Application integration is still the biggest problem for many companies in their digital transition. This concludes Salesforce subsidiary Mulesoft in its annual Connectivity Benchmark Report. These integration problems create infrastructure problems and greater risks and higher costs of digital transition projects. Fortunately, there are also positive developments to report.
The annual survey reveals that many companies are working on their digital transition, but everything is not yet on track. About 80 percent of companies say they are especially struggling to integrate all their environments and applications. This is due in part to the increasing volume of applications. On average, companies now use 1,061 different applications. This is up 10 percent from 976 applications last year 2022.
Only 29 percent of all these applications are somehow integrated with each other. This creates more and more data silos, which in turn leads to rising costs, bottlenecks in productivity and lack of omnichannel experiences, according to the researchers. Applications that pose the biggest challenge in this regard include those located in silos.
Applications and associated APIs are very important to businesses. Mulesoft’s research shows that companies derive about 39 percent of their revenue from APIs. This was 35 percent in 2022. Moreover, three-quarters of the companies surveyed indicated that they have a top-down API integration strategy.
The fact that the digital transition is inhibited by this poor integration could cost companies a lot of money the 2023 benchmark continues. Companies could lose an average of $9.5 million in revenue if they fail to complete their transition. This is a higher amount than the $6.8 million of 2022.
Fortunately, most of the companies surveyed, 68 percent, indicate they are ahead in their digital transition. Only 10 percent report being behind. Another positive note in this context is that, on average, companies are investing more in their digital transition. While in 2022 companies were still spending an average of $9.4 billion for this purpose, including on hiring IT staff, in 2023 the average will be $11.7 million. More than three-quarters of respondents expect this budget to increase even further this year.
Furthermore, IT teams have succeeded in delivering digital transition projects faster. This is despite the fact that the number of projects did increase by 41 percent. Overall, nearly half of the respondents reported that IT projects were completed on time. The number of uncompleted IT projects fell from 50 percent in 2022 to 30 percent this year.
Other interesting conclusions
Other interesting conclusions include that IT departments are increasingly looking to automate non-technical workflows. This is to meet the growing demands of the business. Especially non-technical employees with certain roles are eager for automation. These include employees such as data scientists, product teams, business analysts, customer support, the finance department, marketing specialists, engineers and HR staff. In particular, they are looking at automating repetitive, manual tasks through RPA functionality. Just over a third of respondents are already investing in RPA technology.
Furthermore, reusable integrations of applications can provide more cost savings. Today, according to the survey, about 47 percent of all internal software assets and components can be reused. This in turn offers an opportunity for greater application efficiency, which was the main focus of the study.