There’s a lot riding on the shoulders of IT leaders today. Bill Allison of Deloitte Consulting notes that not only do CIOs have to “harmoniz[e] business tactics with sound technical strategy,” but also “change the perception that technical systems are ‘just plumbing’ to deliver true value and opportunity to the business” AND “focus on reducing costs, mitigating risk, and providing a ‘how’ to the ever-growing list of ‘what’s’ requested by their counterparts in the C-suite.” That’s a huge list of requests, and it’s clear that IT leaders are feeling the pressure.
MuleSoft released the Connectivity Benchmark Report, their annual survey of global IT leaders, and it reveals what’s at stake if IT leaders don’t get the job done on Digital Transformation. Four out of five IT leaders (81%) say that they will lose revenue in as little as 12 months if digital transformation isn’t completed. But the deck is stacked against them because of a mismatch between resources and workloads; most IT leaders say their budgets are either staying the same or growing by less than 10 percent, but their workloads are increasing, on average, by 27%. This creates an IT delivery gap that stretches IT resources ever thinner; in fact, two-thirds of IT leaders say they weren’t able to complete all their assigned projects last year. Growing workloads, decreasing resources, and uncompleted projects can be a recipe for frustration, and given the importance of incorporating new technologies into the enterprise, the situation is becoming critical.
Integration is a major source of IT headaches
One of the biggest drains on IT time, money, and resources is integration. A huge majority of IT leaders (89%) said that integration challenges are slowing down their efforts at getting digital transformation done. In fact, IT leaders said, tightly coupled, point-to-point integration projects were responsible for the “biggest headaches they had ever seen.” This reaction isn’t surprising; the rapid enterprise adoption of technologies like SaaS, mobile, and IoT has led to an explosion of applications that companies are using. IT leaders estimate that on average there are 1,020 applications in use in their companies, and only 29% are actually connected together.
The huge number of applications and the difficulties in integrating them all are leading to inefficient work and a drain on IT’s scarce resources. According to Gartner, “Worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 4.5 percent from 2017.”* Based on the Connectivity Benchmark Report results, organizations are spending nearly a quarter (22 percent) of their annual IT budgets on integration, which could equate to over $800 billion spent on integration in 2018. This dwarfs the amount spent, say, on data systems ($178 billion). Not surprisingly, given these results, IT leaders say they spend the majority of their time (63%) on maintaining legacy systems rather than creating innovative projects for their organizations, and the vast majority (93%) admit their application development process could be more efficient. All of this paints a rather grim picture for the IT leader; underwater, behind on projects, and catching up is made difficult by the need to maintain integration projects and legacy systems.
The way out: APIs
Is there a light at the end of the tunnel? IT leaders have identified that using APIs might be the answer. A large majority (93%) noted that in order to achieve their digital transformation goals and deliver more innovation to their organizations they need to enable self-service IT, where the wider business can do more on its own without relying on central IT for each project. And APIs are the key to doing this. By making IT assets discoverable and reusable via APIs, organizations can enable self-service, federating IT projects, increasing agility, and removing some of the workload from the central IT organization.
And API adoption seems to be having the desired effect; over half (58%) of IT leaders who said their organizations own APIs have been able to leverage them to increase productivity. By using APIs, organizations have been able to increase employee engagement and collaboration (43%), meet line-of-business demands quicker (35%), increase IT self service (35%) and decrease operational costs (34%).
Marshall Van Alstyne, MIT digital fellow and Boston University professor, commented: “As the digital economy continues to grow, more organizations are starting to realize the benefits of an API strategy and the financial benefits it can bring. MuleSoft’s Connectivity Benchmark Report corroborates our own findings that there is a positive relationship between the intensity of API usage and financial performance.”
Do these results sound familiar to you? Are you facing headaches from integration, or experiencing success with your API program? Take a look at the report and benchmark your company’s performance against the survey respondents.