A tale of two countries - the state of digital transformation in the US vs. the UK

Profile picture for user ifairclough By Ian Fairclough February 13, 2020
Summary:
API-led connectivity can build out application networks based on reuse to drive faster innovation and sustainable growth, says Mulesoft's Ian Fairclough.

transformation

Digital transformation has been the subject of much scrutiny over the past few years, but is reality finally catching up to the hype? Our Connectivity Benchmark Report 2020 recently showed that nearly every organization in the US and UK is currently planning digital transformation initiatives over the coming year, but there are clear differences in the maturity of these efforts on both sides of the Atlantic.

From Boston to Birmingham and New York to Newcastle, transformational initiatives are hamstrung by cultural challenges and the difficulty of integrating legacy IT and organisational silos. While US firms appear overall more advanced in their approach than their UK counterparts, there are several common failings in both countries. Application integration rates stand at just 31% in the US and are even lower - 26% - in the UK; preventing the true power of digital capabilities from being unlocked to fuel innovation and growth across the business.

The need for integration

The catch-all term of ‘digital transformation’ in reality hides a vast industry ranging from AI and big data to IoT and social media. It’s also mission-critical; 73% of global organizations fear their revenues will be hit in the next 12 months if their digital transformation projects fail. Applications play a vital role in such projects, enabling organizations to serve up differentiated customer experiences and drive operational efficiencies. But their value is diminished by running in silos; more than half (52%) of US firms and over four-fifths (83%) of their UK counterparts said integration challenges hinder their digital transformation.

Organizations therefore need to find a way to bring together applications, data and devices in a seamless way, irrespective of whether they’re legacy or cutting-edge. Only with this optimized integration can businesses gain the data-driven insight and unlock the new revenue channels that are at the heart of their digital transformation strategies. The best way to do this is via reusable APIs. But while the majority of global organizations understand the power of APIs, few are doing so strategically in an efficient, cost-effective manner.

IT is key to both the problem and the solution. Increasingly, centralised departments are struggling to keep up with the demands placed on them by the business. As well as the constant challenge of keeping the lights on, IT teams are expected to be agile innovators, capable of supporting business requirements by developing new apps to react quickly to changing market demands. While the number of new transformation projects continues to rise on both sides of the Atlantic, IT teams are increasingly struggling to keep up with the demand. Only 57% of US-based IT organizations were able to deliver on all their projects last year, falling to less than a quarter (23%) in the UK.

The beauty of APIs

When implemented effectively, reusable APIs can take much of the strain of transformation away from central IT, by unlocking data and digital capabilities and empowering line of business users to become ‘citizen integrators and create their own solutions. In particular, UK IT teams expect to see a growing number of business users from customer support, finance, data science and HR departments who stand to benefit from being able to self-serve their own integration needs.

Over half (52%) of global organizations say that IT has generated the most business value by building reusable integration assets that save time and money on future projects. However, there’s still much work to do. Just 44% of U.S. and 30% of UK organizations are currently using APIs to increase the efficiency of development processes, and most say they don’t have an effective way to share APIs.

The problem for many lies with a failure to implement an organisation-wide API strategy. Businesses often struggle to drive API-led connectivity because they don’t have a dedicated team to oversee integration work. Non-technical business users are also often left without crucial resources, and efforts therefore remain piecemeal and siloed.

Getting it right

To overcome these challenges, organisations need to design APIs for reuse from the very start, and expose them to third-party partners and citizen developer ecosystems via an application network, to maximise business value. Those that do can benefit not just from customer engagement and growth but increased productivity and greater agility via self-serve IT.

Two very different organisations doing great work in this area are Airbus and Atom Bank. The aircraft giant is executing its application network strategy by prioritising faster, easier access to data across the organisation, through API-enabled reuse. Projects range from connecting SharePoint to artificial intelligence systems, integrating bots and social media for an employee collaboration platform, and exposing legacy SAP apps to a mobile front-end.

Atom Bank is the first mobile-only bank in the UK. With no branches and not even a website, there’s tremendous pressure on its mobile application developers to ensure customers are getting the best possible experience. Previously its IT team focused on tightly coupled point-to-point integrations to connected disparate systems, but this acted as a block on innovation. By instead focusing on reuse enabled by an application network, the digital-native bank has been able to reduce the number of APIs it needs by half, while shortening the development cycle from one month to just a day — driving innovation and agility at speed.

Room to grow

From looking at the findings of the Connectivity Benchmark Report 2020, it seems that US firms are further ahead than their UK counterparts in the maturity of their digital transformation strategies. However, change is the only constant in the world of enterprise IT, so there’s no room for complacency. The good news is that API-led connectivity offers a real opportunity to build out application networks based on reuse, in order to drive faster innovation and sustainable growth for the long-term future.