Failure to complete digital transformation will cost plenty

Published on the 19/02/2018 | Written by Newsdesk

Failed digital transformation_Mulesoft

Integration vendor identifies integration as a major contributing issue…

Over three quarters of companies expect to see a negative impact on revenue in the next 12 months if they fail to complete digital transformation initiatives. That’s the headline finding from integration software vendor MuleSoft’s Connectivity Benchmark Report 2018 on digital transformation initiatives and the business impact of APIs. It’s also kind of an obvious outcome, because as anyone in business knows, while the ethos of ‘failure is good’ may have taken hold, it has yet to be described as ‘cheap and cheerful’.

This year’s global study of 650 IT decision makers (ITDMs) specifically looks at how they are handling digital transformation, IT operations and change management.

It shows that while IT budgets have remained relatively static, ITDMs have seen project volumes grow, on average, by 27 percent. As a result, IT departments are being stretched even thinner – and, said MuleSoft in a statement, 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.

And, for a company which specialises in providing integration solutions, the news from the survey is good. It showed that 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 89 percent of ITDMs believe that integration challenges are slowing or hindering digital transformation within their organisations.

According to Gartner, worldwide IT spending is projected to total $3.7 trillion in 2018; MuleSoft said its survey indicates organisations 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.

MuleSoft said on average, organisations 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.

And 81 percent of ITDMs ‘admit’ (MuleSoft’s choice of word) that point-to-point integration has created some of the biggest headaches their organisations have ever seen; it added that ‘at least 80 percent agree “point-to-point integration must die in the next five years if organisations 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 organisations. 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 vice president 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 organisations can no longer afford to let it drain time, resources and budget.”

MuleSoft said organisations need to adopt more efficient IT operating models. 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 organisations are unable to discover and reuse the assets that have been created.

And that’s reflected in the company’s research. It found that 63 percent of ITDMs spend most of their time on “running the business” activity compared to innovation and development projects.  Some 93 percent ‘admit’ that their application development process could be more efficient. Just a third of organisations’ internal IT software assets and components are available for developers to reuse; 83 percent of ITDMs say their organisation does not always reuse software assets when it comes to developing new products and services.

MuleSoft said to deliver digital transformation and innovate quicker, it is necessary to ‘self-serve IT’; the route to doing so is by making IT assets discoverable and reusable via APIs.

That’s confirmed by the research: 93 percent of ITDMs believe that IT self service will be critical to their digital transformation success. More than a third (35 percent) of respondents stated over a quarter of their organisation’s revenue came from APIs.

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 organisations are suffering from the chronic integration issues of the past. However, through application networks, organisations 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,” Mason concluded.

Download the MuleSoft Connectivity Benchmark Report 2018.


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