Failing to complete digital transformation initiatives costs organizations an estimated $9.5 million annually

A third of organizations plan to invest in Robotic Process Automation (RPA) to drive efficient growth

Demand for automation surges across non-technical teams such as HR, marketing, and product

New data shows that business application volumes within organizations have increased nearly 10% in the past year, surpassing 1,000 on average. However, less than 30% are integrated, creating data silos that lead to rising costs, duplicated work, productivity bottlenecks, and disconnected experiences.

MuleSoft’s annual Connectivity Benchmark Report surveyed 1,050 CIOs and IT decision makers to better understand these challenges and what organizations can do to succeed amid economic uncertainty.

Integration challenges slowing digital transformation efforts  

Integration lies at the center of digital transformation and connected user experiences. However, 80% of respondents say integration challenges are slowing their efforts — leading to data silos and disconnected departments. 

• Application volume spikes: Organizations are using an average of 1,061 different applications, a 10% increase from 976 identified in the 2022 report. 

• Lack of integration is a rising challenge: Only 29% of these applications on average are currently integrated.
• Custom integration costs rise: Organizations spent on average $4.7 million on implementing custom integrations in the past 12 months, a 21% increase from $3.7 million reported last year. 
• Siloed apps and data causing headaches: Thirty-six percent of respondents say integrating siloed apps and data is their biggest digital transformation challenge. 

The good news? New technology is solving these problems and making integration easier. Some of the world’s biggest companies are using real-time data technologies to integrate, ingest, and store real-time data streams at massive scale, with built-in connectors that bring in data from every channel (mobile, web, APIs), legacy data through, and historical data from proprietary data lakes.

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API-led connectivity helps businesses integrate apps and data 

As organizations become more digital-first and cost-focused, the vast majority (99%) are using APIs to integrate apps and data to create exceptional customer experiences and generate revenue. 

• Empowering non-technical business users accelerates transformation: Sixty-eight percent of organizations that are ahead of planned digital transformation progress have a mature strategy to empower non-technical users to easily integrate applications and data sources using APIs, demonstrating that low-code tools can improve business agility. 

• APIs drive revenue as top-down API integration strategies increase: 38% of organizations’ revenue-generating digital assets, such as ecommerce capabilities and partner portals, utilize APIs, compared to 35% a year ago. Further, 75% of organizations now have a top-down API integration strategy.

With rising demands, IT looks to automation to support non-tech workflows 

IT teams that manage an organization’s tech operations are increasingly looking to automation for efficiency and organization-wide productivity solutions. RPA — which enables teams to automate business processes and tasks with bots — is one automation technology seeing rapid adoption across enterprises, with 33% percent of organizations investing in the technology. 

• Companies report broad automation, integration needs: Ninety-two percent of organizations said at least one department within their company requires both integration and automation.

• IT continues to ‘own’ automation amid digital disruption: Developers (72%), IT operations (65%), and application administrators (49%) are most likely to be responsible for automating business processes.

• Non-tech roles eager for automation: Data science (64%), product (62%), business analysts (61%), customer support (58%), finance (57%), marketing (56%), engineering (56%), and HR (52%) report a need for automation in their departments.

• Reusable integrations offer cost saving opportunities: On average, 47% of organizations’ internal software assets and components are available to developers for reuse, an opportunity for greater integration efficiency.

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Businesses have saved up to 109 billion hours every month using automation tools that enable employees to focus on higher value work. By taking a unified approach to integration, API management, and automation, businesses are able to drive efficiency, agility, and continuous innovation.

As digital transformation moves ahead, cost of failure rises

Despite an increase in IT project volume (41% growth year over year), most (69%) organizations are ahead of schedule on digital transformation progress due, in part, to infrastructure improvement. However, the cost of failure to complete projects has risen, adding risk to business’ bottom lines.

• IT teams narrow the delivery gap: Forty-eight percent of teams say they completed all of the IT projects asked of them last year, compared to 44% in 2022. In addition, late project delivery decreased from 52% to 30% year over year. This is potentially a result of businesses continuing to increase investment in IT teams, with an average of $11.7 million. 
• Infrastructure investments ease systems change: Just 54% of organizations now say it is difficult to make changes to a particular system or applications because of their IT infrastructure, down from 74% a year ago.
• Cost of failed digital transformation spikes: The average cost of failing to complete digital transformation initiatives now sits at $9.5 million annually, up significantly from last year’s estimate of $6.8 million.

“We’ve seen significant investment and dedication from businesses looking to digitally transform. Even amid uncertain economic conditions, digital transformation efforts are well underway, and even speeding up in some cases,” said Matt McLarty, CTO, MuleSoft. “However, integration efforts are lagging, and without this, businesses cannot realize the full value of their data and application capabilities.”

Integration tools and automation help close that gap, enabling productivity, efficiency, and innovation gains that will allow businesses to achieve innovation gains that will propel businesses forward.

More information:

• Download the full report here. 
• Empower teams with Salesforce Flow and MuleSoft RPA.
• Learn how MuleSoft powers Salesforce Genie Customer Data Cloud.  

Methodology

For the eighth annual Connectivity Benchmark Report, MuleSoft, in partnership with Vanson Bourne, surveyed 1,050 IT leaders from global enterprises. The goal was to uncover how much value businesses actually gain from digital transformation, and to understand IT leaders’ most successful strategies for achieving digital transformation goals. The online survey was conducted between October 2022 and November 2022 across the United States, the United Kingdom, France, Germany, the Netherlands, Australia, Singapore, Hong Kong, and Japan. Only suitable candidates participated in the survey and were verified by using a rigorous multi-level screening process. All respondents work at an enterprise organization in the public or private sector with at least 1,000 employees and hold a managerial position or above in an IT department.

*Survey respondents stated on average they spent $11,666,820 on IT staff (both on employee salaries and external contractors) over the last 12 months.

Cumulatively survey respondents stated on average their IT teams were spending 40.31% of their time designing, building, and testing custom integrations.

2023: $11,666,820 x 40.31% = $4,702,895