New Report Shows 3 out of 4 Organizations Expect Negative Revenue Impact if They Don’t Digitally Transform in the Next 12 Months
- Integration is often the No. 1 reason new initiatives fail
- 85% of organizations report integration challenges slow down the pace of their digital transformation, with more than half still providing disconnected customer experiences across channels
MuleSoft, provider of the leading platform for building application networks, announced the findings of the 2020 Connectivity Benchmark Report on the state of IT and digital transformation. The global survey of 800 CIOs and IT decision makers (ITDMs) in organizations with at least 1,000 employees revealed that digital transformation has widely become a strategic imperative for businesses with nearly all respondents (92%) currently undertaking initiatives or planning to in the next year. However, significant integration challenges exist for 85% of organizations – stalling digital transformation and negatively impacting revenue, speed to market and customer experiences.
Businesses are under increasing pressure to digitally transform, and for good reason: three out of four expect a decline in revenue if they fail to do so in the next year. They’re also struggling to overcome a common obstacle: of the almost 900 different applications used by the average enterprise, only 28% of those applications are integrated – preventing a single view of the customer. As a result more than half of businesses are unable to provide connected experiences for customers.
“CIOs are uniquely positioned to lead their organization’s digital transformation. IT leaders across all industries must be focused on creating a new operating model that accelerates the speed of delivery, increases organizational agility and delivers innovation at scale,” said Simon Parmett, CEO, MuleSoft. “With an API-led approach, CIOs can change the clock speed of their business and emerge as the steward of a composable enterprise to democratize access to existing assets and new capabilities.”
The 2020 Connectivity Benchmark Report highlights new opportunities and challenges for businesses as they digitally transform:
IT must innovate faster, and with fewer resources
Traditional IT operating models are broken and organizations are being forced to find new ways of accelerating project delivery and reusing integrations. At least half of respondents say their IT budgets will increase by less than 10% this year despite their project workloads skyrocketing by 40% (up from 32% last year). Yet 82% of businesses are now holding their IT teams accountable for delivering connected customer experiences.
- When IT can’t keep up with business demands, projects slip: More than half (59%) of organizations weren’t able to deliver on all of their projects last year, creating a backlog for 2020.
- IT faces the constant balancing act of keeping the lights on and innovating: With current IT operating models, nearly 70% of IT’s time is spent running the business, instead of focusing on innovation and development.
- Organizations struggle to maintain the pace of our digital world: Nearly two-thirds (64%) of ITDMs find it difficult to introduce new technologies because of their IT infrastructures.
- New technology investments only increase the need for integration: The top four IT investment priorities for 2020 are security (53%), big data and analytics (48%), multi-cloud strategy (41%), and AI/machine learning (41%) – all of which will require deep integration with existing systems.
Businesses are failing to capture the full value of APIs without a company-wide strategy
Organizations are increasingly leveraging APIs as building blocks to streamline integration while supporting reuse and self-service across the enterprise. In fact 80% of businesses currently use public or private APIs. However, very few have developed a strategic approach to enable API usage across the business.
- Company-wide API strategies are necessary to drive true value and reuse: Only 12% of organizations are mandated by leadership to abide by a company-wide API integration strategy for all projects. More than half (54%) implement APIs on a project-by-project basis or use a strategy that’s siloed within certain parts of the business.
- Businesses don’t have an easy way to share APIs: Less than half (42%) of internal software assets and components (e.g., code, APIs, best practice templates) are available for developers to reuse. Most organizations (80%) also don’t have a completely effective way to share APIs or integrations.
- New business users are emerging, amplifying the need for reuse: Outside of IT, the top three business roles with integration needs include business analysts (40%), data scientists (38%) and customer support (38%).
- Citizen integrators lack critical internal resources: 70% of ITDMs say they have a good strategy in place to enable non-technical business users to easily integrate apps and data sources with APIs. Despite this high level of confidence, 67% don’t have a team that’s dedicated to driving the sharing and reuse of APIs.
API reuse is directly linked to speed of innovation, operational efficiency and revenue
By establishing API strategies that promote self-service and reuse, businesses put themselves in a much better position to innovate at speed, increase productivity and open up new revenue streams. More than half (52%) of organizations say that IT has generated the most business value by building reusable integrations that save time and money on future projects. Despite this success, only 42% of ITDMs are leveraging APIs to increase the efficiency of their application development processes.
- Most organizations are making integration harder on themselves by not designing APIs for reuse: Among organizations that leverage APIs, 52% use them as part of the development process for new projects and 52% use them to build integrations. However, less than half (46%) say their APIs are reusable, highlighting outsize opportunity for IT to be more effective in the delivery process.
- Organizations aren’t activating API ecosystems: Of those leveraging APIs, only 26% of organizations are driving innovation with partner and external developer ecosystems by exposing them to third parties.
- When designed with intent, APIs drive business outcomes: Organizations using APIs benefit from operational improvements such as increased productivity (54%), increased innovation (47%) and greater cross-team agility for self-serve IT (46%).
- APIs are the new revenue stream: On average, nearly a third (31%) of businesses’ revenue is being generated by APIs or by API-related implementations.