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Casualties of digital transformation? Poor integration costs businesses, report says

As enterprises seek to modernize and digitalize their operations, application and cloud integration issues are costing about half of large enterprises between $250,000-$500,000 per year, according to a new survey — and 4% of respondents reported that poor integration costs their business as much as $1 million per year.

The 2019 State of Ecosystem and Application Integration Report, based on an October 2018 survey by integration company Cleo, concluded that there is “a costly gap in the strategies and solutions required to support the modern business.”

“The fact that the majority of businesses face revenue losses of at least $250,000 each year is a startling statistic, and it’s a major pain point for the IT decision-makers polled,” said Cleo CMO Tushar Patel in a statement. More than half of the survey respondents reported that “deficiencies in integration resources and capabilities” contributed to a loss of between 50 and 150 orders each year.

Surveyed companies ran the gamut from technology, financial services and retail to healthcare and supply chain companies; almost 70% had annual revenues between $100 million and $1 billion, according to Cleo.

“The overwhelming consensus from these IT decision-makers is that new business demands – many of them brought by forces outside the company – are putting additional pressure on organizations and technologies to deliver better ecosystem integration solutions. And when they can’t, it’s costing the business money,” said Patel. “But for many of these organizations, it’s not an immediately solvable problem because they don’t have the strategy, the tools, the budget, or the resources to execute on these revenue-impacted initiatives.”

While 95% of survey participants said that they wanted to maintain a digital ecosystem, 38% of those reported that they lacked confidence in their “capacity to scale to support digital transformation initiatives foundational to successful ecosystem integration.”

The most frequently reported challenges with business-to-business solutions and processes were:

-The ability to integrate new applications, especially software-as-a-service apps. Technology companies were the most likely to say that it’s difficult to bring new customers into cloud and SaaS environments, according to Cleo’s survey.

-Automating critical transactions related to the enterprise’s digital ecosystem.

-Onboarding new customers and partners — 63% of respondents said that onboarding is too complex and takes too long.

-Visibility into end-to-end data flows; 60% of respondents said that end-to-end visibility of data flows was an important requirement to managing their digital ecosystem, and 38% felt that they could better support emerging business initiatives with better insights into their data flows.

“The good news is that most IT teams believe they can positively influence company value if they can find better ways to support end-to-end transactions with their ecosystem,” said Patel.

ABOUT AUTHOR

Kelly Hill
Kelly Hill
Kelly reports on network test and measurement, as well as the use of big data and analytics. She first covered the wireless industry for RCR Wireless News in 2005, focusing on carriers and mobile virtual network operators, then took a few years’ hiatus and returned to RCR Wireless News to write about heterogeneous networks and network infrastructure. Kelly is an Ohio native with a masters degree in journalism from the University of California, Berkeley, where she focused on science writing and multimedia. She has written for the San Francisco Chronicle, The Oregonian and The Canton Repository. Follow her on Twitter: @khillrcr