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There is a major disconnect between what is expected of IT by the business and what IT teams can actually deliver, according to the 2016 Connectivity Benchmark Report from MuleSoft.
The findings show IT challenges, such as the burden of legacy systems, prevent them from effectively supporting business priorities. These challenges are not only slowing down their ability to complete digital transformation goals this year, but they are also directly putting revenue at risk. Due to these IT challenges, 66 percent of IT decision makers (ITDMs) said that their company’s revenue would be negatively impacted within six months. However, the survey found that IT teams are looking to APIs and reuse of existing applications, data and digital resources to speed up the pace of business.
Among the key results:
The Digital Transformation Paradox
Organizations are missing the “transformation” in “digital transformation.” The paradox is that although 96 percent of organizations are executing on digital transformation initiatives or plan to do so, most ITDMs have an antiquated notion of what it means – often favoring tactical improvements such as “going paperless” over more transformational initiatives such as creating new sources of revenue.
■ 82 percent of ITDMs said “going paperless” is a key part of digital transformation. This is followed by “developing web-based applications and services” (78 percent), and then “upgrading servers” and “moving to the cloud” (both 77 percent).
■ 44 percent said that their company’s top digital initiative is improving existing business processes, compared to 8 percent that indicated new revenue channels for existing services and/or new products as a priority.
IT Challenges to Meeting Digital Transformation and the Risks to Business
ITDMs are under pressure to deliver on line-of-business (LOB) initiatives quickly, with 57 percent saying that they are expected to complete them in six months or less. The burden of legacy technologies is hampering IT’s ability to deliver on transformative initiatives, as a majority (58 percent) have made less than 50 percent progress in completing digital transformation. With the dependence of revenue on digital transformation success, the stakes are high for IT teams to deliver on their company’s digital initiatives this year.
■ 65 percent of ITDMs agreed that IT plays the central role in digital transformation. However, just 18 percent are very confident that they will succeed in meeting this year’s goals, and only 5 percent have completed their company’s digital transformation initiatives.
■ The top 3 challenges to IT executing on digital transformation cited were business and IT misalignment (45 percent), time constraint (43 percent), and legacy infrastructure and systems (39 percent).
■ While 81 percent of ITDMs are still investing the same or more in legacy systems, only 14 percent are using these technologies to fulfill LOB requests and projects quickly.
■ 66 percent said that these challenges to completing digital transformation, if not resolved, will negatively impact their company’s revenue within six months.
APIs Speed Pace of Business
With the pressure to deliver on LOB needs and meet digital transformation quickly, IT teams are responding to their challenges by driving speed and agility through the use of APIs.
■ 56 percent have an API strategy in place. Another 35 percent sense the urgency to have one in place by the end of 2016.
■ Of the ITDMs who have an API strategy or plan to have one, 52 percent said that a top driver for leveraging APIs, following software and data integration, is increasing speed and enabling IT to create self-serve capabilities that the business can consume.
■ 44 percent said that building and managing APIs is a top way for IT to complete digital transformation projects more quickly.
■ 44 percent also said that reuse would significantly increase the speed of completing digital transformation. Organizations with more than 100,000 employees saw even more value in reuse, with 63 percent saying that its impact on pace of digital transformation projects would be significant.
“We are at an interesting time — when most companies, across industries, are technology companies at their core. CIOs and IT teams have the opportunity to bring digital opportunities to the table and ultimately impact business models and the bottom line. Translating ‘digital transformation’ into actionable initiatives for customer engagement, employee empowerment, or new product and service offerings can be a challenge,” said Bill Briggs, CTO, Deloitte Consulting LLP. “MuleSoft’s survey shows that digital transitions can challenge IT to grow beyond ‘business as usual.’ As catalysts, CIOs need to inspire tomorrow - harnessing new technologies to drive new capabilities across the organization. But they also need to get there from today, modernizing their core IT stack and building the foundation for innovation and growth.”
“Becoming a digital business is more than just technology and tactical implementations like going paperless. It’s clear that cultural transformation along with IT and business alignment are missing pieces in today’s efforts to go digital,” added Ross Mason, Founder and VP of Product Strategy, MuleSoft. “This presents a large opportunity for IT teams to shift their role from the centralized support function to the business enabler responsible for supporting agility, innovation and business outcomes. We’re seeing our customers do this by applying an API-led approach to connectivity, leveraging APIs and the ability to deliver reusable assets that the business can build on top of to agilely respond to rapidly shifting market conditions.”
Methodology: Between March 25th and March 28th, 2016, MuleSoft surveyed 802 ITDMs globally across Australia, the Netherlands, Hong Kong, Singapore, Sweden, the United Kingdom and the United States. The survey assessed how organizations of all sizes are executing on digital transformation, IT challenges and technologies used to meet business goals. The survey’s margin of error is +/-2.85 percentage points at a 90 percent confidence interval.