In my first post of this blog series, I set the stage for why every business leader should care about integration. From a business perspective, there are significant sources of value that modern integration creates. In this post, I’ll focus on the first of six business sources of value — faster time-to-market.
Every business cares about time-to-market. Whether it’s “speed,” “agility,” or “velocity” — all generally manifest in faster time-to-market. Search the SEC EDGAR database and you see the term “speed” come up in the majority of 10-k filings every year (3,000+). Speed is important regardless of the industry in which you play, but in the majority of organizations, it’s a pie-in-the-sky ideal rather than a reality.
According to MuleSoft’s connectivity benchmark report, 87% of organizations say integration challenges are hindering their digital transformation efforts. Without modern integration, you’ll have bottlenecks, and with bottlenecks, you’ll have a slow time-to-market.
So then, how does modern integration drive time-to-market? When done right, modern integration will make your developers more productive. And when your developers are more productive they’ll deliver integration projects faster. When integration projects are delivered faster, a significant chunk of your project’s critical path will be eliminated.
Example use case: Retail company with a $50M mobile app
Let’s look at an example. You’re a retailer with a new customer mobile application you expect will deliver $50M in incremental revenue within the next five years:
You don’t expect revenue in Year 1, as your IT team estimates it will take 12 months to get this mobile app live. You expect there will be revenue growth annually, and your projections are based on both organic customer adoption of your mobile app as well as a result of continuous improvement of the app (introducing new features, functions, etc.). You estimate 60% of annual revenue growth will come from organic customer adoption, 40% from continuous enhancements.
Now, what if you could improve your time-to-market for this mobile app? Not just for the initial release, but for the subsequent enhancements as well? How and where does modern integration play a role? In a typical mobile project, according to Gartner, up to 70% of project work is integration-related. What if you could reduce that amount significantly?
Customers that leverage MuleSoft to power their modern integration improves their integration delivery speed by 78% on average, according to Omdia. If 70% of this mobile app project is integration, an improvement in time-to-market will result in a six months faster launch of this project. That means faster to revenue, nearly $3M in topline impact.
But remember, the time-to-market improvement isn’t just for that initial launch. Rather, you’ll continuously enhance this app to drive improved customer experiences, and thus incremental growth in revenue. As stated, you project that 40% of revenue growth will be attributed to app enhancements.
At current state, your IT team estimates that each enhancement will take approximately four months to deliver. Over the course of a year, that means that you effectively have an enhancement capacity of three enhancements per year (while assuming only one enhancement in “Year 1” as you want about six months of operation of the mobile app before you start to action on the feedback from your customer base). Additionally, you’ve projected the effective value of each enhancement, as shown below:
Applying the same assumptions and logic as we did with the initial time-to-market calculation, with modern integration, feature enhancements will now take 1.8 months to launch instead of 4. Your capacity for enhancements will increase to approximately six per year instead of three. And your incremental revenue gains from these enhancements will be to the tune of $88M over five years:
Putting it all together, with modern integration, your new revenue projections are $145M from the mobile application over five years:
This amounts to a net improvement of $55M dollars (+61%) compared to your original business case projections:
Now that business outcome is something business leaders will care about. While this was a fictitious example, the order of magnitude impact is not. Whether it’s Unilever deploying new initiatives 3-4x faster. Or ASICS delivering its new eCommerce platform 2.5x faster. Or Airbus delivering its projects 4x faster. Think about if you had an integration strategy you collaboratively established with IT and the impact you could drive out of your initiatives.
Integration should be top-of-mind for business leaders
Modern integration’s impact on time-to-market is significant. Integration should be, better yet, must be, top-of-mind for business leaders. In our digital economy, it separates the leaders from the laggards. Integration decisions can’t be made by IT in isolation any longer. The business must engage — it’s too important for you not to.
With that, I’ll leave you with some questions you can immediately take to your IT team for your next digital initiative:
- How are we architecting our integrations to connect the necessary data, applications, and business processes? (e.g., API-based, batch, point-to-point?)
- Are we creating any technical debt with our approach? If so, what’s the downstream impact?
- What are the long-term implications of our integration approach? Will it make updates, enhancements, and general maintenance easier or harder to accomplish? What’s the potential cost/revenue impact?
- What is our time-to-market for our integrations on our initial release? What is our projected time-to-market for updates and enhancements down the road? How can we improve either/both? What’s the cost/revenue impact?
Next up in this blog series, we’ll be diving into the impact modern integration can have on innovation within your organization.
MuleSoft’s Mobilize team specifically works with organizations to help them establish business-focused integration strategies through our consulting engagements. Contact us today to begin your journey.