What is API integration? A thorough explanation of the basics, benefits, implementation steps, and more!

Basic knowledge of API integration

Let's take a look at what an API is and why API integration is gaining attention.

An API is a mechanism for connecting different software programs and sharing functions and data. In recent years, there are multiple forms of public APIs, such as public APIs and private APIs, and there has been an increasing movement to create new value by opening up services.

Utilizing API integration eliminates the need to build a new system from scratch, reducing development costs and enabling dynamic service releases. Social media login and e-commerce site payment gateways are typical examples of API integration.

On the other hand, changes in the provider's service specifications may affect the system, so consideration must also be given to continuous monitoring and version management.

▼I want to know more about the API
⇒ API｜Glossary

What is an API?

API stands for "Application Programming Interface" and is an interface that allows software to exchange data and functions with each other. When linking with external systems, this API acts as a common language, allowing the necessary information to be exchanged accurately and safely.

Previously, many APIs had proprietary specifications, but the use of unified protocols as Web APIs has become commonplace, making integration easier. Currently, APIs are being made public in a variety of fields, making it easier to collaborate with other companies' services.

In this way, APIs have become an important point of contact for companies to combine and expand their services, and are a driving force behind the creation of new business and customer value.

Why API integration is gaining attention

In addition to the recent acceleration of DX (digital transformation), there is also a growing need to share and utilize real-time data, creating a need for a system that can instantly reflect information via APIs.

Furthermore, an increasing number of companies are adopting open APIs, and collaboration with external developers and the expansion of ecosystems are expanding the possibilities for new service integration and value creation. API integration not only improves user experience and business efficiency, but is also an essential element for business growth.

API x data integration Mechanism

Let's understand how API integration works, focusing on REST APIs, SOAP APIs, and data formats.

An API basically works by sending a request and receiving a response. Although the communication methods vary, such as REST API and SOAP API, processing is carried out in all cases according to set specifications.

The data formats exchanged during integration are generally JSON or XML, each with different structures and readability. When choosing which data format to use, it is important to consider factors such as development efficiency, processing speed, and compatibility.

Compared to file and database integration, API integration is noteworthy for its real-time nature and ease of customizing access restrictions. Another advantage is the ease of calling functions using modules.

Difference between REST API and SOAP API

REST APIs are simple, using standard web protocols such as HTTP, and are lightweight and easy to understand, while SOAP APIs use XML and include mechanisms for security and transaction management, allowing for a more rigorous design.

In development environments, REST APIs are often chosen when ease of implementation and performance are important, but SOAP APIs are also used in cases where strict data management is required, such as in financial institutions.

The first step to a successful project is to check your company's requirements and security level and choose between REST and SOAP.

▼I want to know more about REST API
⇒ REST API｜Glossary

Data exchange format (JSON, XML, etc.)

JSON (JavaScript Object Notation) is lightweight, highly readable, and highly compatible with JavaScript, making it the de facto standard for Web API integration in recent years. On the other hand, XML (Extensible Markup Language) is also excellent for structuring and has been widely used for a long time.

In large-scale systems or business use, you may need to consider the amount of data exchanged and the format, and decide whether to use either format. For example, if you have been using XML in your mission-critical system, core system, you will need to consider optimization while looking at migration costs.

Ultimately, the key to success is choosing the best data format that suits the skill set of your development team and the policies of your API provider.

Comparison of API integration, file integration, and DB integration

File integration involves transferring data via CSV or Excel files, and is primarily a batch process. While it's easy to transfer large amounts of data at once, it's not suited to real-time processing.

DB integration is a method of directly synchronizing databases, but the security settings and connection requirements can be complicated. On the other hand, it is expected to be fast and consistent, so it is chosen according to requirements.

API integration allows for flexible configuration of authentication and access control while achieving real-time performance, making it particularly useful for connecting to cloud services and mobile applications in recent years.

