In Part Two of the series on KPIs for APIs, we discussed how KPIs are being used and what KPIs are agreed upon to cover Revenue Growth or Consumption.
Today we go further to talk about the category of Efficiency KPIs.
Efficiency KPI #1: ROI
When exchanging with stakeholders to define then adjust activities towards KPIs, the easiest KPI to cover Efficiency is ROI (Return On Investment).
If we invest $1 on our API Program, what return will we get two years from now? This is the question an API team has to document for itself and its board.
In the case of AIFE, which is the platform used by millions of suppliers to the French government, they had decided to track their success based on their payback period: and they achieved a two-year payback period, investing €1Bn and cutting cost by €500m every year.
A similar indicator is cost-saving over a period of time, such as the Danish Defence reducing their costs by 96% over six months. In both cases, the main stakeholders are citizens and their representatives, and such Efficiency means freeing up tax money.
Efficiency KPI#2: Velocity
This KPI has the characteristic of impacting not only Efficiency but also Consumption: I go faster with as much fuel as before, and my API consumers enjoy their experience as it is faster than before.
Even if most traditional boards do not immediately get the importance of such metrics, some do, especially those most advanced on putting their customer journey at the center of everything they decide.
KPIs achieved here with the open platform are mind-boggling.
Highmark, a Blue Cross Blue Shield Platform managed to increase its speed to release new features 60 times. Or CMA CGM, a leading shipping group, has accelerated their innovation speed 18 times: they have reduced their time to ship new features from three months down to one week.
Another smart metric to engage stakeholder is time-to-onboard new customers, as used by KGI Bank, they have reduced theirs from three hours down to two minutes. Think about how many busy people would open an account with a bank in just two minutes when their competitors still take three hours.
Efficiency KPI #3: Cost Avoidance
By definition, APIs are a contract between a team and their audience to provide services given some entries. They are driving efficiency by replacing 1:1 integrations with partners or other IT assets with a 1:many contract. By just applying this principle with discipline, some teams have eliminated redundancies hence saved cost.
For example, ENGIE, an energy leading utility company in Europe with global activities. They were able to measure the fact that one of their third-party APIs for weather data was used by many groups and divided their cost by three in that scope.
Another example is BNP Paribas, one of the top 10 banks in the world. Their Personal Finance division looked at their inventory of APIs and was able to generate efficiency by just identifying duplicates and governing scopes for each group.
Efficiency KPI #4: UX Reactivity
UX Reactivity illustrates your efficiency: if you can ship data faster, or accelerate a process for your customers, you are rightly seen as more efficient. This KPI complements the velocity KPI: you do things faster, and users can experience it.
For example, AmerisourceBergen, a leading drug wholesale was able to establish this amazing KPI: the productivity of their field personnel working with pharmacies raised by 40% thanks to their API program! Or B3, the leading Stock Exchange in Brazil, can now ship data 50% faster with its open platform.
And this one: Toll Customs operating borders in Norway was able to ship trucks across the border five times faster thanks to their open platform.
In Part Four, we will explore KPIs for Resilience to address risk concerns.
Learn why APIs matter in uncertain times.