Businesses that build digital capabilities through a combination of apps, APIs and analytics are seeing revenues rise
More than one in three UK companies surveyed say digital improvement is their top priority; however, most are focusing on simply building mobile apps and not incorporating the API and analytics programs necessary for enabling digital business. This is according to a new study of 252 senior executives and IT decision makers across the UK in four major industries by Apigee®.
The Apigee Institute’s 2015 UK Digital Business Survey Snapshot reveals that apps alone may not be enough to harness the full potential of digital business; effective digital transformation comes from implementing a powerful combination of apps, APIs, and analytics. The report finds that companies that are investing in these core digital technologies are eight times more likely to report increased revenue from digital activities than those who delivered apps alone.
This advantage is not simply a matter of number of companies with increased revenue from digital, but also a matter of degree. The respondents who only delivered apps yet saw increased revenue reported a median of about £266,000 in increased revenue. In contrast, the respondents who invested in apps, APIs, and analytics saw median returns of over £9,000,000.
Ground continues to shift
The Apigee Institute report reveals that 79 per cent of UK businesses in the banking, travel and tourism, telecommunications and retail industries are seeing a fundamental shift in customer expectations due to digital growth. The same proportion recognise that disruption from digital activities has already occurred in their industry. Possibly as a result, more than eight out of ten (86 per cent) respondents report an existing company-wide digital transformation initiative. To deliver on this, 71 per cent of respondents report that their company deployed mobile apps in the twelve months before the survey.
Bryan Kirschner, director of the Apigee Institute, said: “In what’s rapidly becoming a mobile-first business world, all manner of industries are being ‘shaken up’ by digital innovation. The growing sophistication of digital technology and increasing customer expectations are creating new demands for enterprises. Regardless of industry, every business needs to change the way it interacts with customers and partners – using data and digital technologies to create new digital experiences, new efficiencies, and to grow and expand faster in today’s digital world.”
Putting customer experience first
With the proliferation of mobile devices and apps, many UK businesses are seeing opportunities to connect with customers, wherever they are, through digital information and services. According to the survey findings, the top drivers for embarking on digital transformation initiatives among UK businesses include providing best customer experience (37%), new services or experiences for customers (37%), identifying new revenue streams for the business (32%) and remaining competitive (29%). About a quarter (24%) of respondents are also turning to digital activities to help cut costs.
Digital business: more than a mobile app
Seventy-one per cent of respondents deployed a mobile app in the 12 months before the survey, and more than half (55%) plan to offer more services via mobile devices in 2015. But there is still significant work to be done. Significant majorities of those surveyed consider developing APIs (75%) and the ability to collect and analyse big data (77%) important priorities for 2015. Yet, only 26 per cent of surveyed UK executives report plans to deploy new APIs in 2015, and only 35 per cent plan to incorporate big data analytics into their products, processes and services.
According to Kirschner, “We believe businesses need to move beyond merely rolling out mobile apps and instead look more holistically at how they can understand and add value to their customers using data insights and analytics. Our research shows that only 10 per cent of ‘app-only’ companies have seen an increase in revenue from their digital efforts versus 81 per cent of those who have incorporated data analytics and implemented APIs along with their deployed apps.”
Enterprises that have taken action in the past year on three digital capabilities—apps, APIs, and analytics—may have won themselves an edge in the new digital economy. Compared to those who only reported deploying a mobile app in 2014, respondents who delivered this ‘digital trifecta’ are more than twice as likely (41% to 15%) to have seen an increase in their ability to innovate. And while they have an edge on cost savings to date—63 per cent report savings versus 49 per cent of ‘app only’ companies—they dominate on using digital to drive top-line growth in that they are eight times more likely to report increased revenue from digital activities than those who delivered apps alone.
UK business leaders in this survey report that their top three barriers to digital transformation come in the form of limited budgets (35%), poor IT infrastructure (29%), and restricted executive support (25%).
“The research tells us that the majority of UK businesses acknowledge that digital transformation is critical for their business, and are also recognise the importance of data analytics and APIs as part of this journey,” adds Kirschner. “Data is the fuel that enterprises use to engage with, understand and bring value to its customers, market and business. Data is delivered by APIs and customers engage with data through easy to use mobile apps. Together, data, APIs and apps are the core constructs of digital business.”