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FOUR OUT OF FIVE BUSINESSES SAY FAILURE TO COMPLETE DIGITAL TRANSFORMATION INITIATIVES WILL NEGATIVELY IMPACT REVENUE IN THE NEXT 12 MONTHS

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FOUR OUT OF FIVE BUSINESSES SAY FAILURE TO COMPLETE DIGITAL TRANSFORMATION INITIATIVES WILL NEGATIVELY IMPACT REVENUE IN THE NEXT 12 MONTHS

Integration Challenges Are Slowing Down Digital Transformation Efforts for Majority of Companies

MuleSoft Inc. (NYSE: MULE), provider of the leading platform for building application networks, today announced the findings of its Connectivity Benchmark Report 2018 on digital transformation initiatives and the business impact of APIs. This year’s study specifically looks at how IT decision makers (ITDMs) are handling digital transformation, IT operations and change management.

The global survey of 650 ITDMs reveals that four out of five businesses (81 percent) are expected to see a negative impact on revenue in the next 12 months if they fail to complete digital transformation initiatives. While IT budgets have remained relatively static, ITDMs have seen project volumes grow, on average, by 27 percent. As a result, IT departments are being stretched even thinner. Most concerning, the research reveals an IT delivery gap, with two-thirds of ITDMs admitting they were unable to deliver all projects asked of them last year.

Among the key results of the survey:

Integration headaches are creating an IT delivery gap and hindering innovation

One of the main contributors to the growing IT delivery gap is integration, which continues to be a significant drain on time, budget and resources. The survey results show the vast majority (89 percent) of ITDMs believe that integration challenges are slowing or hindering digital transformation within their organizations.

  • According to Gartner, “Worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 4.5 percent from 2017.”* Based on our survey results, organizations are spending nearly a quarter (22 percent) of their annual IT budgets on integration and thus could equate to over $800 billion spent on integration in 2018.
  • On average, organizations are using 1,020 individual applications across their business. However, on average, a relatively small number (29 percent) of these applications are currently integrated or connected together.
  • A significant number (81 percent) of ITDMs admit that point-to-point integration has created some of the biggest headaches their organizations have ever seen. This is clearly a source of frustration for many ITDMs; in fact, at least 80 percent agree “point-to-point integration must die in the next five years if organizations are to reduce costs, deliver on business needs faster, remain competitive, deliver innovation faster, and extract more value from data.”

“When it comes to digital transformation, it is no longer a case of ‘if’ but ‘when’ for organizations. However, there is growing impatience at a business level to make the goals of digital transformation a reality right now, as those that fall behind will start to lose revenue and market share fast,” said Ross Mason, founder and vice president of product strategy, MuleSoft. “Today, CIOs and IT decision makers are under a huge amount of pressure to meet business expectations, but it’s clear that they are struggling to keep up. Integration challenges are creating an IT delivery gap, and organizations can no longer afford to let it drain time, resources and budget.”

Inefficient IT operating models are slowing the pace of change

It is clear that organizations need to adopt a more efficient IT operating model. Yet, this is easier said than done as ITDMs continue to face the age-old dilemma of ‘keeping the lights on’ versus innovating. Furthermore, when it comes to building new applications and services, it is very common for development teams to work in isolation, meaning organizations are unable to discover and reuse the assets that have been created.

  • ITDMs continue to spend the majority (63 percent) of their time on “running the business” activity compared to innovation and development projects.
  • 93 percent of ITDMs admit that their application development process could be more efficient.
  • Just a third of organizations’ internal IT software assets and components are available for developers to reuse.83 percent of ITDMs say their organization does not always reuse software assets when it comes to developing new products and services.

API strategies are delivering greater efficiency, innovation and revenue

For organizations to deliver digital transformation and innovate quicker, they need to enable self-serve IT, where the wider business can do more on its own without relying on central IT for each project. By making IT assets discoverable and reusable via APIs, organizations can become more agile and competitive to drive revenue.

  • 93 percent of ITDMs believe that IT self service will be critical to their digital transformation success. From those organizations that own APIs, more than half (58 percent) have been able to leverage them to increase productivity; while nearly half (48 percent) have increased innovation.
  • By leveraging APIs, organizations have been able to increase employee engagement and collaboration (43 percent), meet line-of-business demands quicker (35 percent), increase IT self service (35 percent) and decrease operational costs (34 percent).
  • On average, ITDMs reported that a quarter of their organization’s revenue is now generated from APIs and API-related implementations. More than a third (35 percent) of respondents stated over a quarter of their organization’s revenue came from APIs.

Marshall Van Alstyne, MIT digital fellow and Boston University professor, commented: As the digital economy continues to grow, more organizations are starting to realize the benefits of an API strategy and the financial benefits it can bring. MuleSoft’s Connectivity Benchmark Report corroborates our own findings that there is a positive relationship between the intensity of API usage and financial performance.”

Digital transformation isn’t just a matter of buying new software and hoping it solves all problems. In today’s digital economy, more data, applications and devices need to be connected than ever before – yet organizations are suffering from the chronic integration issues of the past. However, through application networks, organizations can make more of their IT assets reusable and make application development much more efficient. This will truly transform how IT functions in the modern enterprise and deliver greater value to the business,” added Mason.

Business

Sunak to raise business tax to pay for COVID-19 support – The Sunday Times

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Sunak to raise business tax to pay for COVID-19 support - The Sunday Times 1

(Reuters) – British finance minister Rishi Sunak is set to increase a tax on business to pay for an extension to COVID-19 support schemes in the budget next month, The Sunday Times reported https://bit.ly/3ujaBcU.

