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Australian firms grapple with business-IT gap

The growing chasm between business and IT has hit Australia more than other countries, according to a study on the state of digital transformation initiatives

The growing chasm between business and IT is proving to be a major challenge to Australian organisations that are undertaking digital transformation initiatives, a study has found.

According to MuleSoft’s 2019 Connectivity benchmark report, 78% of Australian businesses are going through digital transformation, but 44% of them reported challenges in aligning business and IT in their digital initiatives.

This figure was the highest among the study’s 650 respondents, mostly IT decision makers who hail from countries including the US, UK, Germany, Netherlands, Australia, Singapore and China. They represent large enterprises with least 1,000 employees.

The challenge faced by Australian respondents is exacerbated by the number of projects they are expected to deliver, which is increasing by 32% this year.

At the same time, just 20% of Australian respondents expect their IT budgets to increase by over 10%, posing significant challenges for organisations that are trying to achieve digital transformation. 

One strategy to bridge the gap between business and IT is the use of application programming interfaces (APIs), which can help to break down organisational and data silos.

Those that have done so, according to the study, are already achieving key business outcomes, including greater productivity (59%), increased innovation (47%), decreased operational costs (25%) and increased revenue growth (22%).

Furthermore, a third of Australian organisations said APIs are generating more than 25% of their revenue.

One organisation that has benefitted from the use of APIs is Deakin University, which is using APIs in several applications and services such as travel management, learning platforms and campus accommodation.

It also runs an API store to help developers speed up integration and lower costs by promoting reuse of application components, removing duplication of development, and simplifying security, data governance and API management.

“Application developers can easily discover and reuse APIs, while new APIs can be mocked in short timeframes, speeding up the development lifecycle and time to market,” said Peter Dimovski, integration solutions and design manager at Deakin University.

Jonathan Stern, MuleSoft’s regional vice-president for Australia and New Zealand, added that besides reinforcing the need to be more agile and responsive and able to iterate faster, the study also showed that Australian organisations’ digital transformation initiatives are focused on improved customer experience.

According to the study, 81% of Australian respondents listed improving customer experience as a digital transformation goal, compared to a global average of 71%. “This distils down into gaining a more complete understanding of a customer and a more cohesive customer engagement,” Stern said.

“It’s also clear that digital transformation has evolved from a solely IT-driven initiative to a business-wide change. Time-pressured IT departments can address these challenges by enabling their business stakeholders to innovate faster by packaging up capabilities as reusable APIs. These plug into an application network, unlocking valuable data, reducing costs and boosting agility,” he added.

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