7 Ways to Gain a Competitive Advantage in the Application Economy
New Research Finds Most Businesses Will be Software-Driven in 3 Years
July 09, 2015

Aruna Ravichandran
CA Technologies

As companies transform into software-driven enterprises, bringing high-quality applications to market faster becomes one of the most critical differentiators. According to a global study — The Battle for Competitive Advantage in the App Economy — commissioned by CA Technologies 43 percent of those surveyed believe that becoming a software-driven enterprise is a critical driver of competitive advantage today, rising to 78 percent in three years.

Increased agility and faster time to market top the list of competitive strategies for companies in the application economy; and, according to respondents who have already begun adopting more advanced software strategies, this transformation is having significant impact on their time to decision: 45 percent claim this today, and 61 percent expect it to be the case in the next three years.

Conducted by Oxford Economics, the study surveyed senior business and technology executives around the globe about application strategy and its impact on business outcomes. The results clearly show that companies are adapting to the application economy at a rapid and accelerating pace, and are rethinking competitive advantage and differentiation in the process.

According to the study, becoming a more software-driven business also has a positive impact on market share (47 percent), the development of new products and services (42 percent), and financial performance (36 percent) — all trends that respondents see accelerating.

Additional key findings include:

• More than half of respondents (51 percent) say they have invested in newer forms of software (mobile apps, API-enabled software, etc.) over the past three years, and nearly as many say they will increase their level of investment over the next three years

• 54 percent are developing new strategies for customer interactions

• 49 percent of respondents are bringing more software development back in-house and 47 percent have or are planning to use M&A to increase app development capabilities, indicating software’s strategic role

“It’s no longer enough for companies to have superior products or services. Today, success depends upon delivering a superior customer experience,” said Otto Berkes, CTO, CA Technologies. “As companies undergo digital transformation, they must focus on the customer experience since it will be a key differentiator in today's application economy.”

Despite significant transformation of companies into software-driven enterprises, results from this survey indicate that the biggest changes are still ahead of us.

Based on key insights from the data and interviews with respondents, the following seven points represent rules of engagement that companies should follow as they seek competitive advantage:

1. Be ready to break things

When organizational change is inevitable, rules may get bent. And change is happening — fast. Nearly half of respondents believe that becoming a more software-driven business has had an impact on time-to-decision, and another 37 percent say that internal operations have been deeply affected.

2. Squeeze the value out of data

Respondents say they are proficient at marketing directly to consumers (59 percent say they are very or highly effective), but few (only 22 percent) have all the details — like tracking customer preferences — nailed down.

3. Learn to listen

Using social media well is critical to interacting with customers and business partners alike. More than 40 percent of respondents say it is a must-have skill in the new environment. One key thing to remember is that these tools are not just new ways to push information out — they are great ways to capture intelligence as well.

4. Guard data fiercely

And know what you are protecting. Protecting customer data is a fundamental rule of engagement, and companies are investing in bigger budgets and new tools to get the job done. Sixty percent of respondents say they are spending more to protect customer data, and even more are doing the same to safeguard internal information.

5. Bring innovation to collaboration

Old barriers do not apply in the application economy. Nearly half of respondents say that bringing together security executives with the heads of business units is enabling new business opportunities.

6. Give the people what they want

In the app economy, customers expect quick, intuitive interaction. They will not countenance outages, data loss, or downloads that take longer than a few seconds. With an enormous increase in revenue driven by customer interactions with apps expected in three years, getting this right is an existential necessity.

7. Remember that culture eats strategy for lunch

Organizational resistance is a given whenever change occurs. Nearly 40 percent of respondents say the biggest obstacle to becoming more adept at software and application development is a culture that won’t support it.

Survey Methodology: In March 2015, Oxford Economics and CA Technologies surveyed 200 senior business and IT executives with knowledge of and responsibility for their company’s advanced software strategies. The respondents came from the Americas (56 percent), Europe (29 percent) and Asia (15 percent), and included industries ranging from manufacturing and professional services to retail, consumer products, financial services, energy, and healthcare.

Aruna Ravichandran is VP, Product & Solutions Marketing, DevOps, CA Technologies
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