Sunak, in his speech on March 3, will announce he is increasing corporation tax from 19 pence in the pound and will outline a pathway where it rises to 23 pence in the pound by the time of the next general election, the report said. The move will raise an expected 12 billion pounds ($16.8 billion) a year, the report added.

According to the report, at least 1 pence is set to be added to the bill for business from this autumn, at a cost to business of 3 billion pounds, with further rises in subsequent years.

Allies of Sunak clarified he would not increase corporation tax higher than 23%.

These measures will be helpful in paying for an extension to the furlough scheme, VAT cuts and business support loans until at least August.

Unlike the 2010 Conservative-led government, which pursued spending cuts to rebalance the economy after the global financial crisis, Sunak is expected to defer most of the toughest decisions about how to pay for that support in his budget speech.

“The corporation tax hike will be higher than expected and the extension of the support schemes will be longer than most people expect,” the newspaper quoted a source as saying.

Insiders indicated the stamp duty holiday on property purchases would also be extended in line with the other coronavirus support measures, the report said.

Britain’s economy had its biggest slump in 300 years in 2020, when it contracted by 10%, and will shrink by 4% in the first three months of 2021, the Bank of England predicts.

($1 = 0.7136 pounds)

 

(Reporting by Vishal Vivek in Bengaluru; Editing by Lincoln Feast.)

 

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Foxconn chairman says expects “limited impact” from chip shortage on clients

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Foxconn chairman says expects "limited impact" from chip shortage on clients 2

TAIPEI (Reuters) – The chairman of Apple Inc supplier Foxconn said on Saturday he expects his company and its clients will face only “limited impact” from a chip shortage that has rattled the global automotive and semiconductor industries.

“Since most of the customers we serve are large customers, they all have proper precautionary planning,” said Liu Young-way, chairman of the manufacturing conglomerate formally known as Hon Hai Precision Industry Co Ltd

“Therefore, the impact on these large customers is there, but limited,” he told reporters.

Liu said he expected the company to do well in the first half of 2021, “especially as the pandemic is easing and demand is still being sustained.”

The global spread of COVID-19 has increased demand for laptops, gaming consoles, and other electronics. This caused chip manufacturers to reallocate capacity away from the automotive sector, which was expecting a steep downturn.

Now, car manufacturers such as Volkswagen AG, General Motors Co and Ford Motor Co have cut output as chip capacity has shrunk.

Counterpoint Research says the shortage has extended to the smartphone sector, with application processors, display driver chips, and power management chips all facing a crunch.

However, the research firm predicts Apple will face a minimal impact, due to its large size and its suppliers’ tendency to prioritise it. Apple is Foxconn’s largest customer.

Foxconn is looking at other areas for growth, including in electric vehicles (EVs), and Liu said their EV development platform MIH now had 736 partner companies participating.

He expected it would have two or three models to show by the fourth quarter, though did not expect EVs to make an obvious contribution to company earnings until 2023.

Liu also said the company was still looking for semiconductor fab purchase opportunities in Southeast Asia after not winning a bid to take over a stake in Malaysia-based 8-inch foundry house Silterra.

(Reporting by Ben Blanchard and Jeanny Kao; Writing by Josh Horwitz; Editing by William Mallard and Ana Nicolaci da Costa)

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EU seeks alliance with U.S. on climate change, tech rules

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EU seeks alliance with U.S. on climate change, tech rules 3

By Sabine Siebold and Kate Abnett

BERLIN (Reuters) – Europe and the United States should join forces in the fight against climate change and agree on a new framework for the digital market, limiting the power of big tech companies, European Union chief executive Ursula von der Leyen said.

“I am sure: A shared transatlantic commitment to a net-zero emissions pathway by 2050 would make climate neutrality a new global benchmark,” the president of the European Commission said in a speech at the virtual Munich Security Conference on Friday.

“Together, we could create a digital economy rulebook that is valid worldwide: a set of rules based on our values, human rights and pluralism, inclusion and the protection of privacy.”

The EU has pledged to cut its net greenhouse gas emissions to zero by 2050, while President Joe Biden has committed the United States to become a “net zero economy” by 2050.

Scientists say the world must reach net zero emissions by 2050 to limit global temperature increases to 1.5 degrees above pre-industrial times and avert the most catastrophic impacts of climate change.

The hope is that a transatlantic alliance could help persuade large emitters who have yet to commit to this timeline – including China, which is aiming for carbon neutrality by 2060, and India.

“The United States is our natural partner for global leadership on climate change,” von der Leyen said.

She called the Jan. 6 storming of the U.S. Capitol a turning point for the discussion on the impact social media has on democracies.

“Of course, imposing democratic limits on the uncontrolled power of big tech companies alone will not stop political violence,” von der Leyen said. “But it is an important step.”

She was referring to a draft set of rules unveiled in December which aims to rein in tech companies that control troves of data and online platforms relied on by thousands of companies and millions of Europeans for work and social interactions.

They show the European Commission’s frustration with its antitrust cases against the tech giants, notably Alphabet Inc’s Google, which critics say have not addressed the problem.

But they also risk inflaming tensions with Washington, already irked by Brussels’ attempts to tax U.S. tech firms more.

Von der Leyen said Facebook’s decision on a news blackout on Thursday in response to a forthcoming Australian law requiring it and Google to share revenue from news underscored the importance of a global approach to dealing with tech giants.

(Additional reporting by Foo Yun Chee; editing by Robin Emmott and Nick Macfie; editing by Jonathan Oatis)

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