How data and application integration can power a post-pandemic recovery

Profile picture for user ifairclough By Ian Fairclough May 13, 2021 Audio mode
Summary:
API-led connectivity could be a crucial enabler of business recovery post-COVID, says MuleSoft's Ian Fairclough.

Concept of system API centric integration of two partners © alphaspirit.it - Shutterstock

In a lot of ways, 2020 was the year when the world really went digital. Consumers who had never shopped, streamed video, or booked a doctor’s appointment online before began to discover new ways of doing things. Organizations under tremendous pressure to steady the ship and meet growing customer expectations looked to roll-out seamless digital experiences faster. Yet the truth is that data silos continue to restrict their ability to deliver on these initiatives and bounce back, as we begin to emerge from the crisis. The key going forward will be to adopt API-led integration approaches where business users can self-serve to integrate apps and data sources.

IT under pressure

MuleSoft’s sixth annual Connectivity Benchmark Report reveals a world in which IT departments are struggling to balance business innovation with their day-to-day responsibilities. “Keeping the lights on” continued to occupy the vast majority (68%) of IT’s time in 2020, virtually the same as it did the year before. A large part of this could be due to requirements to support remote working initiatives. However, the need for innovation was never greater than it was in 2020, as organizations were forced to find digital solutions to address the immediate challenges of the pandemic. The bottom line is that organizations’ ability to innovate is suffering — only 37% of IT teams were able to complete all the projects asked of them, compared to 41% the previous year. Much of this can be attributed to the constraints of a disconnected technology landscape: while IT leaders understood the importance of accelerating innovation, integration challenges stood in their way.

This means more work is needed on connecting key systems, applications, and data. Unfortunately, too much of this is being done with expensive, custom code integrations, costing large enterprises around $3.5 million on average each year for the IT labour needed to manage such projects. Despite that investment, less than a third of apps are currently integrated in most organizations. With the average company running over 800 applications, this could have a huge impact on their ability to deliver compelling customer experiences. In turn, this is putting more pressure than ever on IT functions to transform.

Legacy roadblocks

The report reveals data silos (90%) and existing IT infrastructure (60%) create the biggest roadblocks for organizations as they try to integrate new technologies and make changes to IT systems and applications. Legacy IT in particular was called-out for making systems overly dependent on one another and difficult to update.

As a result, just 18% of respondents said they’re able to fully integrate end-user experiences — dropping even further for financial services, insurance, and public sector organizations. Custom point-to-point integrations are a notable challenge associated with legacy IT. Yet those who can chart a way through these challenges and digitally transform have seen major improvements in customer engagement, innovation, and the speed of project delivery.

APIs for the future

The good news is that API use continues to grow among enterprises— up from 80% in 2019 to 96% last year. More and more, organizations are using APIs to increase efficiency and drive new integrations and development processes. APIs have already helped to drive increased productivity, self-service, and innovation, as well as generate revenue.

However, it’s also worth noting that API reuse has stagnated over the past two years — so that only around 42% of software assets and components were reusable in 2020. This matters, because the reuse of code, APIs, and best practice templates can help to take the heat off stretched IT teams and enable business users to drive innovation directly. We found that over a third (36%) of organizations now have a mature approach to API-led integration featuring self-service tools for business users.

One organization that has embraced this API-led approach is AXA Luxembourg, which needed to move faster as a business and better serve its policyholders.  To do this the company needed to better leverage its data – which required connecting different homemade on-premises systems with external applications in the cloud.  With custom coded integrations, it was costly and slow to connect systems, apps, and data. AXA Luxembourg developed six APIs that connected data across multiple systems, including its Document Management API, Insurance Backend API, and Customer API. The team built these API-led integrations in just 12 weeks, compared to the 18 weeks it would have taken with a custom code approach. By embracing reusable assets, AXA Luxembourg can now deliver integrations 30% faster than before. This means that teams spend 25% less time doing manual work and instead can dedicate more time to innovation.

Time to empower end users

IT leaders can start their own API-led transformation by empowering business users with easy-to-use integration tools, to drive self-service, productivity, and faster time-to-market. Reusable APIs should be preferred over custom point-to-point integrations to save valuable IT time and resources and speed time-to-value. At the same time, IT has a role to play in monitoring API usage and performance, and ensuring any projects have security baked-in from the start — especially as APIs become a focus for attackers.

With nine out of ten organizations claiming data silos remain a challenge, there’s still some way to go. But it’s clear that the old ways of doing things will no longer work in a post-pandemic world. For organizations to not only survive but thrive over the coming years, they’ll need to find a way to retain those digital novices who were forced online by the pandemic, alongside their early adopters. As customer expectations rise, so will the pressure on IT to reform, and transform, through API-led connectivity.