. This is why API Products should uniquely allow for the joint management of both, business & technology, aspects of your KPIs. Let’s take a look at this Provider API Product, for example.
In this expanded view, you can see how helpful it is for the business and technical elements to be managed in one place. Because you have business and technical details included in every API Product, your technical users have quicker access to requirements while developing, and they’re more aware of the business reasons behind the APIs they’re building or monitoring. Meanwhile, APIs are more accessible to business users who are given an end-to-end view of their digital assets for better planning and reporting:
We’ve put a lot of focus on ensuring KPIs expressed in business terms can be recorded against API Product Activities that define how business capabilities are delivered through digital products. ignite translates API Product Activities into granular API interactions that are actually measureable and running in your infrastructure, thereby making the link between business performance metrics and digital interaction metrics from your API-enabled technology innovations.
What this means — Business Product Managers and API Product Managers can make decisions based on different views on the API Products they jointly own using different perspectives on API Products in Ignite, i.e. the lenses
Wear Multiple Lenses to Discover Your Most Valuable KPIs
When we decide on the right KPIs, we’re really just applying several filters to narrow down what matters the most to us; what checks off all of the boxes for our unique needs.
With the right tooling, you can get some truly interesting insights on your APIs… but there’s just so much data with digital, it’s hard to make sense of it all without zooming in on the metrics that are most important to your business.
For the sake of keeping it simple, we’ll cover 3 broad lenses that are the most applicable to API Products:
- The Business Success Criteria Lens: Metrics that matter, depending on your business initiatives*.
- The API Catalog Lens: Metrics to consider for each layer of your API Catalog. *When applicable, we’ll zoom in on the Business Success Criterium for each category.
- The Stakeholder Lens: Presenting the right metrics to the right stakeholders.
The Business Success Criteria Lens
Your success criteria should come from the business reasons behind your APIs. Because this changes for every organization, you’ll want to begin by spending time with the appropriate role(s) to define what goes in your SLAs (Service Level Agreements) versus what belongs in the NFRs (NonFunctional Requirements).
To align your API developers to the defined business success criteria, your best option is to include both NFRs and SLAs directly within your API metadata, along with as much design detail as possible. (For more on this, see: The Hidden Complexity of an API.)
For a simple example, we’ll take a look at 3 broad-stroke drivers and apply them to the next category:
Growth & Revenue. This is the branch that is concerned with creating money and value via growth, expansion, and new revenue streams.
Cost Savings & Operability. This branch cares more about saving money and creating value through IT modernization, automation, and digitization.
Customer-Centricity. This third branch is based more on bringing satisfaction to the customer, whether that’s a lay consumer, developer, partner, or stakeholder. Customer Success is the measurement here.
Because the API Product Manager always wants to stay aligned to the business needs, the Business Success Criteria lens is always good to look through, even in combo with others — think snap-on shades. So we’re going to keep it on and explore how these 3 business driver measurements change as we drill down into each section of the API Catalog.
The API Catalog Lens
First things first. API monetization is about far more than charging per call. (See: API Portfolio Reporting, API Theory vs. Implementation)
“It’s important to understand that most of the value generated by APIs in the API economy today does not come from charging directly for API calls. Most value is realized through business opportunities enabled by the APIs and the app constructs through which they are consumed, while the APIs themselves are free, at least initially. In other words, one of the biggest areas of API value comes from incremental revenue.” -Gartner Research, “Top 10 Things CIOs Need to Know About APIs and the API Economy”
Meaning — it’s good to broaden the scope. When we talk API Management, we typically cover only 1 of 3 categories:
- External APIs. (This could include Open Web APIs, B2B APIs, or Product APIs).
But if we’re to talk about API Product Management, we also need to cover measurements for:
- Internal APIs (Also called Business Capability APIs, Resource Methods, Capability APIs)
- Third-Party APIs. (OPAs… or Other People’s APIs)
Because this acknowledges the fact that the latter 2 categories are equally as important as the former.
KPIs for Public APIs (Open Web, B2B, Product APIs)
Imagine participating in an investor call and not being able to answer how many branches are open, what your growth and return performance is compared to your peers, or what regions are performing above and below plan.
The same is coming for digital and APIs. We predict analysts will start asking how many core business functions (Payment, Treasury, Customer, Products, Account, Money Movement, Rewards, Regulatory and Compliance, Identity, etc.) are enabled for an end-to-end seamless experience.
Growth & Expansion Metrics:
If your main goal is to create revenue, you’re trying to grow the business. While revenue growth can certainly be separated from customer reach, we’ve put them in the same category because they’re best when paired together, and typically stay dry under the same umbrella.
Remember: A big part of growth and expansion is testing innovative products. Well-designed APIs with SLAs and NFRs kept within API metadata will help developers at all stages to make quick discoveries around which duds to pull, mistakes to fix, and winners to scale.
A few growth metrics to consider are:
- How quickly are you able to determine success or failure for API Products?
- How many experiences will you launch this year?
- How are those experiences contributing to incremental revenue, retention, growth?
- What is the incremental ROI for each API Product?
- How many users do your API Products have, how many channels are each made available on, and how many business opportunities have come about from each?
Cost Savings and Operability Metrics:
If your focus is more on the bottom line, you care about production costs. You’re looking at saving time and money — and there are plenty of ways to drill down into details there. Measurements to consider include:
- How long does it take to launch an API Product from your existing portfolio? What about for each stage?
- What is your percentage of reuse when building a new API Product and how is that changing (How much faster are your API Products built as your portfolio gains more coverage)?
- How long between API Product updates (and how will you keep track of them)?
- How many discoveries are made monthly that help drive big business decisions? (This means your APIs are well-designed!)
Customer Success Metrics:
In an effort to solve for disruption, many businesses are turning their efforts towards a customer-centric strategy, building from the outside-in, whether that includes innovating new experiences or listening carefully to customer feedback and applying Agile’s continuous delivery method to the ever-evolving MVP. This both begs an environment of innovation, and requires a state of operational excellence.
- How quickly can you build an API Product to support an experience after you discover a need for it?
- Who is consuming your API Product? Are they the intended customers?
- How fast can you onboard companies to allow them to use your API-enabled services (Pay With Points, Know Your Customer, Anti-Money Laundering)
- How many customer product requests are you able to address month-to-month and what is the turnaround on answering a request?
- How many digital experiences are offered, how many do your competitors offer, and how many do your customers ideally want?
- How many customer journeys need to be fulfilled versus how many are being supported?
- How often are your API Products discovered and their components reused internally?
To Be Continued…
Today we covered the following concepts:
- BiModal Management is Essential for Digital Transformation
- Business Success Criteria Lens
- Growth & Revenue
- Cost Savings & Operability
- The API Catalog Lens (Public APIs) (to be continued): Metrics to consider for each layer of your API Catalog
- Public APIs (Also called Open Web APIs, B2B APIs, Product APIs)
Come back next week for “API Product Management KPI Worksheet: Part 2”, where we’ll provide a downloadable worksheet and cover the remaining concepts:
- The API Catalog Lens (Internal & Third-Party APIs) (continued): Metrics to consider for each layer of your API Catalog
- Internal APIs (Also called Business Capability APIs, or Capability APIs)
- Third-Party APIs (OPAs… or Other People’s APIs)
- The Stakeholder Lens: Presenting the right metrics to the right stakeholders
- The ‘API Product Manager KPI’ Worksheet
For more resources, visit our API Product Manager page.