Australian businesses could potentially lose an average of AU$6.5m if they don't follow through with digital transformation initiatives.
In a new report published by MuleSoft, the software company reported 70% of a given organisation's customer interactions are now digital.
In contrast, 67% of Australian businesses struggle to provide completely connected user experiences across all channels, creating immense pressure to stay afloat.
The 2022 Connectivity Benchmark Report combines insights from 100 CIOs and IT decision-makers across Australia, as well as surveying CIOs from the US, UK, France, Germany, the Netherlands, Singapore, Hong Kong, and Japan.
The report is designed to call attention to the obstacles and opportunities for companies as they look to the imminent adapt-or-die digital future.
According to the report, more than a third of Australian business leaders now request a company-wide API strategy to unlock data and foster connected experiences.
MuleSoft CEO Brent Hayward says providing connected digital experiences for customers and staff is an expectation and a requirement for growth in the current competitive landscape.
Hayward adds that siloed applications and data are holding back customer experience and digital transformation resulting in an annual revenue decline in the millions for businesses.
“Companies need to be able to easily integrate a growing number of apps and data sources to automate their business, create seamless digital experiences, and drive growth,” Hayward says.
The report notes that applications are the most integral component of digital transformation and enhancing user experiences.
Last year companies were using 884 individual applications; this year, the figure sits at 974.
However, the report indicates a significant opportunity to improve connected user experiences, in that, on average, only 28% of the applications used are integrated.
Some of the key findings found by the 2022 Connectivity Benchmark Report are:
- Increasing difficulty in creating connected user experiences: 44% of businesses said they find it difficult to integrate user experiences in the last report. That number has risen to 55% this year, demonstrating the complicated nature of the task for many organisations. Moreover, 96% of respondents say integration challenges are slowing down digital transformation initiatives the most.
- Lacking internal knowledge: 56% of the CIOs surveyed cite a lack of internal knowledge as the most difficult component in integrating user experiences. In comparison, 55% say outdated infrastructure and 53% say an inability to keep up with ever-changing processes, tools, and systems is the most difficult.
- Positive company benefits come from integrated user experiences: Of those with integrated user experiences, 57% of companies say doing so has improved visibility into operations and innovation. Additionally, 54% say better ROI and increased automation adoption, and 52% say they saw growth in customer engagement.
- Digital experiences and initiatives are held back by integration issues: 97% of organisations cite data silos as a severe hindrance to creating integrated user experiences, an increase of 3% since the last report.
- Integrating siloed apps and data is also tricky, with 44% saying this is the biggest challenge. Risk management and compliance follows at 43%.
- Custom integration is creating more money worries than it's solving: In attempting to integrate apps and data, many organisations are focusing resources in the wrong areas. Custom integration labour is proving to be especially expensive, with businesses spending AU$3.56 on it in the last 12 months.
- Increasing demand has led to rising costs: 89% of companies say IT budgets have grown year-on-year, compared to 78% in the previous year. However, the quantity of work expected from IT has also increased, from 33% to 42%. But in most cases, 57% of projects were not delivered on time over the last year due to IT struggling to meet demand, even with an increased budget.
However, all the companies surveyed use application programming interfaces (APIs) despite integration challenges.
As a result, the report concludes 92% of businesses have a straightforward integration and API strategy.
Additionally, 34% say company leaders expect all projects to conform to company-wide API integration strategies, an increase of 10% on last year.
52% of businesses say IT is also actively utilising reusable IT assets and APIs for more efficient workflows, with 46% of internal software assets and components available for developers to reuse, up 4% since the last report.
As part of progressing their move to digital, businesses are also assisting non-technical employees in using low-code tools to manage their own automation and digital transformation projects, giving much-needed relief to IT teams.
This has resulted in 57% of businesses (up from 33% last year) having a very mature or mature strategy to give these employees confidence in integrating apps and data sources powered by APIs.
Furthermore, 25% of companies said increasing incorporation of APIs into their workflow had caused revenue growth last year, a figure that has risen to 46% in the latest report.
“Digital agility is essential to successful transformation, allowing organisations to drive innovation at scale, deliver new initiatives faster, and create the experiences that customers want,” Deloitte managing director and API transformation leader Kurt Anderson says.
Anderson adds that the combination of integration, API management, and automation represents the most up-to-date strategy and is key to moving companies forward digitally.
“It enables organisations to easily connect and integrate their data, applications, and devices to create new digital capabilities and drive transformation projects,” Anderson says.