Just recently I spent a day with an organization talking about a move from a product focus to a customer one. This organization is in the technology industry and has traditionally delivered fairly generic solutions to a predominantly technical audience. Increasingly, they see two drivers: firstly, the need to offer more customized and granular solutions and secondly to be able to speak to and ultimately sell to a more business-centric customer base.

I was struck that the issues facing this company are not unique – almost every organization I spend time with is looking to deliver products in a more flexible way and to tailor solutions that speak to a direct business need. Now some cynics might suggest that has always been the case but I’d argue that technological changes, along with market forces, make it a stronger trait than ever before.

Given that these thoughts were circling in my mind, I was interested to hear from MuleSoft the other day. MuleSoft, when it was first founded, was all about a fairly simple application integration platform. Today, however, they have moved beyond that and I think of them as a broad enterprise bus – yes they still offer application integration services, but are now all about connecting anything with anything – often times that is an API conversation rather than an application integration one.

MuleSoft just released the findings of a survey they commissions, the Connectivity Benchmark Report 2018 on digital transformation initiatives and the business impact of APIs. This year’s study specifically focused on how IT decision makers are handling digital transformation, IT operations and change management.

The survey of 650 IT managers reveals that four out of five businesses (81 percent) are expected to see a negative impact on revenue in the next 12 months if they fail to complete digital transformation initiatives. While IT budgets have remained relatively static, the respondents have seen project volumes grow, on average, by 27 percent. As a result, IT departments are being stretched even thinner. The research also reveals an IT delivery gap, with two-thirds admitting they were unable to deliver all projects asked of them last year.

Obviously, there is more than a little self-serving in the survey, and MuleSoft is quick to point out that integration is a big contributor to this IT delivery gap (spoiler alert: MuleSoft can solve that part of the problem). But vested interests aside, there are some valid points raised. Among the key results of the survey:

Integration headaches are creating an IT delivery gap and hindering innovation

As stated already, one of the main contributors to the growing IT delivery gap is integration. The survey results show the vast majority (89 percent) of respondents believe that integration challenges are slowing or hindering digital transformation within their organizations.

  • According to Gartner, “Worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 4.5 percent from 2017.” Based on our survey results, organizations are spending nearly a quarter (22 percent) of their annual IT budgets on integration and thus could equate to over $800 billion spent on integration in 2018.
  • On average, organizations are using 1,020 individual applications across their business. However, on average, a relatively small number (29 percent) of these applications are currently integrated or connected together.
  • A significant number (81 percent) of respondents admit that point-to-point integration has created some of the biggest headaches their organizations have ever seen. This is clearly a source of frustration for many of them; in fact, at least 80 percent agree “point-to-point integration must die in the next five years if organizations are to reduce costs, deliver on business needs faster, remain competitive, deliver innovation faster, and extract more value from data.”

Inefficient IT operating models are slowing the pace of change

It is clear that organizations need to adopt a more efficient IT operating model. Yet, this is easier said than done as practitioners continue to face the age-old dilemma of ‘keeping the lights on’ versus blue-skies innovation. Furthermore, when it comes to building new applications and services, it is very common for development teams to work in isolation, meaning organizations are unable to discover and reuse the assets that have been created.

  • Respondents continue to spend the majority (63 percent) of their time on “running the business” activity compared to innovation and development projects.
  • 93 percent admit that their application development process could be more efficient.
  • Just a third of organizations’ internal IT software assets and components are available for developers to reuse. 83 percent of respondents say their organization does not always reuse software assets when it comes to developing new products and services.

API strategies are delivering greater efficiency, innovation, and revenue

For organizations to deliver digital transformation and innovate quicker, they need to enable self-serve IT, where the wider business can do more on its own without relying on central IT for each project. By making IT assets discoverable and reusable via APIs, organizations can become more agile and competitive to drive revenue.

  • 93 percent believe that IT self-service will be critical to their digital transformation success. From those organizations that own APIs, more than half (58 percent) have been able to leverage them to increase productivity; while nearly half (48 percent) have increased innovation.
  • By leveraging APIs, organizations have been able to increase employee engagement and collaboration (43 percent), meet line-of-business demands quicker (35 percent), increase IT self-service (35 percent) and decrease operational costs (34 percent).
  • On average, respondents reported that a quarter of their organization’s revenue is now generated from APIs and API-related implementations. More than a third (35 percent) of respondents stated over a quarter of their organization’s revenue came from APIs.

MyPOV

As I said, the findings play into the hands of MuleSoft’s highly skilled salesforce. From this perspective, the survey is undeniably self-serving. But looking beyond those aspects, the survey highlights some very real issues that organizations will increasingly face – moving fast is often, at least for organizations with any degree of legacy technology – predicated on tying together disparate systems. Undoubtedly integration is one of the key drivers of innovation and agility going forward and it is something that all organizations would be advised to think about sooner rather than later.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

1 Comment
  • Thanks for the useful info! It is always hard to predict exactly which trends will become the most disruptive. When most people think about technology, they often think about physical devices that are electrical or digital, but in fact technology encompasses far more than that. I know one reliable local company Beta Solutions in Palmerston North. They offer full-service electronic engineering consultancy and provide a range of mechanical services. Many useful technological innovation in the latest few years were implemented with their help, including 3D printed full working production-ready models and software.

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