How Do Third-Party Integrations Work? (With Advantages and Tips)

A third-party integration is a connection between two or more apps that is built on an external platform. This is the single most important distinction between native integrations (which are built or deployed in native app environments) and third-party integrations.

As a result, if you look through job descriptions for product management, you’ll notice that many of them refer to strategic partnerships, APIs, and third-party software integration. The typical expectation for senior/director integration positions is that they own a product roadmap strategy. The product manager is typically responsible for the integration’s effectiveness, quality, and speed to market if senior or director positions are not involved.

Most product managers will eventually be tasked with integrating a third party, sometimes voluntarily and sometimes not. Because of this, I made the decision to speak with product managers who have the most experience integrating third-party software, and I set out to learn about their best practices, both strategic and tactical These product managers work for a variety of well-known companies and some are consultants, but they all have helpful advice for integrating systems correctly.

JB: As you move into more intensely competitive markets (such as when developing a CRM or marketing automation tool), you’ll find that consumers have the freedom to simply choose or exclude products based solely on integration capabilities. Due to the fact that creating third-party integrations still requires a concerted effort, extensive testing, and fixing for edge cases, this raises the entry bar for businesses attempting to enter competitive markets.

However, you shouldn’t automatically assume that because your rival has an integration, you must too. Analyze whether your customers actually need it and whether adding it will draw the right kind of customers before you start building it, just like you would with any other new feature. There is no point in wasting all of your time bloating your product.

Before we actually started building anything, we added it to the roadmap to see if anyone was interested in it and to gauge interest. Following best practices for roadmapping, we kept it general enough: we simply stated “SSO,” without going into detail about which providers or functionality would be supported, and we omitted any timeframes that might have caught us off guard.

Sure enough, there was interest. With it on our roadmap, we were able to assess and contrast interest in various SSO providers and demonstrate its value. When we launched, we had a list of customers to contact in order to get feedback and insights because we had received enough requests from customers. We knew what they needed right off the bat. Plus, when the upgrade became available, we had a large group of people to approach.

JB: Just because you built for one integration doesn’t necessarily mean that building for the next will be simple. We integrate with a number of applications with very similar concepts but different names, such as Trello’s use of cards, Github’s use of issues, and JIRA’s use of tickets. Although the user’s integration requirements are fairly similar, careful consideration must be given to how each system will be implemented. We must stay on top of changes to the third-party provider’s system and make sure to fix our integration whenever they occur because each API is managed by a different company.

To organize our list of known limitations or peculiarities with each provider, we must maintain a matrix chart outlining all of our integrations and functionality; otherwise, we would never be able to stay on top of them. It’s best to outline these as you go. If your product supports various integrations, you’ll later appreciate the thorough documentation.

GHM: Integrating a third-party product is essential when the primary added functionality addresses a significant market issue, falls outside of your organization’s core competencies, and significantly shortens and lowers the cost of the development cycle. When the third-party product is viewed as a commodity and when the third-party organization is a dominant player in their market or vertical are two additional important justifications for integrating.

GHM: The third party organization must be as motivated to integrate as your company is in order for large integration efforts to move forward quickly. Both parties must share the same sense of urgency. This can be created by mutual customers. The integration project may easily stall or fail if the third party is not coerced beyond the licensing revenues and agreement penalties.

GHM: The following issues with projects have come up time and time again: 1) poorly defined roles and responsibilities on one or both sides of the integration; 2) claims made by third parties that they “can provide” functionality when in reality they CAN BUILD it; and 3) lack of accountability when necessary changes and decisions need to be made.

CT: If the third-party functionality in your software/solution does not represent a fundamental component of your business or product value, feel free to integrate with a third party. If they are closely related, make sure you have the proper partnership agreement in place to best protect and advance both parties. Also, don’t forget about intellectual property!

CT: After weighing a number of business options, the decision to “build” may be made. It might occur if the “buy” option failed or if integrating the two businesses’ technological environments doesn’t make financial sense. Or you might have decided that your company needs total control over every experience in your solution. This will make it possible for your company to fully monitor and monetize the data, developments, and deliverables.

CT: Recognize all the dependencies and integration points in advance. Before the development process begins, involve all necessary teams in checkpoints in the hopes of preventing or at the very least minimizing future concerns and/or delays. Additionally, find a welcoming client who is willing to test/try this in their setting or environment as an early adopter and who is willing to share their success story in a public case study or press release.

When building capabilities, choosing to partner rather than do so internally is almost always a delicate decision. It frequently needs support from numerous cross-functional teams, and there’s always the chance of disclosing sensitive intellectual property. Additionally, an organization (typically the individuals who came up with the idea: engineering, development, or product management) champions the inherent risks associated with creating the work in addition to pushing them onto a third party.

DE: Product teams should concentrate on developing unique components that are in line with the company’s core vision and competencies. The key is to remember that just because you can build something doesn’t mean you should. New technology is frequently built by engineering teams because they find it interesting or because it “would be easy to do.”

If you are not in the business of building chat programs, there will be very little gain in you building your own. For instance, if you need to add a chat function to your product, should you build it yourself or should you just integrate one of the very robust products out there? After months of engineering and design work, you’ll probably come up with a solution that is inferior to what other companies offer as a core service.

DE: Don’t just think about the technical implementation when planning a third-party integration; also take into account the entire product lifecycle. Spend some time comprehending its intended use and the user experience you want to offer. How will users enable or install the integration? What happens if the third-party service is unavailable? Will your users be completely unaware that it’s a third-party product?

Likewise, take into account the partnership you hope to establish with the third-party provider. Beyond the technical implementation, PMs also need to answer the question, “What’s in it for them?” Define the type of partnership you want, the terms, the responsibilities, the marketing opportunities, and who owns the customer in close collaboration with your business development team. Finalizing all of these issues is frequently more difficult than the technical implementation itself. Therefore, before committing to anything in your roadmap, be sure to plan for all of these.

