Over three-quarters of organizations are using multiple artificial intelligence (AI) models and 90% report they are experiencing difficulties integrating AI with other systems, according to the 2024 Connectivity Benchmark Report by MuleSoft. 

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MuleSoft's ninth annual Connectivity Benchmark Report, in collaboration with Vanson Bourne and Deloitte Digital, was produced from interviews with 1,050 IT leaders (management positions or above) across the globe (public and private sector with at least 1,000 employees). The report's executive summary suggests: 

• The new normal: AI inflection point amplifies the need for a coherent IT strategy. Eighty-seven percent of IT leaders report that the nature of digital transformation is changing. AI further complexifies the tech landscape, with 991 apps in the average enterprise. IT budgets increase to meet the surging demand. 
• AI adoption explodes, integration and security concerns are the biggest barriers.The AI genie is out of the bottle, with over three-quarters of organizations reporting they use multiple AI models. As many as 90% say difficulty integrating AI with other systems is a barrier, followed by 79% reporting security concerns.
• IT leaders acknowledge that data silos and systems fragility are holding their companies back.Almost universal, 98% of IT leaders report facing challenges regarding digital transformation. Key drivers are the persistence of data silos at 81% and the fragility of tightly coupled and highly dependent systems at 72%. 
• Automation is still a source of contention between IT and the business.Business users benefit greatly from the automation of their work (1.9 hours per employee per week) and demand more flexibility to automate. However, the majority of IT departments still need to figure out how to enable this in a secure and governed way. Two-thirds (66%) of automation projects have IT as the sole gatekeeper. 
• Virtually every company (99%) runs on APIs, but few have turned them into a strategic lever. APIs remain a powerhouse for productivity and revenue, with one-third of revenue attributed to API-related offerings. However, managing and securing data at scale has become increasingly complex with API sprawl. This sprawl is why one-quarter of all APIs go ungoverned  

Let's dig a bit deeper into the major findings of the report, focusing on the first three findings -- AI's inflection point, AI's explosive adoption, and the negative impact of data silos.

The new normal: AI inflection point amplifies the need for a coherent IT strategy - Top 3 insights

1. Organizations rely on IT leaders to guide the implementation of AI and automation. Only 75% of respondents state that their IT leaders communicate an upfront strategy.
   
2. IT budgets increase to accommodate surging demand for new projects. The average budget is$10.5 million over the past 12 months, and77% expect IT staff headcount to increase even further in the coming year.
   
3. 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 feel the nature of digital transformation is changing -- and this shift means the role of the CIO and other IT leaders is becoming more critical than ever. The nature of the customer experience and their expectations are also changing. Customers expect more, but data silos stand in the way.

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Nearly three-quarters (70%) of customer experiences are digital, but only 26% of organizations report providing a complete connected user experience across all channels. To further add to the challenge facing IT, organizations must balance nearly 1,000 applications to create a cohesive experience for end users, with each app having less than a four-year lifespan. 

But there is good news for IT -- budgets will increase to meet demand. IT teams have spent an average of$10.5 million on IT staff during the past 12 months. And over three-quarters (77%) expect their IT staff headcount to increase even further to meet rising project demand. More budget will also lead to greater demand for IT services. The number of projects asked of IT teams has risen by 39% from 2023.

AI adoption explodes, and integration and security concerns are the biggest barriers - Top 3 insights

1. Eighty percent of organizations report already using multiple AI models. And AI adoption will increase by 78% within the next three years.
   
2. AI is viewed as a solution to growing backlogs if used correctly:85% of IT leaders say the application of AI has increased developers' productivity in their organization.
   
3. But barriers remain.Over 90% report that integration issues impede AI adoption, 79% have security concerns, and 64% are concerned with ethical AI usage and adoption. Only 2% report there are no significant barriers to utilizing 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 ethical concerns, and blockers persist. While AI adoption is growing rapidly, a recent report shows that 64% of IT leaders are concerned with ethical AI usage and adoption. 

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The report also notes that AI success is dependent on integration. While most respondents believe AI increases productivity, it is dependent on integrated data. Nearly half of IT teams plan on adopting an AI solution in the coming year, but only 28% of apps are connected. Sixty-two percent feel their organization is ill-equipped to fully harmonize their data systems to leverage AI technologies. The concerns around integration are twofold: the difficulty integrating generative AI features with other software systems, and the need for integration between existing systems

Data silos and systems fragility are holding companies back - Top 3 insights

1. Eighty-one percent of respondents report that data silos are hindering their digital transformation efforts. Seventy-two percent feel their current IT infrastructure makes their systems overly dependent on one another.
   
2. IT teams struggle to integrate efficiently:98% report facing challenges regarding digital transformation. Skill gaps and compliance concerns top the list of challenges
   
3. The inability toconnect data-derived insights into user experiencesis the most commonly cited integration challenge for 75% of organizations.
   

The report reveals that 81% of IT leaders point to data silos as the biggest hindrance to digital transformation. Integration remains a top priority for implementing a digital transformation strategy,  while new technologies also emerge and create further challenges. 

With only 72% of applications being integrated/connected, IT teams must focus on increasing productivity to close this gap. All teams are seeking better integration. Teams across the organization depend on the efficient use of data from separate systems, according to IT leaders who report that nearly every department requires more integration.

Nearly all organizations (98%) report facing challenges when it comes to digital transformation, including lack of skill set and experience (38%), risk management and compliance (37%), legacy infrastructure (34%), migrating legacy software (34%), and integrating siloed apps and data. 

Since 2018, IT teams have faced an average 36% increase each year in the number of expected projects. The report suggests the path to efficiency is via better integration plans and execution. Organizations that have adopted an integration strategy have reported a vast array of benefits, including boosted customer experience and more significant return on investment.

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The Connectivity Benchmark 2024 Report also deep dives into automation. Automation is still a source of contention between IT and the business. Business users want to self-serve, but 66% of automations are still governed by IT. The growth in robotic process automation remains steady, with 31% of teams opting for the solution. This is a substantial rise 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 IT continues to struggle with an automation backlog. About two-thirds of IT developers implement and govern automations for business users. 

However, only 22% of IT leaders feel their strategy to enable non-technical business users to integrate apps and data sources powered by APIs is up to date. There is also a move towards citizen developers to help IT to address 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 few have turned them into a strategic lever. The explanation for this reality has a lot to do with company revenues. API-related offerings take the credit for a large portion of revenue. Thirty-three percent of all revenue is from APIs and API-related offerings. Also, APIs have contributed to increased revenue for 39% of respondents -- and decreased operational costs by 35%. If you're interested, you can learn more about the 2024 Connectivity Benchmark Report. 

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