Benefits of API integration

There are many benefits to using APIs. Let's summarize the main points.

The benefits of introducing API integration include significant business impacts such as reduced development costs, expanded functionality, and improved operational efficiency. By combining services, you can achieve maximum benefits with minimal investment.

Another attractive feature of API integration is its real-time nature and high level of automation, which supports rapid decision-making by keeping data up to date.In terms of security, a major advantage is the ability to implement detailed access control using API keys and tokens.

However, there are some disadvantages and risks, so you need to evaluate it comprehensively before considering its implementation.

1. Reduced development costs

By using APIs that are already publicly available, you can significantly reduce costs by eliminating the need to develop functions from scratch. For example, the development burden is significantly lighter if you use APIs from Facebook or Google than if you were to create your own social networking authentication function.

It also shortens development time, which means you can release services faster. The cost and time savings will allow you to invest resources in other important areas.

However, there may be costs involved when API specifications change, so a detailed maintenance plan is required even after integration.

2. Expansion of existing services

Using an API makes it easy to incorporate the functions of external services into your own system. For example, by using the Google Maps API, which provides map information, you can easily add a map function to your own website.

This is an attractive feature as it allows you to increase the added value of your service without the hassle of developing it yourself. By collaborating with other companies, you can gain new users and further improve the convenience of existing users.

Expanding functionality through APIs also leads to an expansion of business scale, so many companies are using them as a strategy to increase their competitiveness.

3. Improved work efficiency and reduced errors

By connecting multiple systems via API, data entry and aggregation tasks that were previously done manually can be automated, preventing manual transcription errors and inconsistencies and significantly streamlining business processes.

Because data can be linked in real time, customer information, inventory information, sales information, etc. can be managed centrally, facilitating smooth information sharing across the organization. This enables quick decision-making and customer responses.

Another important point to note is that it reduces the burden on employees and makes it easier for them to shift to more creative work.

4. Acquire the latest data and update it in real time

By using API integration, you can always obtain the latest data. For example, by using a weather information API, you can provide users with real-time weather information.

This real-time functionality can be utilized in a wide range of areas, such as displaying inventory on e-commerce sites and responding to inquiries, contributing to improved user satisfaction.

The instantaneous reflection of data is also useful for formulating sales and marketing strategies, which leads to increased business agility.

5. Enhanced security

It is common for APIs to assign authentication information (keys or tokens) to each request, which makes it easier to prevent unauthorized calls from users without access rights.

Furthermore, restricting communication to HTTPS protects the confidentiality of the data exchanged, and requires strict access management on the connected server side, increasing the security level.

This system makes it possible to achieve the seemingly contradictory goals of ensuring the safety of inter-service connections while improving convenience.

Disadvantages and points to note about API integration

While it is convenient, there are some risks and things to be aware of.

API integration is a very effective method, but it inevitably depends on external factors such as the stability of the provider's service, changes to terms of use, usage fees, etc. Particularly for systems directly linked to business, continuous operation is a prerequisite, so it is important to properly factor in these risks.

Security management is also an important consideration when using APIs. If there is a risk of API keys or tokens being leaked, the system may be subject to unauthorized use from outside.

To minimize the disadvantages, it is essential to have a solid operational management system in place, and to have rules for responding to failures and be prepared for frequent contract renewals.

1. Risk of API provider service termination

If you build a system that relies on external services, you will be significantly affected if the service itself is discontinued. In particular, there are cases where free APIs are suddenly discontinued, so it is necessary to prepare alternatives in advance.

Even paid APIs for businesses can be terminated due to changes in business policy, so when integrating with important systems, you must always consider risk avoidance measures.

It is important to thoroughly investigate the reliability of the API provider and consider countermeasures from the design stage, such as dividing the modules so that they can be switched at any time.

2. Impact of changes to the terms and conditions and disruptions

If the API terms of use change, previously free features may become paid features, or limits on the number of API calls may be tightened. It is important to regularly check the contract details and gather information in advance.

