Failure to Complete Digital Transformation Initiatives Will Negatively Impact Revenue
March 26, 2018
Share this

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, according to the MuleSoft Connectivity Benchmark Report 2018.

While IT budgets have remained relatively static, IT Decision Makers (ITDMs) have seen project volumes grow, on average, by 27 percent. As a result, IT departments are being stretched even thinner. Most concerning, the research reveals an IT delivery gap, with two-thirds of ITDMs admitting they were unable to deliver all projects asked of them last year.


Integration Headaches are Creating an IT Delivery Gap and Hindering Innovation

One of the main contributors to the growing IT delivery gap is integration, which continues to be a significant drain on time, budget and resources. The survey results show the vast majority (89 percent) of ITDMs 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 Mulesoft's 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 ITDMs 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 ITDMs; 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.”

“When it comes to digital transformation, it is no longer a case of ‘if’ but ‘when’ for organizations. However, there is growing impatience at a business level to make the goals of digital transformation a reality right now, as those that fall behind will start to lose revenue and market share fast,” said Ross Mason, Founder and VP of Product Strategy, MuleSoft. “Today, CIOs and IT decision makers are under a huge amount of pressure to meet business expectations, but it’s clear that they are struggling to keep up. Integration challenges are creating an IT delivery gap, and organizations can no longer afford to let it drain time, resources and budget.”

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 ITDMs continue to face the age-old dilemma of ‘keeping the lights on’ versus innovating. 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.

■ ITDMs continue to spend the majority (63 percent) of their time on “running the business” activity compared to innovation and development projects.

■ 93 percent of ITDMs 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 ITDMs 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 of ITDMs 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, ITDMs 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.

Marshall Van Alstyne, MIT digital fellow and Boston University professor, commented: “As the digital economy continues to grow, more organizations are starting to realize the benefits of an API strategy and the financial benefits it can bring. MuleSoft’s Connectivity Benchmark Report corroborates our own findings that there is a positive relationship between the intensity of API usage and financial performance.”

“Digital transformation isn’t just a matter of buying new software and hoping it solves all problems. In today’s digital economy, more data, applications and devices need to be connected than ever before – yet organizations are suffering from the chronic integration issues of the past. However, through application networks, organizations can make more of their IT assets reusable and make application development much more efficient. This will truly transform how IT functions in the modern enterprise and deliver greater value to the business,” added Mason.

Methodology: The survey was commissioned by MuleSoft and independently carried out by Vanson Bourne. The total sample size was 650 IT Decision Makers (ITDMs) working at organizations with 1,000+ employees: US (250 ITDMs), UK (100 ITDMs), Germany (75 ITDMs), Netherlands (50 ITDMs), Australia (50 ITDMs), Singapore (50 ITDMs) and China (75 ITDMs). Fieldwork was undertaken in November / December 2017. The results in the 2018 Connectivity Benchmark Report cannot be compared to previous years due to the change in research firm and methodology.

Share this

The Latest

July 17, 2019

The 11th anniversary of the Apple App Store frames a momentous time period in how we interact with each other and the services upon which we have come to rely. Even so, we continue to have our in-app mobile experiences marred by poor performance and instability. Apple has done little to help, and other tools provide little to no visibility and benchmarks on which to prioritize our efforts outside of crashes ...

July 16, 2019

Confidence in artificial intelligence (AI) and its ability to enhance network operations is high, but only if the issue of bias is tackled. Service providers (68%) are most concerned about the bias impact of "bad or incomplete data sets," since effective AI requires clean, high quality, unbiased data, according to a new survey of communication service providers ...

July 15, 2019

Every internet connected network needs a visibility platform for traffic monitoring, information security and infrastructure security. To accomplish this, most enterprise networks utilize from four to seven specialized tools on network links in order to monitor, capture and analyze traffic. Connecting tools to live links with TAPs allow network managers to safely see, analyze and protect traffic without compromising network reliability. However, like most networking equipment it's critical that installation and configuration are done properly ...

July 11, 2019

The Democratic presidential debates are likely to have many people switching back-and-forth between live streams over the coming months. This is going to be especially true in the days before and after each debate, which will mean many office networks are likely to see a greater share of their total capacity going to streaming news services than ever before ...

July 10, 2019

Monitoring of heating, ventilation and air conditioning (HVAC) infrastructures has become a key concern over the last several years. Modern versions of these systems need continual monitoring to stay energy efficient and deliver satisfactory comfort to building occupants. This is because there are a large number of environmental sensors and motorized control systems within HVAC systems. Proper monitoring helps maintain a consistent temperature to reduce energy and maintenance costs for this type of infrastructure ...

July 09, 2019

Shoppers won’t wait for retailers, according to a new research report titled, 2019 Retailer Website Performance Evaluation: Are Retail Websites Meeting Shopper Expectations? from Yottaa ...

June 27, 2019

Customer satisfaction and retention were the top concerns for a majority (58%) of IT leaders when suffering downtime or outages, according to a survey of top IT leaders conducted by AIOps Exchange. The effect of service interruptions on customers outweighed other concerns such as loss of revenue, brand reputation, negative press coverage, or the impact on IT Ops teams.

June 26, 2019

It is inevitable that employee productivity and the quality of customer experiences suffer as a consequence of the poor performance of O365. The quick detection and rapid resolution of problems associated with O365 are top of mind for any organization to keep its business humming ...

June 25, 2019

Employees at British businesses rate computer downtime as the most significant irritant at their current workplace (41 percent) when asked to pick their top three ...

June 24, 2019

The modern enterprise network is an entirely different beast today than the network environments IT and ops teams were tasked with managing just a few years ago. With the rise of SaaS, widespread cloud migration across industries and the trend of enterprise decentralization all playing a part, the challenges IT faces in adapting their management and monitoring techniques continue to mount ...