Digital transformation targets are being stalled by integration challenges

Transform or die.

It appears organisations are heeding this stark warning, with 97% — according to a report from Mulesoft — currently undertaking or planning digital transformation initiatives. However, integration challenges are hindering efforts for 84% of organisations.

Close to half of all 650 respondents (43%) reported more than 1,000 applications are being used across their business, but only 29% are currently integrated together, trapping valuable data inside dreaded silos.

To maintain and drive these digital initiatives, IT’s role is changing — moving away from the mundane into the innovation game. However, Mulesoft’s report suggests that IT is struggling to keep up with business demands, as 64% of respondents indicated they were unable to deliver all projects last year.

This isn’t going to let up either, with project volumes are expected to grow — survey respondents predict, on average, a 32% increase this year.

91% of organisations believe revenue will be negatively impacted if digital transformation initiatives aren’t successfully completed

‘The IT delivery gap is widening as new technologies enter the scene’

The new demands of digital mean that IT is changing from a tactical function to a business catalyst.

However, the increasing number of projects IT is expected to deliver is putting the previously overlooked department under significant strain. They need support.

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On top of this, with a growing investment in new technologies, organisations are seeing integration challenges hinder digital transformation initiatives — don’t just throw a shiny

• 84% of respondents claim integration challenges are slowing digital transformation progress. In particular, data silos created business challenges for 83% of respondents.
• Legacy infrastructure and systems was the most frequently reported challenge to digital transformation — 59% of IT leaders say their legacy infrastructure makes it hard to introduce new technologies like artificial intelligence (AI), big data and the Internet of Things (IoT).
• Still, the majority (69%) of IT’s time remains dedicated to ‘keeping the lights’ on compared to innovation. Further compounding the issue, 77% of respondents saw a budget increase of less than 10% this year, while 31% reported that budgets had either remained flat or decreased.

IT’s new role as a business catalyst

Despite the hurdles, IT’s role is continuing to expand. This is driven by a greater need for support across different lines of business. As companies race to digitally transform, what was once an IT-specific need for integration has now expanded to business units across the organisation.

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• 92% of respondents say their company’s integration needs span beyond IT to encompass a wide range of business functions, including business analysts (49%), data scientists (42%), human resources (37%) and marketing (36%).
• IT and business leaders are more aligned than ever before: respondents who identified business and IT misalignment as a major challenge dropped from 43% last year to 29% this year.
• The alignment between IT and the business goes as far as sharing key performance indicators (KPIs). Of the respondents currently undertaking or planning to undertake digital transformation initiatives, more than three quarters (77%) cite increased business efficiency as a goal this year and 71% cite improved customer experience as a goal.

“Today, businesses are competing on speed and agility as they race to meet customer expectations. As a result, every organisation is undergoing digital transformation in order to offer a completely connected customer experience. It has put integration in the spotlight as a top-level business priority,” said Greg Schott, CEO, MuleSoft.

“With the IT landscape only growing more complex, organisations can build their applications networks one API at a time, providing businesses with an agile foundation for success in the digital era.”

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Preparing for the future, one API at a time

IT will need to become a business enabler to make a success of digital transformation efforts. How? Organisations will need to turn to API strategies to support reuse and self-service. By creating reusable assets, IT enables the business to increase overall delivery speed and capacity.

• 91% of respondents from organisations that own public and/or private APIs are experiencing significant business outcomes as a result, including greater productivity (53%), decreased operational costs (33%) and increased revenue growth (29%). For 36% of respondents, APIs are generating more than 25% of their organisation’s revenue.
• Respondents who manage their APIs like products were more likely than their peers who own APIs to report increased innovation (49% versus 40%) and greater agility across teams to self serve IT (58% versus 46%).
• Respondents who always reuse software assets when developing new projects were more likely than their peers who own APIs to report increased productivity (63% versus 53%) and revenue growth (41% versus 29%).

“As organisations across all industries digitise their business models, the ability to connect and reuse technology assets becomes a critical capability,” said Steve Stone, technology advisor and former CIO of several Fortune 500 brands including Lowe’s and L Brands.

“Reusable APIs serve as building blocks in the application network, enabling new business models and simplifying the expansion of a connected partner ecosystem. MuleSoft’s Connectivity Benchmark Report demonstrates the importance of adopting a comprehensive API strategy in driving desired business outcomes.”

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Nick Ismail

Nick Ismail is the editor for Information Age. He has a particular interest in smart technologies, AI and cyber security.

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