Additionally, if an issue occurs with the API provider, it could have a significant impact on your own services, so it's a good idea to check in advance whether or not there is a service level agreement (SLA) and what support structure is available.

To ensure a speedy recovery, it is a good idea to secure communication routes with partners and have a monitoring system in place.

3. Usage fees and resource limits

Free plans often have limitations on the number of API requests and the range of features, and as your business expands, you may need to upgrade to a higher-level plan. It's a good idea to take this into consideration when calculating costs.

An increase in requests can put pressure on the overall operating costs of the service, so it is important to determine in advance the required number of accesses and response speeds and select the optimal plan.

Exceeding these limits can cause costs to rise sharply, so load testing and a design that takes future scalability into account are required.

4. The Importance of Authentication Management and Security Measures

If API keys and tokens are not managed properly, the risk of data leakage due to unauthorized access increases. It is essential to have a system that subdivides access permissions and prevents unlimited access to sensitive information.

In addition, it is necessary to keep security up to date and secure at all times by implementing a regular key rotation and conducting vulnerability scans.

It is also important to establish a log and monitoring system in preparation for any incidents that may occur, and early detection and response to security incidents will help minimize damage.

Main use cases for API integration

We will introduce some typical examples of specific situations in which API integration is used.

API integration is used in a wide range of situations across a variety of industries and is a technology that is used behind the scenes in many familiar functions. Linking with social media accounts and integrating with payment systems are typical examples that are used daily by ordinary users.

Flexible connections between corporate mission-critical system, core system and the centralized management of sales, inventory, and customer information have become commonplace. Linking with POS register data and accounting software has also led to the automation of accounting tasks and the implementation of real-time sales promotion measures.

Incorporating APIs in this way not only adds functionality, but often also brings about a revolution in the business model itself.

SNS authentication and external login functions

Many web services have introduced features that simplify user registration by using social networking accounts such as Facebook, Google, and X. This mechanism is also realized through API integration.

By enabling users to use SNS authentication, they can avoid the trouble of having to register new IDs and passwords, reducing the dropout rate.It also has the advantage for service providers that it is easier to maintain the integrity of customer data, which can be used for future marketing initiatives.

The fact that this logic works seamlessly behind the scenes is a major factor in making the user experience smooth.

Linking e-commerce sites with payment gateways

Payment processing is essential for running an online shop, but developing credit card and electronic payment functions from scratch is extremely costly. As such, many online shops integrate with external payment gateways via APIs to implement functions safely and quickly.

By using the APIs of payment processing services such as PayPal and Stripe, you can support multiple payment methods at once, dramatically improving user convenience.

Nowadays, it is important to support a variety of payment methods, such as QR code payments, and by flexibly incorporating the latest payment methods through API integration, you can create a system that will not miss out on business opportunities.

Integration of mission-critical system, core system and internal systems

By connecting multiple core systems of a company, such as sales management systems, inventory management systems, or customer relationship management (CRM), via APIs, it becomes possible to handle information centrally, eliminating duplicate entry and data consistency issues within the organization.

For example, not only can order data and inventory data be instantly matched, but customer information can also be shared across departments, leading to improved customer satisfaction and optimized sales strategies.

As a result, not only will business efficiency improve, but unnecessary costs and inventory loss will be reduced, and the speed of management decisions will also be accelerated.

Data integration with POS registers and accounting software

By collecting sales information from physical stores via POS registers and setting it up to synchronize with cloud accounting software at the slip level, you can significantly reduce the workload of accounting work. API integration is particularly useful when managing sales from multiple stores in a central location.

Automatic data import reduces human error, enabling accurate financial analysis, which will also be useful for decision-making on sales strategies.

As information becomes increasingly centralized across the boundaries between offline and online, we are entering an era in which everything from store operations to accounting is seamlessly connected.

