Everyone understands how important apps can be for engaging and empowering customers, employees and partners, but less well known is the difficulty of delivering apps that meet the promises and expectations of the companies that design them.
Many enterprises are struggling to build apps on time, on budget, or with the intended business impact. Our latest research shows the extent to which global businesses are failing to meet their expectations when deploying apps. A quarter failed to meet their timeline, a fifth overran on their budget, and a similar proportion delivered fewer apps than planned. In total, almost half (45 percent) of all businesses failed in some way to meet the criteria for success in the following areas: app quality and performance, business impact, number of apps delivered, project cost and time of development.
By contrast, companies who have truly mastered app development -- the businesses that exceed their expectations on every criterion for success -- account for only eight percent of the total. It's an elite club of businesses that we call the 'App Masters'. What's fascinating about this select group of enterprises is not so much that they are successful at designing and deploying apps -- it is how their approach to their IT organization differs from the rest of the pack, and how they outperform their competitors across a whole range of business metrics.
The business impact of App Success
Being successful at apps is about so much more than the application itself, important as that might be. The bigger picture is that enterprises that successfully deploy apps are simply better at using technology to drive business results than their industry peers.
Out of our survey of 800 global businesses, we found that those with the strongest capabilities to deploy apps, operate APIs, and use data analytics far outperformed their respective sectors across a range of business metrics: revenue, market share, margin, customer satisfaction, and launching new products and services. When it came to the proportion of businesses that strongly outperformed their industry average in the last year, the digital leaders enjoyed a clear advantage over the digital laggards in every business criterion.
When it comes to application development, successful companies all share a set of common IT and business patterns. Enterprises that are struggling with application delivery are making their own mistakes because they have not grasped what the App Masters have realized: that success depends on taking an 'outside-in' approach to IT.
Outside-in IT
Enterprises that are successful with apps are distinguished by the way their IT departments have shifted away from traditional patterns of resourcing and development. These App Masters have moved beyond the "build versus buy" dilemma to a position where they see IT as an ecosystem orchestrator, rather than merely the platform for developing technologies. They understand that legacy systems are a stumbling block to delivering great digital and mobile experiences for their employees, customers and partners -- instead, they need to exploit external resources and technology partners wherever it gives them the edge. This is the "outside-in" approach to IT that differentiates the leaders from the laggards.
The cloud is a classic example of outside-in IT and provides a great illustration of how App Masters' approach differs from the rest. Eighty-five percent of App Masters have replaced legacy components with public or private cloud alternatives, and on average these enterprises have moved 80 percent of their architecture to Infrastructure-as-a-Service and 80 percent of their application development to Platform-as-a-Service. In stark contrast, 'app challenged' enterprises have moved an average of only 44 percent of their architecture to Infrastructure- and Platform-as-a-Service.
Of course, cloud adoption is not in itself the reason for success. Rather, it demonstrates that these companies have identified the strategic value of these resources -- the technical and design expertise that it brings, but also how it enables them to work more effectively with outside partners. By contrast, the app-challenged tend to see cost, time-to-market and reduced IT management as the primary reasons for adopting cloud technologies.
Partnering for success
Just six percent of 'app challenged' enterprises say that they proactively look for external resources instead of prioritizing the use of internal resources. By comparison, one third of the most successful enterprises work predominantly or exclusively with outside infrastructure partners to develop and build their apps, more than double the average of all companies. This contrast is all the more striking because 'app masters' are more likely to see their existing internal expertise as a net asset for building and deploying apps than the 'app challenged.' App masters are choosing a strategic decision to leverage the best resources, whether they are within or beyond the walls of the firm.
The lesson for aspirant App Masters is clear: identify the external partners who have the pedigree and ability to help you design and deliver apps successfully and make sure that your IT infrastructure is geared toward supporting these partnerships. For this to work effectively, it is crucial that enterprises can provide partners with maximum access to the business data on which these apps are based, so it is no surprise that the most successful companies are those deploying application programming interfaces (APIs) and data analytics.
As demand grows for contextually-aware, highly personalized, predictive apps, delivered on tight timeframes to an ever-growing range of devices, the application architecture has to move beyond the integration-server / application-server model that has characterized much of the last decade of web application development.
Instead, organizations need to adopt an architecture that fully supports four types of API communication: app-to-client, app-to-backend, app-to-app and, finally, the exploded app built from micro-service APIs. This architecture not only enables apps to be built in an agile fashion, deployed at scale and compatible with future devices; it means that apps can also be easily connected to every other application inside and outside the enterprise. This facilitates a flow of relevant data between apps and analytics systems, increasing the intelligence and performance of these applications in real-time.
Having advocated the outside-in approach, let me strenuously deny that I am calling on enterprises to outsource everything app-related. Enterprises that try to spend their way towards better app development are not likely to meet with success. In fact, existing internal technology infrastructure and expertise can be a significant benefit. The key for enterprises is to establish where they can benefit from using external resources, and making sure that they have technology in place to facilitate that relationship with partners. Only then can they start to become masters of their apps and, consequently, masters of their business.
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