CS: The absence of testing makes integrating third-party software the most difficult aspect. The four categories of testing are acceptance, systems, integration, and unit. It is crucial that the PMs working on this project map out the testing and integration phases so that they can work together to achieve the desired outcome, goal, or usability of the product.

Lack of testing from the beginning increases work and annoyance for the teams on both sides. Keep in mind that third parties are not employees of your company and that their willingness to assist you will be limited. Additionally, there is the partnership agreement. If possible, include some type of test/quality accountability agreement package.

First, product managers determine when it is right to integrate. The general consensus is that you integrate when the feature is not essential to your product’s functionality and you can benefit from increased market share or customer loyalty by doing so. Third-party integration gives both parties the chance to focus on what they do best. Try your absolute best to integrate with a specialist if you need something in your product that is outside of your area of expertise. Hopefully, the specialist is as motivated as you are.

Senior Product Manager for the NetSuite payment/invoice platform solution from AvidXchanges, which is used by large enterprises to automate the processing of invoices and pay vendors using virtual cards, ACH, wire transfers, and checks. Previously, five new products for managing supplier bids, contracts, compliance, site access, and various other interactions were developed for a two-sided marketplace. 6-time ProductCamp Austin and 2-time ProductCamp Silicon Valley presenter.

What is 3rd Party Software Integration?

Advantages of third-party integrations

The advantages of including third-party integrations in an application are as follows:

Attaches familiar applications

Through third-party integrations, the system you created can become more recognizable to users. They might already be familiar with using other applications, making it simpler for them to use the features of your application. Making users’ convenience a priority can help you make a good impression on them, maintain their interest, and draw in new clients who can use the product. For instance, you might offer users the option to sign in using well-known social media or email platforms rather than requiring them to create a separate personal account. Think about third-party systems with user-friendly, straightforward functions

Improves product functioning

The improvement of the products’ performance is another benefit of third-party integration. The functionality can be more versatile by integrating external systems to provide features that the original application lacked. For instance, a music streaming application’s initial design might not have included a feature for sharing playlists to social media profiles. Users will be able to share their works and draw in new music service subscribers thanks to the API integration that can be attached to the new feature. To increase the marketability of the product, you can use the current systems.

Differentiates from other businesses

It’s crucial to stand out because the product you develop may compete with others that target the same consumer demographics. The third-party integration can add something special to the application and influence users to choose it over rivals. You can give preference to external systems that are practical and well-liked by users, which is a thought that other businesses might not have considered. Adding the API to the product you created could give you a competitive advantage and boost sales and downloads. To learn how to differentiate your efforts from those of other similar businesses, look into their third-party integration efforts.

Boosts customer retention

Customer retention can be increased by outperforming competitors and providing engaging user experiences. While gaining new clients is frequently crucial, maintaining existing clients’ subscriptions and engagement with the product and service can be just as crucial. By integrating a third party, you can demonstrate to customers that your company values their business and their interests while also taking advantage of market trends. For instance, pursuing a third-party integration can link your product to the success of the external program if a chat application becomes popular among users. Professionals can conclude that they’re retaining their current users while attracting new ones.

Includes the necessary functions

Professionals can use helpful features with third-party integration instead of designing and installing the features themselves. Throughout the development process, the procedure can help the team save time and resources. Professionals can use an external system to ensure that the application works properly, which allows them to avoid time-consuming testing procedures. Users may be engaged by the application, which already has components that can improve their product. For instance, you can use bank applications that already exist and include the necessary components rather than designing payment options for users to make in-app purchases for goods.

How do third-party integrations work?

Application programming interfaces (APIs) from one application are attached to another through third-party integration. Its goal is to make the product capable of carrying out the same tasks as the program it integrated. For instance, experts may implement the API of a well-liked analytics tool on the website, giving users access to the practical features, to track the number of readers for a blog post. Here are the steps of the third-party integration process:

Disadvantages of third-party integrations

Here are the disadvantages of third-party integrations:

Relies on the performance of the API

Relying on the functionality of an external system is a disadvantage of third-party integration. Its malfunction may have an impact on the functionality of the integrated product, which may have an effect on the user experience. For instance, every program that integrates emails may have issues when an email application has bugs. Consider whether a third-party API’s performance is reliable when choosing one so that you can be sure that it will always function as intended. You can ensure the integration works best by thoroughly vetting the third-party options to prevent future blunders.

Adheres to specific regulations

Reviewing the rules for using the APIs can be crucial when determining your options for third-party regulations. You might be limited in your ability to modify the external application to simplify the product you’re building. It may be difficult for you to secure a consistent user experience and a competitive structure due to the regulations. To make sure you’re integrating an API that offers more freedom and that you can easily comply with its standards, you can consider alternative options to prevent problems.

Tips for selecting third-party integrations

Consider using the following advice to choose the third-party integration that is best for you:


How do 3rd party integrations work?

Any integration not created by Recruitee is referred to as a third party integration. Recruitee wants to use integrations to connect to as many other applications as possible. Rather than creating each integration independently, Recruitee encourages third parties to do so.

What does third party API mean?

What are third party APIs? Third party APIs are APIs made available by third parties—typically businesses like Facebook, Twitter, or Google—so that you can use their functionality on your website using JavaScript. Using mapping APIs to display personalized maps on your pages is one of the most obvious examples.

Why 3rd party integration is important?

Your business needs to respond to market demands quickly. Through third-party integrations, you can quickly add features and tools to your business processes that would otherwise require you to invest a lot of time in developing yourself. Even if you have the funds to create tools internally, it might take a long time to perfect them.

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