The MuleSoft 2022 Connectivity Benchmark Report shows this comes at a time when 70% of organisations’ customer interactions are now digital. Yet as digitalisation booms, organisations could lose an average $6.5 million in revenue if they fail to implement digital transformation initiatives.

The study recommends that companies need to deliver connected digital experiences for both customers and employees.

“In this all-digital world, customers and employees expect truly connected experiences,” says MuleSoft CEO Brent Hayward.

“However, siloed applications and data continue to hinder customer experience and digital transformation — and it is now costing businesses millions of dollars per year. 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.”

Based on a survey of 100 CIOs and IT decision makers in Australia, the 2022 Connectivity Benchmark Report highlights the challenges and opportunities for organisations as they look to unlock their data to create and automate experiences:

Customers expect seamless user experiences
Applications lie at the centre of digital transformation and efforts to enhance the user experience. On average, organisations are using 974 individual applications (compared to 884 a year ago). Yet only 28% of these applications are integrated on average, indicating there is still an enormous opportunity to improve connected user experiences. MuleSoft’s report indicates that:

Creating connected user experiences has become increasingly difficult: More than half (55%) of organisations said they find it difficult to integrate user experiences. This is up from 44% a year ago, showing there is increasing complexity for companies to meet their customers' digital needs.

Lack of internal knowledge is a hurdle: A lack of internal knowledge (56%) was cited as the biggest challenge to integrating user experiences, ahead of outdated IT infrastructure (55%) and an inability to keep up with ever-changing processes, tools, and systems (53%).

Integrating user experience delivers business benefits: Of the organisations that have integrated user experiences, more than half said it had enhanced visibility into operations (57%) and innovation (57%). Other benefits realised included improved return on investment (54%), increased automation adoption (54%), and increased customer engagement (52%).

Integration challenges hinder digital experiences and initiatives
Data silos hinders creating integrated user experiences as organisations citing silos as a challenge (97%) increased from a year ago (94%). The report shows:

Integration headaches: The biggest challenges to digital transformation are integrating siloed apps and data (44%) and risk management and compliance (43%). Ninety-six percent of respondents said integration challenges continue to slow digital transformation initiatives.

Too much is being spent on custom integration: In their efforts to integrate apps and data from across the enterprise, organisations appear to be focusing more resources in the wrong areas, such as custom integration. As a result, they continue to incur technical debt. On average, organisations spent $3.56 million on custom integration labour in the last 12 months

IT budgets are up, but so is demand: Eighty-nine percent of organisations said IT budgets have increased year-on-year (compared to 78% last year). At the same time, the number of projects IT is asked to deliver increased by 42% on average, a big jump from 33% a year ago. Despite the extra budget, IT is finding it difficult to meet the demands of the business. On average, more than half (57%) of projects weren’t delivered on time over the past 12 months.

Organisations turn to APIs to drive digital transformation and revenue
Despite these integration challenges, all the organisations surveyed use APIs. By using APIs to connect data and applications, organisations can digitally transform in a more sustainable manner and accelerate business success. The report indicates:

A top-down integration and API strategy: Most (92%) organisations now have a clear integration and API strategy. Over a third (34%) said leaders now demand that all projects abide by a company-wide API integration strategy, up from just 10% a year ago.

Reuse is on the rise: Organisations are increasingly creating and using reusable IT assets and APIs to create new experiences and accelerate projects, rather than building from scratch each time. On average, 46% of organisations’ internal software assets and components are available for developers to reuse — an increase from 42% a year ago. More than half (53%) of organisations said IT is actively reusing these components.

Empowerment of business users: Enabling non-technical users to harness low-code tools to drive their own automation and digital transformation projects can take huge pressure off IT teams. More than half (57%) of organisations now have a ‘very mature’ or ‘mature’ strategy to empower these users to integrate apps and data sources powered by APIs (compared to 33% last year).

APIs drive revenue: Forty-six percent of organisations said they have experienced revenue growth as a direct result of leveraging APIs (compared to 25% a year ago).

“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,” says Deloitte Consulting managing director and API transformation leader Kurt Anderson.

“A modern strategy that combines integration, API management, and automation is central to achieving digital agility. It enables organisations to easily connect and integrate their data, applications, and devices to create new digital capabilities and drive transformation projects.”

The 2022 Connectivity Benchmark Report was conducted in collaboration with Deloitte Digital.