Published on the 22/02/2023 | Written by Heather Wright
Companies look to APIs and automation…
It’s a business pain point most know only too well, and new research confirms that integration challenges are not just a pain, they’re slowing companies’ digital ambitions and causing infrastructure issues and risks.
MuleSoft’s eighth annual Connectivity Benchmark Report shows the number of applications in Australian organisations (sorry, New Zealand, there are no Kiwi results in this one) have increased nearly 10 percent in the past year, to 1,032, highlighting the complexity of the digital landscape. But 68 percent of those applications are not integrated with other applications used by the business, creating data silos and the flow on effects, including increased costs, duplicated work, productivity bottlenecks and disconnected experiences.
“Integration efforts are lagging.”
It’s a situation that’s proving costly – not just in terms of money spent building custom integrations (read on for those eye-watering figures) but also in the slowing of digital transformation efforts – something 84 percent of Australians said was happening, causing infrastructure and major risks as IT budgets come under increased scrutiny.
And the cost of failing to complete digital transformation initiatives successfully? Australian ITDMs say their organisations stand to lose an average of $9.3 million for failure to complete, on par with the global figure of $9.5 million.
They’re also reporting more hassles than their global counterparts when it comes to existing IT infrastructure making it difficult to make changes to a particular system or application – something 68 percent of Australian ITDMs reported, versus 54 percent globally.
However, the 32 percent of apps integrated in Australia is actually ahead of the global average of just 29 percent. Unsurprisingly, globally application numbers were also up, from an average of 976 in 2022’s report to 1,061 this year.
The report, in collaboration with Deloitte Digital, says globally integration challenges are slowing or hampering digital transformation in 80 percent of organisations, while 90 percent admit being challenged by data silos, with integration of siloed apps and data topping concerns, alongside skills shortages and risk management and legal implications, at 36 percent.
Of course, Mulesoft specialises in integration technology and as with most vendor sponsored reports, this one is designed to highlight a problem which the vendor can help you solve – in this case with its SaaS systems positioned as a critical integration platform.
The demand for data integration is one reason why Salesforce – of which Mulesoft is a division – is pushing its Salesforce Genie customer data platform.
Nonetheless integration clearly is a key challenge for many, if not most, businesses today and Australian and New Zealand companies aren’t escaping the issue.
The report says Australian organisations spent on average US$3.6 million building out custom integrations in the past 12 months. (Globally, that figure is much higher at US$4.7 million.)
And for 32 percent of the 100 Australian respondents, integrating siloed apps and data is the most significant digital transformation challenge.
There are multiple causes for data integration failure and challenges faced by companies include incorporating data-derived insights into user-facing applications, moving data from source systems into the data warehouse, reusing data sources across different user-facing applications and correlating data in the warehouse to derive insights.
Some companies are using real-time data technologies to integrate, ingest and store real-time data streams at scale, with built-in connectors that bring in data from multiple channels, including web, mobile and APIs, legacy data through, and historical data from proprietary data lakes.
Matt McLarty, MuleSoft CTO, says there’s been significant investment and dedication from businesses looking to digitally transform, even with the current uncertain economic conditions, with some efforts even speeding up.
“However, integration efforts are lagging, and without this, businesses cannot realise the full value of their data and application capabilities,” McLarty says. “Integration tools and automation help close that gap, enabling productivity, efficiency and innovation gains that will allow businesses to achieve innovation gains that will propel businesses forwards.”
APIs are a cornerstone for digital businesses, enabling otherwise disparate apps to communicate.
Gartner reports that 98 percent of enterprises already use or are planning to use internal APIs. Mulesoft’s report puts that figure at 99 percent of organisations using some type of API, whether public or private, or a combination of the two.
That’s the path many digitally focused and cost-conscious Australian organisations are taking, turning to APIs to integrate apps and data to create exceptional customer experience and generate revenue.
The report says 51 percent of organisations have a mature strategy that enables non-technical business users to easily integrate apps and data sources using low-code tools.
That’s just behind the global average of 56 percent.
Those APIs are also helping drive revenue – Australian organisations say they’re generating an average of 42 percent of their revenue from APIs, ahead of the global average of 38 percent. As a result, 77 percent of Australian organisations have adopted a top-down API integration strategy to maximise the benefits of APIs.
While many of the organisations are using APIs for new projects and building integrations, they’re also being used to improve application development and being reused to build new products and services as companies embrace a more composable approach.
Automation too, is increasing in popularity with 25 percent of Australian organisations investing in robotic process automation to enable teams to automate business processes and tasks using bots.
Most though, are reporting a need for both automation and integration solutions across multiple departments.
