Leaders today want more out of IT and have increased their IT investment to $11.7 million on average, this according to MuleSoft’s 8th annual Connectivity Benchmark Report produced from interviews with 1,050 IT leaders, which are defined as those who hold a managerial position or above in an IT department, across the globe. All respondents work at an enterprise organization in the public or private sector with at least 1,000 employees.
Prior research from MuleSoft revealed seven digital transformation trends for 2023, including deeper investments in IT automation and greater adoption of low-code and no-code solutions to scale productivity and output.
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Here’s the executive summary of the 2023 MuleSoft Connectivity Benchmark Report:
- IT Delivers More as Leaders Invest in Efficiency – Leaders today want more out of IT and have increased their IT investment to $11.7 million on average. IT is better able to meet business demands as more teams successfully completed all projects asked of them last year.
- The Cost of Failing to Digitally Transform is Higher Than Ever – While most organizations are ahead of progress, the stakes for digital transformation have never been higher. The average organization could lose $9.5 million should they fail to complete their transformation initiatives.
- Integration Challenges Remain as App Volume Surges – Integration challenges block digital transformation as enterprises add even more applications to their ecosystem (1,061 on average vs. 976 in 2022). Those that turn to custom integration labor to solve these issues pay a high price ($4.7 million per year)
- Customers Now Expect Connected Experiences – More than a third (36%) of organizations provide a completely connected user experience across all channels, an increase from 30% in 2022. However integrating user experiences remains a challenge for many organizations.
- Teams Across the Business Demand Automation – Automation adoption is on the rise. Most IT organizations centrally manage (67%) and track (59%) automation work, but as more non-IT roles request automation organizations are turning to no-code tools and approaches to meet demand.
- APIs Help Maximize Cost Saving and Revenue – APIs are the key to digital transformation. They streamline development and generate 38% of the average organizations’ revenue. Of enterprises ahead of their anticipated digital transformation progress, 93% have a clear API integration strategy.
Here are 25 key takeaways of responses from 1,050 IT leaders of enterprise organizations:
Leaders are investing in efficiency
- IT infrastructure is becoming more streamlined. Half say it’s difficult to make changes (54%) or introduce new technology (54%), compared to 74% and 70% last year respectively.
- IT teams are able to deliver more projects on time. Nearly half (48%) say they completed every project asked of them, up from 44% the prior year. There was also a decrease in the average number of projects that were delivered late — 30% this year vs. 52% last year.
- Organizations spent an average of $11.7 million on IT staff in the past 12 months. Most (78%) say IT budgets will continue to increase over the coming year.
- IT project volumes continue to rise. With this increased investment, business leaders are expecting more from their IT teams. As a result, the number of projects IT was asked to deliver has increased 41% year-over-year, roughly the same increase as the previous year (40%).
The cost of failing to digitally transform is higher than ever
- With the customer experience being a critical indicator of organizational success, nearly three-quarters (72%) of customer interactions are now digital.
- Most (69%) organizations say they’re ahead of anticipated digital transformation progress. Only 10% report being behind where they expected to be.
- The cost of failure has increased significantly. Organizations could lose $9.5 million on average if they fail to complete digital transformation initiatives, compared to $6.8 million in 2022.
- Despite this progress, IT teams continue to face a number of technology and process challenges that get in the way of their digital transformation. Integrating siloed apps and data (36%), lack of skills and experience (36%), risk and compliance (36%), hiring/retaining talent (34%), and legacy infrastructure (34%) all sit at the top of the list.
Integration challenges remain as app volume surges
- Application growth continues with organizations using an average of 1,061 different applications. Just 29% of these applications are integrated.
- Organizations spent an average of $4.7 million on custom integration labor in the past 12 months, up from $3.6 million in 2022.
- Integration hinders digital transformation for 80% of organizations. This figure rises to 90% for organizations behind on their anticipated digital transformation progress.
- There are a number of different data integration challenges facing organizations today. These include incorporating data-derived insights into user-facing applications (77%), moving data from source systems into the data warehouse (75%), and reusing data sources across different user-facing applications (72%).
Customers now expect connected experiences
- Over half (54%) of organizations find it hard to integrate end-user experiences. This figure is even higher among organizations that are behind their anticipated digital transformation progress (74%).
- Businesses are working to improve customer engagement and satisfaction. More than a third (36%) say they provide a completely connected user experience across all channels — up from 30% in 2022.
- Integrated user experiences increase customer engagement (56%), provide better visibility into operations (53%), and help innovation (51%).
- While the benefits of integrated user experiences are promising, many organizations struggle to deliver them. Over half (54%) of IT development managers say it’s difficult to integrate end-user experiences. This increases to 74% among organizations that are currently behind their anticipated digital transformation progress. The most common challenges are outdated IT infrastructure (41%), security and governance (40%), lack of automation (40%), and existing custom-coded, point-to-point integrations (38%).
Teams across business demand automation
- More organizations are automating their way to efficient growth. As a result, RPA adoption is increasing across the enterprise — 33% of organizations plan to invest in RPA, up from 13% two years ago.
- As automation becomes a key component of transformation, IT is responsible for centrally managing (67%) and tracking (59%) automations.
- A number of roles outside of IT need automation tools to complete their work, including data science (64%), product (62%), and business analysis (61%) teams.
- Automation is an aspect of digital transformation that is closely controlled by IT. Developers (72%), IT operations (65%), and app administrators (49%) are most often responsible for automating business processes. In most organizations, automations are also managed (67%) and tracked (59%) centrally by IT.
- Non IT roles want automation. IT may manage the automation, but many non-tech roles require these capabilities in their parts of the business. These include data science (64%), product (62%), finance (56%), marketing (58%), business analysts (61%), customer support (58%), engineering (57%), and HR (52%).
- Overall, 92% of organization say at least one of the departments listed require both integration and automation.
APIs help maximize cost saving and revenue
- Nearly all (99%) organizations use public/ private APIs. Most commonly they’re used to develop processes for new projects (53%) and for integrations (53%).
- Over half (56%) of organizations say they have a mature API strategy that enables non-technical business users to easily integrate apps/data sources.
- APIs support self-service IT capabilities in 52% of organizations (up from 35% in 2018), showing that APIs can save organizations money and boost efficiency.
Growing businesses value and invest in building strong IT delivery capabilities. As businesses look to compete efficiently in a digit-first and more decentralized knowledge sharing economy, we will see increased investments in IT.
Digital transformation starts and begins with people in mind. All stakeholders — employees, customers, partners, and communities that we serve — expect more connected, intelligent, and personalized engagement experiences with companies that they chose to do business with. These connected experiences mean that businesses must deliver value at the speed of need. In order to reduce time to value, IT teams must partner with all lines-of-business, in order maximize cost savings and revenue opportunities. To achieve this, IT teams must rely on APIs and application integration strategies that eliminate data silos and increase automation across all their internal and customers facing processes.
To learn more about the MuleSoft Connectivity Benchmark Report 2023, you can visit here.