Steps for implementing API data integration

When introducing API integration, you need to proceed step by step, starting with defining the purpose and moving on to development, maintenance, and operation.

The first step in successfully implementing API integration is to clarify your objectives and then identify what functions and data integration are required.

After that, you will need to obtain an account with the API provider, manage keys, implement and test, and even during the operational phase you will need to continue to maintain contact with partners and handle version upgrades.

Careful testing and document management at each step is an important point that will make troubleshooting smoother and ultimately increase the chances of successful integration.

1. Clarifying the purpose and defining requirements

First, clarify the goal you want to achieve through API integration. Depending on your goal, such as increasing sales, reducing costs, or improving business efficiency, the services you need to integrate and the functions you need will vary.

Next, as part of the requirements definition, we organize the data items and processing flow to be handled and identify a list of necessary APIs. We also plan when to import the linked data, taking into account the timeline and update frequency.

If the initial requirements are well defined, it is possible to significantly reduce rework during subsequent development and testing.

2. Register the API provider and obtain a key

To use the API of a partner company, you need to register an account on the developer portal or admin screen and obtain an API key. API keys are essential for security management, so be sure to have strict rules for how they are handled within your company.

Also, API keys may have usage limits set, so it is important to estimate in advance how much traffic you can expect.

The obtained keys and connection information should be clearly stated in the project documentation, and a system should be established to safely share them within the team.

3. Implementation and Testing

We prepare a development and test environment and incorporate code that actually makes API calls. The basic task is to check whether the API endpoint returns the expected data and whether error handling is performed appropriately.

In addition to unit testing of individual functions, it is also important to test integration of the entire system. In particular, taking into consideration behavior in the event of a failure, such as timeouts or retry processing in the event of a network failure, will help minimize operational problems.

Please note that when using APIs from other companies, you may discover restrictions or subtle behaviors that are not described in the documentation, so it is important to understand them thoroughly during the testing phase.

4. Operation and Maintenance

Even after going live, you will need to keep up with API upgrades and changes to the provider's services. Make sure to check whether the integration is working properly through regular checks and system monitoring.

When a version is changed, there is often a transition period, but it is recommended to start preparing early so you don't have to respond in a hurry.

While establishing an operational and maintenance system, we will consider introducing new API integrations and expanding functionality based on the data and user reactions we have obtained so far, which will further accelerate the growth of our service.

Utilizing solutions such as iPaaS and ETL tools

There are an increasing number of solutions that enable API integration using no-code or low-code.

Instead of developing API integration from scratch, you can significantly reduce development resources by using iPaaS (Integration Platform as a Service) and ETL (Extract, Transform, Load) tools. These solutions often come with many pre-prepared API connectors, allowing you to build integration flows with drag and drop.

As no-code and low-code approaches become more widespread, even non-experts can implement a certain level of integration, helping to promote digital transformation within companies.

It also has an automated operation management function, which allows error monitoring and retry settings to be completed on the tool side, helping to reduce the burden on system administrators.

▼I want to know more about iPaaS
⇒ iPaaS | Glossary

▼I want to know more about ETL
⇒ ETL｜Glossary

iPaaS features and benefits

iPaaS is an integrated infrastructure service provided on the cloud that acts as a hub connecting multiple applications and services. It has an easy-to-use GUI, allowing you to achieve advanced integration while minimizing the amount of code you need to write.

The benefits of implementing this system include reduced initial costs, clear operational costs, and no need to manage your own servers. Security and authentication management are often covered by the platform, making it easy to use with peace of mind.

Even small and medium-sized enterprises that previously found it difficult to secure engineering resources can now easily implement effective API integration by using iPaaS.

Saison Technology's iPaaS "HULFT Square (HalftSquare)

ETL tool basics and no-code integration

ETL tools automate the extraction, transformation, and loading of data, and are responsible for connecting to data lakes, data warehouses, etc. An increasing number of companies are using them as a platform for analyzing large-scale data.

