Application economy survival tips

The world today is an application economy. Retail, news, entertainment, banking, education, government, communications - everything is driven by a connected, mobile, application-based world where customers are far more likely to experience brands and interact with enterprises through a software application than a live person.

In order to thrive in this new reality, developing and delivering superior user experiences that engage both customers and staff is now the ultimate priority. And all of it is enabled by software.

Global research commissioned by CA Technologies reveals 94% of line-of-business (LOB) executives are facing increased pressure to release apps more quickly due to customer demand or competitive pressures.

For the survey, 1 425 senior business executives were surveyed in over 13 countries around the globe, including: USA, Canada, Brazil, UK, France, Germany, Italy, Spain, Switzerland, Australia, China, India, and Japan. This first report of a planned five-part series of Industry Insights focuses on how global enterprises are responding to the challenges of the application economy, the business results they are achieving, and how companies can remain competitive in this new reality.

There is no doubt the impact of the application economy is already being felt. Half of all companies surveyed say their industry is being very or highly disrupted, and 44% are already experiencing this impact in their own organisation. It's little wonder then that JPMorgan Chase now has more software developers than Google and more technologists than Microsoft.^1

While the challenges are great - budget constraints and security concerns top the list - enterprises are not sitting back. They are acting quickly to respond to the rapid advances brought on by the accelerating application economy.

For organisations that can execute these strategies effectively, the payoffs are substantial. The CA survey uncovers "leaders" in the application economy, which are significantly outperforming "laggards", with:

More than double the revenue growth

* Sixty-eight percent higher profit growth; and
* Fifty percent more business coming from new products and services.

The report reveals what strategies need to be put in place in order to guarantee success in the application economy.

Subsequent reports will explore the issues surrounding enterprise adoption of the core technologies and practices needed, including: DevOps for rapid application development, enterprise mobility, security and new approaches to service management and delivery.

One of the first questions respondents were asked was to assess the extent to which their company and industry is being disrupted by the application economy. Half of all respondents reported their industry is being very or highly disrupted.

The impact of the application economy is clearly being felt more intensely by top management, with far more "C-Suite" (CEO, CIO, CMO, CFO, etc) respondents reporting that both their industry and company are being very or extremely impacted than other respondents.

This is not a complete surprise, since the disruptions brought on by the application economy are likely to affect organisations in fundamental ways, and top management is ultimately responsible for the strategic direction of their company and guiding it down the new path.

LOB executives in particular are feeling the pressure. These execs were asked if they are seeing a pattern of increasing pressure to launch new applications or services faster than before. An overwhelming 94% said "yes" - either due to customer demand (60%), competitive actions (60%) or revenue shortfalls (19%).

Increasingly, customers and constituents prefer to access products, services and support via applications rather than through people on the phone or at brick-and-mortar locations. Customers are demanding it, and competitors are responding. As a result, 51% of the respondents in the CA survey have released four or more external customer applications in the past year, and 56% have released four or more internal applications as well.

To a large extent, enterprises today are in the software business. Automotive companies are more likely to tout applications and connections than styling and horsepower, with some now updating key car features through overnight downloads.

Software job growth has exploded over the last five years in sectors such as retail (98%), financial services (72%) and healthcare (40%).^2 This has profound implications for the business community, which needs to invest appropriately and learn how to acquire, motivate and retain tech talent. This is not an easy task!

The impact of the application economy is clearly being felt more intensely by top management.

The next Industry Insight takes a look at how well enterprises think they are doing in responding to the application economy and some of the obstacles they are struggling to overcome.

Enterprises are split in their assessment of their ability to respond to the challenges of the application economy. Fifty percent report their organisations are very/extremely effective, and the other 50% report they are only moderately, slightly, or not at all effective.

With half of all organisations admitting they are not that effective at responding to the application economy, in my next Industry Insight, I will examine why it is worth looking at the major obstacles or challenges to success in the application economy.

^1Anish Bhimani at http://www.ini.cmu.edu/news/2013/05/speaker_bhimani.html
^2Burning Glass Technology at http://www.burning-glass.com/research/software-is-everywhere/

The survey: This global study was conducted online by UK-based Vanson Bourne in July-August 2014, with 1 425 senior IT and line-of-business executives at enterprise organisations with revenue of at least $500 million. The survey was conducted across five industry verticals of financial services, healthcare, retail, telecommunications and media/entertainment in the following 13 countries: US, Canada, Brazil, UK, France, Germany, Italy, Switzerland, Spain, Australia, China, India and Japan. For further information, log on to www.ca.com/za.