Business Scenario
Continuing the previous scenario, let's suppose your company is planning to develop an application that will use standard functionalities, such as creating and updating entities, that are provided by another company as Application Programming Interfaces (APIs). So, what are APIs and how can you use them?
Benefits of API
An API is a way to communicate with other software programs.
APIs specify how software programs can exchange information with each other, even if they are designed and run by different organizations. APIs facilitate interaction by selectively exposing functionality that allow different apps, websites, and devices to communicate effectively with each other. More importantly, APIs allow businesses to reach beyond regular business channels and share data, content, and services directly with both business to business (B2B) and business to consumer (B2C)) clients, making UI development easy.
Business Scenario
Your company creates an application for customers to create and display maps. You create an API to enable customers to display your company's maps in their application.
The customer creates an application, such as a customer relationship management (CRM) application. Within this CRM application, the customer calls your API to add a map next to their customer’s profile.
Your application receives the call and does something, such as access your proprietary map database. Your application can be as complicated as it needs to be, but the customer doesn't need to know exactly what you are doing behind the scenes.
When your application is ready, it sends a response. For example, a map for an address, entered by the customer.
To summarize, you create and expose an API and your customers could consume your API.
When your application is running and gets a request, it sends back a response - either a confirmation that you did something, or some information, requested by the customer.
The application behind your API performs some specific business logic and sends back a response that gives your customers the information they need for their own application.
Rules to Develop and Deploy APIs
Since the developer of the API and the consumers usually do not know each other, it is useful to follow some rules.
APIs in the SAP API Business Hub

- API Package: An API Package is a collection of related APIs or services, belonging to one product or product area, packaged and delivered together.
- API/service: An API or service is a collection of related resources and operations available for each resource.
- Resource: A resource is a remote data entity, identified by a URI, on which operations are performed.
- Operation: An operation is a data operation, such as GET, POST, PUT, UPDATE, or DELETE, performed on a resource.
Summary
When we need software programs to exchange information in a standardized way, such as creating or modifying business partners (entities), these standard functions can be defined as APIs. This will also allow other organizations to develop and operate APIs. It is then important to follow some rules when developing and deploying APIs.
Further Reading
See: What is an API?