In recent years, no-code or low-code ETL tools have emerged that allow you to assemble API integrations using a GUI, making it possible to build data pipelines without specialized programming knowledge.

This will create an environment where field staff can effectively utilize data, supporting data-driven decision-making across the entire company.

Examples of efficient operation management

iPaaS and ETL tools have a wide range of error monitoring and alert notification functions, allowing for smooth analysis of the cause of integration failures and recovery work, reducing the burden on system administrators and enabling faster responses.

In addition, version control and job scheduler functions are often provided, and regular integration such as daily or weekly can be automatically executed with simple settings.

Once the system is put into operation, it will not only reduce manual labor, but also improve data quality and processing accuracy, enabling more accurate business insights.

Future possibilities for API data integration

API integration is evolving further against the backdrop of the rise of AI and IoT, and the spread of open APIs.

In recent years, more advanced initiatives such as automated analysis using AI and real-time control linked to IoT have become popular, and it is likely that these new technologies will also increasingly data integration via APIs.

The number of companies promoting open API strategies is also increasing at an accelerating rate, and new innovations are being born from service collaboration across industry boundaries.

In the cloud-native era where serverless and container technologies are becoming commonplace, it is expected that APIs will further increase connectivity, making it possible to build complex systems in an agile manner.

Next-generation services through AI and IoT collaboration

When applying AI analysis and machine learning, it is necessary to obtain large amounts of data from various data sources. If data can be obtained in real time through API integration, the accuracy of algorithms can be improved and processing can be further automated.

IoT devices can also send data to the cloud through APIs and obtain the status of external systems, enabling autonomous operation and remote control.

This trend toward smarter systems is predicted to bring about major changes to social infrastructure in the future, and API integration will become increasingly important.

Open API strategy and ecosystem expansion

In the past, many companies operated their systems in a closed manner, but recently there has been a growing trend for companies to make their APIs public and to actively collaborate with external developers and partner companies.

A major benefit of this open API strategy is that it expands the ecosystem and makes it easier for unexpected use cases and services to emerge. Innovative services centered on API integration are on the rise in fields such as FinTech and HealthTech.

However, when adopting open APIs, it is essential to ensure a level of security and establish operational rules, so it is important to proceed in stages.

Strengthening collaboration in the cloud-native era

When building cloud-native applications, the mainstream architecture is one in which microservices communicate with each other via APIs, as this makes it easy to extract functionality on a service-by-service basis and also makes scaling and updating easier.

The combination of a serverless environment and an API gateway provides high availability and flexible scaling, making it easier to handle sudden spikes in traffic.

In this way, the use of cloud environments is closely combined with API integration, and continues to dramatically change the way systems are developed and operated.

summary

API integration has become an essential element in companies' digital transformation. It is important to understand the advantages and disadvantages and choose the best solution.

data integration using APIs brings many benefits, such as more efficient system development, business automation, and improved user experience. However, careful planning and operation are essential for successful implementation, as there are also some points to be aware of, such as dependency on providers and changes in terms of service, and security management.

The spread of iPaaS and ETL tools has made it easier to integrate with no-code/low-code systems, making it easier for a wider variety of companies and organizations to try API integration. As integration with AI and IoT becomes more widespread, the possibilities will expand even further.

By clarifying your company's desired goals and roles and selecting the most appropriate API integration methods and tools, you can lead to business growth and innovation.

The person who wrote the article

Affiliation: Marketing Department

Yumi Ogawa

After two years of experience as a copywriter at an advertising agency, she has been focused on marketing in the IT industry. Her experience in a variety of companies, from B2C to B2B, and from Japanese ventures to major foreign companies, is her strength. She has consistently worked in a variety of marketing-related roles, including public relations, branding, product marketing, and campaign management, and has been in her current position since May 2024. In her private life, she loves interacting with nature, hot springs, and public baths.
(Affiliations are as of the time of publication)

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