18/06/2015

By Denis Dorval, VP EMEA, Apigee


Technology continues to revolutionise all aspects of our lives. From the way we communicate to the way we make financial transactions, from how we watch TV to the way we shop — there isn’t a single industry which isn’t being shaken up by the growth of digital products and services.

As a result, businesses are experiencing a fundamental shift in customer expectations. It’s never been more important for organisations across all industries to innovate — not only to be successful but to remain competitive.

According to the Apigee 2015 UK Digital Business Snapshot report, executives in travel and tourism, banking and financial services, retail, and telecommunications appear cognizant of both digital opportunities and threats. A strong majority (76%) aim to create a more connected digital experience in 2015, with a similar proportion (75%) prioritising delivery of more products or services via mobile devices.

Nearly a third (31%) expect “very significant” digital disruption in 2015, and at more than eight out of 10 respondent’s firms (86%), there is a company-wide digital transformation initiative. However, while this report documents that UK business leaders believe that digital matters to their industry, it also illuminates a risk of moving too slowly and focusing just on building apps.

Competitiveness requires more than “an app for that”

Mobile penetration continues to grow exponentially, with Informa recording 5.2B mobile phone users globally in 2014 - that’s 73% population penetration. And according to the Interactive Media in Retail Group (IMRG) and Capgemini, 40% of UK online retail sales from November 2014 through January 2015 were completed through tablets and smartphones. As a result, the majority of us now expect key functions from banks, department stores, supermarkets, and restaurants to be available via apps.

In this market environment and in our mobile-centric world, we believe that mastering apps is a requirement for meeting the demands of customers, partners, and employees. A majority of executives surveyed in the report appear to agree, with 71% reporting that their company deployed mobile apps in 2014. Having a rich, connected digital experience is no longer an added extra that businesses can offer, it has become a necessity.

But apps on their own are not enough to harness the full potential of digital. While mobile apps may be a favoured interaction channel, other digital capabilities play an essential role in creating a compelling digital experience. Here we see a notable divide in the extent to which companies are making the most of digital opportunities.

For some, being digital means capturing, analysing, and distributing data to create a truly personalised experience. Matthew Newton, Enterprise Architect at GLH Hotels, emphasises that “the need to provide customers with a personalised experience over the commodity purchase” was the main driver behind the company’s digital transformation. “It’s all experience-led and getting into people’s minds about what they want to do and how they want to feel about something, then identifying the product to make that happen. For us, being a digital business means offering more personalisation in our offers for our customers and the flexibility to access the right data to make this happen.”

Sienne Veit, Director, Online Product at John Lewis, emphasises the need for businesses to think beyond the web. “Nowadays, not having an app would be like not having a website a few years ago — it is now a business essential. But it’s not just about having an app in the store, it’s about making sure this digital offering is aligned with all parts of the business.”

In their case, she explains, “it’s essential that our digital offering is closely intertwined with the physical in-store experience. Our digital services need to allow for a fluid end-to-end journey. For example, because we sell considered, expensive items, a customer is likely to first look online, then go and look at the item in store, then head back online to order it. There cannot be any disconnect between any of these stages, which is why we need to provide great flexibility in our apps.”

In many cases, APIs can create a step-function increase in the ability to exchange data between a company’s own back-end systems, third-party sources (e.g., contextual weather information based on the location of an app user or a destination hotel property), and other apps (e.g., Facebook). Analytics can enable real-time processing of data in order to predict the “next best step” for an app user based on both their digital history and their immediate context.

In light of these digital opportunities, only 6% of respondents said they haven’t seen any positive returns across revenue, efficiency, market share, or the pace of innovation from digital investments.
But the difference in the impact of digital on the bottom line between the “app-only” companies and those that also implemented APIs and incorporated data analytics is stark.

Companies that implemented three digital capabilities in 2014–apps, APIs, and analytics– are eight times more likely to report increased revenue than those who delivered apps alone. According to our report, the median reported increase in revenue from successful digital initiatives across all respondents is £487,000, but among the latter group the median rises to £9,000,000.

Consumers are interacting with brands in different ways (both online and offline) and doing so on multiple devices. It’s vital that this customer journey is made as fluid as possible, whilst also ensuring that these interactions provide the data which help businesses to understand more about their customers and deliver real value.

There is little doubt about the digital agenda

As the results of this research show, the majority of UK businesses are in agreement that digital transformation is now a business essential and is key to providing the most flexible and valuable customer experience possible. Data is at the heart of developing a digital business, and those who took action on apps, APIs and analytics in 2014 are not only reaping greater top line benefits than those who did not, but are also seeing stronger ability to innovate more quickly.

All (100%) of those who deployed apps, implemented APIs, and incorporated data analytics into products and services in 2014 consider creating a more connected digital experience for customers, partners, and employees a priority for 2015. Rather than sitting on their laurels, they are looking at leveraging their digital capabilities to develop new sources of revenue or enter new markets in 2015.

This suggests that for those who have not already made APIs and analytics a core competency alongside apps, 2014’s pace may be a recipe for falling behind rather than staying competitive. We believe that the time is now for executives at every enterprise that understands that “digital matters” to ensure that apps, APIs and analytics are all essential and complementary assets in the digital toolbox.

To take a look at all the findings from the report, visit https://pages.apigee.com/2015-UK-digital-business-report.html