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58% of firms increase productivity through APIs, as they struggle with integration and inefficient IT models

MuleSoft has released the findings of its Connectivity Benchmark Report 2018, which looks at digital transformation initiatives and the business impact of APIs. In particular, this year’s study looks at how IT decision makers are handling digital transformation.

The survey found that failure to achieve digital transformation will make a negative impact in 81% of businesses in the next year. IT budgets have remained relatively static, but project volumes have grown by 27% a result, increasing the burden on IT departments. This resulted in two thirds of projects not being delivered on time.

IT integration, budget and resources

IT integration continues to be a significant drain on time, budget and resources. The survey results show the vast majority (89%) of IT decision makers believe that integration challenges are slowing or hindering digital transformation within their organisations.

MuleSoft also found out that organisations are splashing nearly a quarter (22%) of their annual IT budgets on integration – potentially over $800 billion in 2018.

On average, organisations are using 1,020 individual applications across their business. However, on average, 29% of these applications are currently integrated or connected together.

An 81% of those surveyed admit that point-to-point integration is the main point of contention. A least 80% 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.”

“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,” said Ross Mason, founder and vice president of product strategy, MuleSoft. “Integration challenges are creating an IT delivery gap, and organisations can no longer afford to let it drain time, resources and budget.”

Inefficient IT models lack innovation

The report highlights the old dilemma of ‘keeping the lights on’ versus innovating, which is made even more difficult by the fact that assets are hardly reused within an organisation, as teams work in isolation.

Just a third of organisations’ internal IT software assets and components are available for developers to reuse. 83% of decision makers say their organisation does not always reuse software assets when it comes to developing new products and services.

Another issues is that IT decision makers barely spend the majority (63%) of their time on “running the business” activity compared to innovation and development projects. Meanwhile, 93% of IT decision makers admit that their application development process could be more efficient – understandable, as it’s hard to say there is not even some room for improvement.

API strategy might just be the way

By making IT assets discoverable and reusable via APIs, organisations can become more agile and competitive to drive revenue.

Out of those surveyed, 93% of IT decision makers believe that IT self service will be critical to their digital transformation success. From those organisations that own APIs, more than half (58%) have been able to leverage them to increase productivity; while nearly half (48%) have increased innovation.

Leveraging APIs has seen 43% of organisations increase their employee engagement and collaboration, 35% meet line-of-business demands quicker, 35% increase IT self-service and 34% decrease operational costs.

On average, these organisations make a quarter of their revenue through APIs and API-related implementations, with 35% of respondents stating it was over a quarter.

Marshall Van Alstyne, MIT digital fellow and Boston University professor, said that it was a matter of time until companies realised the importance of an API strategy. He highlighted that the report corroborates the positive relationship between 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 organisations are suffering from the chronic integration issues of the past,” added Mason.

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