More than three-quarters of organizations are using multiple artificial intelligence (AI) models, and 90% report that they are experiencing difficulty integrating AI with other systems, 2024 Connectivity Benchmark Report by MuleSoft.
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In collaboration with MuleSoft’s Ninth Annual Connectivity Benchmark Report Vanson Bourne And Deloitte Digital, developed from interviews with 1,050 IT leaders (management positions or above) from around the world (with at least 1,000 employees in the public and private sectors). The executive summary of the report suggests:
- The new normal: AI inflection points heighten the need for a coherent IT strategy. 87 percent of IT leaders report that the nature of digital transformation is changing. AI further complicates the technology landscape with 991 apps in the average enterprise. IT budgets grow to meet growing demand.
- As AI adoption explodes, integration and security concerns are the biggest barriers. With the AI genie out of the bottle, more than three-quarters of reporting organizations use multiple AI models. Nearly 90% say difficulty integrating AI with other systems is a barrier, followed by 79% reporting security concerns.
- IT leaders recognize that data silos and system fragility are holding their companies back. Almost universally, 98% of IT leaders report facing digital transformation challenges. Key drivers are the persistence of data silos at 81% and the fragility of tightly coupled and highly interdependent systems at 72%.
- Automation is still a source of debate between IT and business. Business users benefit greatly from the automation of their work (1.9 hours per worker per week) and demand more flexibility for automation. However, IT departments still have to figure out how to enable this in a secure and controlled way. Two-thirds (66%) of automation projects have IT as the sole gatekeeper.
- Virtually every company (99%) runs on APIs, but few companies have made them a strategic lever. APIs remain a productivity and revenue powerhouse, with API-related offerings accounting for one-third of revenue. However, managing and securing data at scale has become increasingly complex with API sprawl. A quarter of all APIs are unregulated because of this proliferation
Focusing on the first three findings – AI’s inflection point, AI’s explosive adoption and the negative impact of data silos, let’s dig a little deeper into the main findings of the report.
The New Normal: AI Inflection Point Raises Need for a Coherent IT Strategy – Top 3 Insights
- Organizations rely on IT leaders to guide the implementation of AI and automation. only 75% of respondents said their IT leaders communicate a proactive strategy.
- IT budgets grow to accommodate the growing demand for new projects. The average budget over the past 12 months is $10.5 million, and 77% expect the number of IT workers to increase further in the coming year.
- AI has created more complexity for integration strategies. Organizations now use an average of 991 applications across their digital estate, with an average lifespan of four years.
The report notes that IT leaders believe the nature of digital transformation is changing — and that change means the role of CIOs and other IT leaders is becoming more critical than ever. The nature of customer experience and their expectations is also changing. Customers expect more, but data is still the bottleneck.
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Almost three-quarters (70%) of customer experience is digital, but only 26% of organizations report providing a fully connected user experience across all channels. Adding to the challenge facing IT, organizations must balance nearly 1,000 applications to create a cohesive experience for end users, each app with a lifespan of less than four years.
But there’s good news for IT — budgets will increase to meet demand IT teams spent an average of $10.5 million on IT staff in the past 12 months. And more than three-quarters (77%) expect to increase their IT staff to meet growing project demands. More budget will lead to greater demand for IT services. From 2023, the number of projects asked by IT teams will increase by 39%.
AI Adoption Explodes, Integration & Security Concerns Are Biggest Barriers – Top 3 Insights
- Eighty percent of organizations already report using multiple AI models. And AI adoption will grow by 78% over the next three years.
- AI is seen as a solution to growing backlogs if used properly: 85% of IT leaders say that the implementation of AI has increased the productivity of developers in their organization.
- But obstacles remain. More than 90% report that integration issues hinder AI adoption, 79% have security concerns, and 64% are concerned about ethical AI use and adoption. Only 2% report that there are no significant barriers to using their data for AI.
AI adoption continues to explode and so do IT project backlogs. As backlogs grow, IT leaders look to AI to help. IT leaders are balancing AI adoption as an ethical concern, and blockers persist. Although AI adoption is growing rapidly, a recent report shows that 64% of IT leaders are concerned with ethical AI use and adoption.
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The report also notes that AI success is dependent on integration. While most respondents believe that AI increases productivity, it is dependent on integrated data. Nearly half of IT teams plan to adopt an AI solution in the next year, but only 28% of apps are connected. Sixty-two percent feel that their organization is not equipped to fully adapt their data systems to take advantage of AI technology. The concerns surrounding integration are twofold: the difficulty of integrating generative AI features with other software systems and the need for integration between existing systems.
Data silos and system fragility holding companies back – Top 3 insights
- Eighty percent of respondents reported that data silos are hindering their digital transformation effortss 72 percent feel their current IT infrastructure makes their systems overly dependent on each other.
- IT teams struggle to efficiently integrate: 98% report facing digital transformation challenges. Skills gaps and compliance concerns top the list of challenges
- disability Connect insights from data to user experience Integration is the most cited challenge for 75% of organizations.
The report reveals that 81% of IT leaders point to data silos as the biggest barrier to digital transformation. Integration remains a top priority for implementing a digital transformation strategy, while new technologies also emerge and pose further challenges.
With only 72% of applications integrated/connected, IT teams must focus on increasing productivity to close this gap. All parties are seeking better integration. According to IT leaders who report that almost every department needs more integration, teams across organizations rely on efficient use of data from separate systems.
Almost all organizations (98%) report facing challenges in digital transformation, including lack of skill sets and experience (38%), risk management and compliance (37%), legacy infrastructure (34%), legacy software migration (34% ) %) %), and integrating siled applications and data.
As of 2018, IT teams experienced an average 36% increase in the number of projects expected each year. The report suggests that the path to efficiency is through better integration planning and execution. Companies that have adopted an integration strategy report a number of benefits, including enhanced customer experience and more significant return on investment.
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The Connectivity Benchmark 2024 report also dives deeper into automation. Automation is still a source of debate between IT and business. Business users want self-service, but 66% of automation is still handled by IT. Growth in robotic process automation continues, with 31% of teams opting for the solution. This is a significant increase from 13% in 2021.
Automation continues to demonstrate its value by, among other things, driving operational efficiency (reported by 56% of automation users) and productivity (reported by 52%). The report says that IT continues to struggle with an automation backlog. About two-thirds of IT developers implement and manage automation for business users.
However, only 22% of IT leaders feel their strategy is up to date to enable non-technical business users to integrate API-driven apps and data sources. There’s also a move toward citizen developers to help IT deal with the growing backlog — low-code and no-code solutions must be part of the innovation and development strategy.
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The report concludes by reminding us that almost every company runs on APIs, but very few have turned them into strategic levers. The explanation for this fact has a lot to do with the company’s revenue. API-related offerings take credit for a large portion of revenue. Thirty-three percent of all revenue is from APIs and API-related offerings. In addition, APIs contributed to an increase in revenue of 39% of respondents — and reduced operating expenses by 35%. If you are interested, you can learn more about 2024 Connectivity Benchmark Report.