MuleSoft surveyed 800 IT leaders, which are defined as those who hold a managerial position or above, from global enterprise on the state of digital transformation and connectivity. The fifth annual Connectivity Benchmark Report for 2020 identified these key takeaways:
- Data silos are slowing digital transformation: Digital transformation remains top of mind for IT leaders as they struggle to meet customer expectations. Data silos and increasing pressures on IT are among the top challenges slowing transformation initiatives.
89% of IT leaders say data silos are an obstacle to digital transformation.
- Organizations are reaping the benefits of APIs: IT leaders are turning to APIs as the tissue that integrates their applications, systems, and data. Organizations that take this approach are realizing increased productivity, innovation, revenue, and more.
80% of IT leaders say their organization uses public and/or private APIs.
- IT teams with an API strategy drive greater business outcomes: Organizations that adopt any form of API strategy -- whether it is project-by-project or mandated by leadership 00 complete more business initiatives, increase innovation, drive productivity, and more.
89% of organizations that use APIs also have some form of strategy in place.
- Top-down API strategies are the most effective: API strategies that are mandated by leadership drive the highest rates of productivity and innovation and can expand integration skills to teams outside of IT.
Organizations with a top-down API strategy are 67% more productive than those with a bottom-up strategy.
Data silos are slowing down digital transformation efforts
All industries are facing pressures to meet the demand for connected experiences. Ninety-two percent of organizations are currently undertaking digital transformation initiatives or plan to in the next year. However, integration challenges are slowing digital transformation initiatives for 85% of IT organizations. Integration needs from business teams are increasing demand on IT. Here are the key findings:
- The average organization has 900 applications, and only 28% are currently integrated.
- Eighty-nine percent of IT leaders report data silos are creating business challenges for their organizations' digital transformation initiatives, up from 83% in 2019.
- IT leaders report a 40% increase in project requests this year, compared to a 32% increase last year.
- More than half (59%) of IT leaders report they were not able to deliver all of the projects they committed to last year.
- In 2020, IT projects are projected to grow by 40% while budgets will only increase by <10%.
In addition to running the business and integrating systems, IT teams are responsible for implementing technology. As new technology investments increase, so does the burden on IT. The top technology investments for 2020 include security (53%), big data and analytics (48%), multi-cloud strategy (41%), and AI/machine learning (41%). These technologies will all present new integration needs as organizations connect data to make these investments successful.
Digital transformation is top of mind for IT leaders and, as survey results show, this transformation is tied to key business initiatives, including modernizing legacy systems, migrating applications to the cloud, automating business processes, and other critical business goals.
IT leaders recognize the need to accelerate digital transformation.
- Ninety percent of IT leaders said their company's revenue will be negatively impacted if they fail to complete digital transformation initiatives in the next one to five years.
- Nearly three-quarters (73%) of them predict their organization will lose revenue if they don't digitally transform in the next 12 months.
- With IT teams spending 69% of their time keeping the lights on, it's no wonder innovation remains low.
Zeroing in on APIs to power digital transformation
According to the report, to turn digital transformation into reality, organizations are zeroing in on integration via APIs to address data silos. In fact, 60% of IT leaders report integration via APIs is critical to their digital transformation strategy.
Here are some key findings:
- Eighty percent of IT leaders surveyed said that their organization is using APIs.
- Eighty-one percent of IT teams that leverage APIs reported completing all or nearly all projects asked of them during the year, while only 64% of IT teams that do not use APIs reported the same.
- IT teams that adopt API-led connectivity are 69% less likely to report significant integration challenges.
- Organizations that adopt APIs realize increased productivity (54%), innovation (47%), and agility (46%).
Using APIs to develop new projects or build new integrations has enabled IT teams to realize a number of benefits across the business. Organizations are seeing a surge in productivity, innovation, agility, as well as other benefits. IT leaders report that an average of 31% of their company's revenue is generated from APIs.
Accelerating transformation with an API strategy
Nearly all organizations have some form of API strategy in place. Of the organizations using APIs, the majority (89%) have some form of API strategy in place. On one end of the spectrum lie organizations that take a bottom-up approach by developing strategies on a project-by-project basis. More than half (54%) implement a project-by-project strategy or a strategy that is only implemented in parts of the business. Key findings include:
- IT teams with an API strategy reported experiencing 17.5% higher productivity, compared to those without a strategy.
- Organizations that implement APIs see increased business benefits, including increased innovation (54%) and greater agility across teams to self-serve IT (46%).
- A small percentage (26%) of respondents are exposing APIs to third parties to increase innovation with partner and external developer ecosystems.
- While the vast majority of organizations have adopted public and/or private APIs (80%), more than half (54%) are in the early stages of development and implement APIs on a project-by-project basis or set API strategies in discrete parts of the business.
The leadership mandate
While IT leaders report greater productivity and collaboration with any form of an API strategy in place, one approach leads to greater business value: a leadership mandated strategy. When business leadership mandates a company-wide API strategy, IT leaders report higher rates of project completion, productivity, collaboration, and API generated revenue.
A leadership-mandated approach requires IT-business conversations to help business leaders understand the value of a company-wide API strategy. Almost all IT leaders (96%) say that such conversations do happen in their organizations, and they've seen benefits as a result -- including business transformation (54%), innovation (52%), and increased customer engagement (51%). However, the survey found that company-wide strategies are rare -- only 12% of IT leaders report they are implementing one. More key findings on leadership mandated API strategy:
- Organizations with a leadership-mandated API strategy are 36% more productive than those that adopt other strategies, and, more specifically, they are 67% more productive than those with a bottom-up strategy.
- Fifty-six percent of IT teams with a leadership mandated API strategy reported an increase in employee collaboration and engagement, compared to only 37% of those with a bottom-up strategy.
- Forty-two percent of organizations with leadership mandated strategies rated non-technical teams' integration skills as "very good," compared to only 9% of organizations with a bottom-up strategy.
- Organizations with a leadership-mandated strategy realize 64% more revenue than those with no clear strategy.
The bottom line, organizations that prioritize a company-wide, mandated strategy are building a business that is ready for change, with the foundation to act upon technology and market trends at scale.
Digital transformation recommendations
The Mulesoft Connectivity Benchmark Report from Salesforce recommends the acceleration of digital transformation with a strategic approach to API-led connectivity. For IT to move faster and deliver on digital initiatives, the reports conclude with these four recommendations:
- Eliminate data silos by using APIs to unlock and unify data
- Establish an API strategy that fits your organization
- Measure the value of APIs through business KPIs
- Elevate the benefits of APIs and integrations
Every digital transformation must begin and end with the customer in mind. Today, IT must work smarter, faster and be more adaptive to anticipate and deliver against the highest levels of demand from both internal and external stakeholders - customers, business partners, employees, and communities. For IT to deliver greater business and stakeholder value, business leadership must mandate a company-wide API strategy, which will lead to higher rates of project completion, productivity, collaboration, and API generated revenue.
To learn more about the MuleSoft 2020 Connectivity Benchmark Report, visit here.