IT Delivery Gap Slows Digital Transformation
March 24, 2017

Pete Goldin
APMdigest

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A growing IT delivery gap is slowing down the majority of the businesses surveyed and directly putting revenue at risk, according to MuleSoft's 2017 Connectivity Benchmark Report on digital transformation initiatives and the business impact of APIs.

With a convergence of technologies — including mobile, SaaS, cloud, big data and IoT — pushing business users to move at much faster speeds, IT must be able to embrace change and securely integrate new technologies at a rapid pace. However, with a relatively fixed set of resources and a constrained capacity to deliver on new projects, IT is falling increasingly behind and holding back the business.

To counter the resulting IT delivery gap and address connectivity challenges, IT is increasingly turning to APIs to integrate new technologies with existing systems, enable business users to self-serve IT and unlock data silos. APIs serve as the digital glue that allow applications to securely talk to each other and exchange data, regardless of format or source.

The IT Delivery Gap is Widening

Despite the high number of IT decision makers (ITDMs) that are undertaking or plan to undertake digital transformation initiatives (94 percent), only half said they were able to deliver all projects asked of them last year. The biggest factors responsible for slowing down IT’s delivery include a growing misalignment with business teams, under-resourcing, time constraints and the sheer number of applications they need to integrate.

According to the report:

■ 69 percent of ITDMs say there is a disparity between what business executives are expecting will be achieved from a digital initiative.

■ The disparity between IT and the business is growing year-over-year, with 45 percent of ITDMs in 2016 saying it was responsible for slowing the business down.

■ 51 percent of ITDMs say they are under-resourced, and most ITDMs will not get significantly more resources in 2017: 68 percent say they will see a budget increase of less than 10 percent, will see their budgets stay the same or will see their budgets decrease.

■ Under-resourcing is a major problem for IT, with only 32 percent of ITDMs in 2016 indicating it was responsible for slowing the business down.

■ 41 percent of ITDMs say a major obstacle to completing digital transformation initiatives is lack of time.

■ 35 percent of ITDMs say they are integrating 100 or more applications this year, compared to 10 percent in 2016, pointing to the growing complexity involved for IT when integrating new applications, data sources and devices.

The Benefits of APIs

To close the IT delivery gap and speed up the pace of innovation, a growing number of ITDMs are implementing APIs to integrate new software with existing systems and applications (60 percent), to increase speed (57 percent), and to unlock existing data silos (54 percent). Almost universally, ITDMs are already seeing positive business outcomes from implementing API strategies.

According to the report:

■ 90 percent of ITDMs currently have or are launching an API strategy by the end of 2017.

■ Of the ITDMs that currently have an API strategy, 94 percent credit it with allowing them to deliver products and services faster.

■ The top business benefits ITDMs realized from their API strategies are increased productivity (64 percent), increased innovation (62 percent), increased employee engagement and collaboration (47 percent) and revenue growth as a direct result (44 percent).

■ Nearly half of ITDMs say their companies generate approximately 1-10 million dollars from APIs.

■ 40 percent of ITDMs say their companies generate 25-75 percent of their revenue from APIs.

■ 19 percent of ITDMs say that a majority of their company’s total revenue is generated through APIs and activities directly related to API implementation.

Shadow IT Poses Security Risks

The IT delivery gap is causing many business users to take matters into their own hands by purchasing technology tools outside of IT — often SaaS applications. This shadow IT puts mission-critical customer and product data at risk. Despite over half of ITDMs saying they are “extremely” or “very” confident they can prevent or withstand security threats, the emergence of shadow IT and the continued movement to the cloud is set to pose unforeseen threats for businesses.

According to the report:

■ More than half of ITDMs say their companies have adopted more than 20 applications outside of the IT department.

■ Nearly half of ITDMs say more than 21 percent of the tech budget comes from outside IT.

■ 79 percent of ITDMs say cloud computing, the highest ranked technology, is “very” or “extremely” important to the future of their businesses.

■ 75 percent of ITDMs say cloud applications are “very” or “extremely” important IT priorities in 2017.

■ ITDMs say they are spending more money on cloud applications (nearly 14 percent) than security (just over 12 percent).

“The IT delivery gap is one of the biggest threats to businesses today, as speed and real-time access now helps determine a business’ success,” said Ross Mason, Founder and VP of Product Strategy, MuleSoft. “In order to deliver products faster to market, establish new global presences and change existing processes to meet market demands, we’re seeing our customers increasingly invest in and benefit from an API-led approach to connectivity. Driving an internal API economy allows IT to securely open up legacy systems and free business-critical data that the wider organization relies on to achieve business outcomes faster than competition. By removing itself as a bottleneck and creating reusable assets with APIs, IT can empower the entire organization in a secure environment while greatly diminishing the daunting IT delivery gap.”

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