Cleo has published its 2022 State of Ecosystem & Application Integration Report. The report focused on one of the biggest concerns business leaders have in 2022, disruption to their supply chains.
The Cleo perspective is that some of this disruption is solvable by pursuing an integrated ecosystem. Integration issues remain and are costing businesses money. Of greatest concern is that the issue is worsening rather than improving. 14% say they are losing more than $1 million every year, an increase of 4% from the previous two years.
Unfortunately, the report does not seem to dive into the details of why that is the case. Perhaps in future years, it may mix qualitative with quantitative questions. There could be causes for the situation worsening. Recent supply chain challenges have meant that organisations have introduced flexibility in their supply chain to meet customer demand. This has often meant new suppliers with new systems that need new integrations.
The report is based on a survey carried out by Dimensional Research of 323 participants who design, build and manage applications or infrastructure integrations. 83% of responses were from North America, and the remainder were from Europe.
The future is an integrated ecosystem
There is hope for the future. 59% of organisations are increasing budget, and 81% plan to move integration to the cloud over the next 12 months. The challenges for developing an integrated ecosystem for supply chains broadly remain unchanged.
Legacy applications remain the biggest challenge, but they reduced to 51% from 63% in 2019. Legacy integration solutions are now a slightly bigger challenge for many (52%). Firms are consolidating those systems, with only 39% saying they are a barrier (48% in 2019). Other challenges are the reliance on manual processes (46%) and a lack of integration talent. 35% of respondents do not have enough staff with the right integration skills.
Ultimately, according to the research, organisations need to consider new ways and new technology to solve this riddle. Cleo believes that the Cleo Integration Cloud(CIC) can provide an answer to that challenge.
Tushar Patel, CMO of Cleo, commented: “Among business leaders surveyed, supply chain disruption was viewed as second only to cyber threats as the greatest external risk to their business.
“Yet many companies are perplexed over how supply chain disruption can be overcome. They know more automation is needed for supply chain agility, but some still question whether their problems originate internally or with business partners. ‘Is it them or is it us?’ they wonder, and this uncertainty is stalling investment decisions for some organizations. Meantime, they’re bleeding profits and damaging important business relationships.”
Once deployed, an integration ecosystem offers several benefits respondents believe:
- 63% believe Ecosystem Integration can deliver cost savings for their business
- 54% believe Ecosystem Integration can help them improve their SLA performance
- 43% believe Ecosystem Integration can deliver faster order processing
- 42% believe Ecosystem Integration can deliver happier customers
What else the report has to say
While the focus of the report looks at the move towards integration ecosystems. It reveals how they can help with challenges such as supplier onboarding. There is also information about the types of B2B integrations that companies need to support. The top four are:
- Relational Databases – 64%
- Cloud Storage – 60%
- CRM – 55%
- ERP – 48%
While non-relational databases scored 22%, it is not clear whether this included Graph Databases. Amazingly 3% require no B2B integrations, though again, there is no reason why this is the case.
Another insight from the survey was around the top business risks. As mentioned before, supply chain disruption was number two. However, Cyber-security threats are seen as the biggest risk. The top five risks are:
- Cyber Security threats – 85%
- Supply Chain Disruption – 56%
- Pandemic – 51%
- Labour shortages – 51%
- Inflationary economy – 34%
Many of these risks are interrelated, the talent shortage for integration technology. The pandemic has certainly increased supply chain disruption. Cleo does not offer cyber-security software and views expenditure on it as risk mitigation, rather than opportunity creation.
The report notes in its conclusion: “Only by confronting supply chain disruption directly by adopting more sophisticated integration strategies that yield greater agility and control will companies emerge victorious and gain a step on their competition. “
Enterprise Times: What does this mean
The report naturally focuses attention on the Cleo Integration Cloud, and it does a very good job of doing that. There are a lot of insights within the report that goes beyond CIC and supply chain disruption. They highlight the current challenges and risks faced by organisations. As this is also the third report that Cleo has produced, trends are emerging.
However, in analysing those trends, one must be cautious. The survey sample was not large; it was US-centric and from a mix of industries. The largest industry sample was Financial Services, with only 16% of the respondents only 51 replies. Similarly, the report would have been strengthened with qualitative interviews to answer some of the questions raised in the survey.
The report is well worth reading for organisations that want to better understand their peers’ challenges and opportunities. At around 3,500 words, it is not a short white paper, but the authors have used graphs that represent the survey results well.
Patel concluded: “The chronic challenges of 2021 made it apparent that supply chain issues were in large part due to a lack of agility which could have allowed companies to rapidly sense and intelligently respond to any type of disruption. The survey results show it’s no longer a question of whether or why companies should invest in ecosystem integration technology; it’s now a question of how and when. Organizations need to wake up and take immediate action, and ecosystem integration gives them the best choice for where to begin.”
