APAC IT leaders predict more than US$6m in lost revenue if digital transformation initiatives fail: MuleSoft study

APAC organizations are under increased pressure to transform as more than 70% of their customer interactions are now digital

However, the vast majority (92%) of IT decision makers say integration challenges are hindering  their digital transformation efforts, the failure of which could cost them more than US$6 million.

A company-wide API strategy can help organizations overcome integration challenges. APAC  organizations report that 38% of their revenue is currently generated from APIs and API-related  implementations, signaling a lot more room for growth.  

MuleSoft, provider of the world’s #1 integration and API platform, today  unveiled the Asia Pacific edition of its 2022 Connectivity Benchmark Report, which highlights persistent  challenges that IT teams continue to grapple with in the face of rapid digital transformation.  

According to the report, more than 70% of customer interactions in APAC are now digital. However, only  30% of IT decision makers in the region say they have managed to provide a fully integrated end-user  experience across various channels and touchpoints.  

As digitalization accelerates, APAC organizations could lose on average more than US$6 million in lost  revenue if they fail to successfully complete digital transformation initiatives, according to the IT decision  makers (ITDMs) polled. 

“In this all-digital world, customers and employees expect truly connected experiences,” said Brian Kealey,  Area Vice President, Asia at MuleSoft. “However, siloed applications and data continue to hinder customer  experience and digital transformation — and it is now costing businesses millions of dollars per year. This  issue is particularly important in Asia Pacific, where organizations report that they use more applications  than any other region surveyed. To continue driving growth in the post-pandemic digital economy,  companies need to be able to easily integrate a growing number of apps and data sources to automate  their business and create seamless digital experiences for their customers.” 

Based on a survey of 400 CIOs and IT decision makers in Singapore, Hong Kong, Australia, and Japan, the  APAC edition of MuleSoft’s 2022 Connectivity Benchmark Report highlights the challenges and  opportunities for organizations as they look to unlock their data to create and automate seamless  experiences.  

Customers expect seamless user experiences 

Applications lie at the center of digital transformation and efforts to enhance the user experience. On  average, APAC organizations are using 1,020 individual applications such as marketing, finance, and cloud  – higher than the US and Europe regions. 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 (54%) of  APAC organizations said they find it difficult to integrate user experiences, highlighting the  complexity for companies to meet their customers’ digital needs. 

Overcoming security and governance challenges is a hurdle: Security and governance (50%) was  cited as the biggest challenge to integrating user experiences, ahead of an inability to keep up  with ever-changing processes, tools, and systems (48%) and lack of internal knowledge (47%). 

Integrating user experience delivers business benefits: Of the APAC organizations that have  integrated user experiences, more than half said it had increased customer engagement (55%).  Other benefits realized included greater ROI (54%), improved innovation (53%), and better  visibility into operations (52%). 

Integration challenges hinder digital experiences and initiatives 

Data silos remain a significant barrier to creating integrated user experiences, with the number of APAC  organizations citing such silos as a challenge (94%). The report shows: 

Integration headaches: The biggest challenges to digital transformation are integrating siloed  apps and data (48%), business and IT misalignment (41%) and risk management, compliance  and/or legal implications (40%). 92% of respondents in APAC said such 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, APAC organizations appear to be focusing more resources in the wrong  areas, such as custom integration. As a result, they are increasing their technical debt. On average,  organizations spent US$3.69 million* on custom integration labor in the last 12 months – or 39%  of their total IT labor resources. 

IT budgets are up, but demand is up: 84% of APAC organizations said IT budgets have increased  year-on-year. At the same time, the number of projects IT is asked to deliver increased by 42% on  average. Despite the extra budget, IT is finding it difficult to meet the demands of the business.  On average, close to half (45%) of projects weren’t delivered on time over the past 12 months. 

Organizations turn to APIs to drive digital transformation and revenue 

Despite these integration challenges, the vast majority (99%) of APAC organizations use APIs. By using  APIs to connect data and applications, organizations can digitally transform in a more sustainable manner  and accelerate business success. The report indicates: 

A top down integration and API strategy: Most (93%) APAC organizations now have a clear  integration and API strategy. Additionally, a quarter (25%) said leaders now mandate that all  projects abide by a company-wide API integration strategy. 

Reuse is on the rise: Organizations 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, 48% of APAC organizations’ internal software assets and components are available  for developers to reuse. 

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.  52% of APAC organizations now have a ‘very mature’ or ‘mature’ strategy to empower these users  to integrate apps and data sources powered by APIs. 

APIs drive revenue: 38% of APAC organizations said they have experienced revenue growth as a  direct result of leveraging APIs. 

“Digital agility is essential to successful transformation, allowing organizations to drive innovation at scale,  deliver new initiatives faster, and create the experiences that customers want,” said Kurt Anderson,  managing director and API transformation leader, Deloitte Consulting LLP. “A modern strategy that  combines integration, API management, and automation is central to achieving digital agility. It enables  organizations to easily connect and integrate their data, applications, and devices to create new digital  capabilities and drive transformation projects.” 

The 2022 Connectivity Benchmark Report is created in collaboration with Deloitte Digital, who together  with MuleSoft, can help IT organizations across industries meet the continuously evolving demand to  connect data and create transformation opportunities for the business. To read MuleSoft’s full 2022  Connectivity Benchmark Report, download it here.