Demystifying rules of engagement for an application economy

MUMBAI, INDIA: Speed, time-to-market and time-to-decision are among the most critical competitive differentiators to compete and win in the application economy

The results of a global study–The Battle for Competitive Advantage in the App Economy–commissioned by CA Technologies reveal the need for speed in the application economy.

Conducted by Oxford Economics, the study surveyed senior business and technology executives around the globe about application strategy and its impact on business outcomes.

Key trends:
Forty three percent of those surveyed believe that becoming a software-driven enterprise is a critical driver of competitive advantage today, rising to 78 percent in three years.

Increased agility and faster time to market top the list of competitive strategies for companies in the application economy; and, according to respondents who have already begun adopting advanced software strategies, this transformation is having significant impact on their time to decision: 45 percent claim this today, and 61 percent expect it to be the case in the next three years.

Becoming a software-driven business also has positive impact on market share (47 percent), the development of new products and services (42 percent), and financial performance (36 percent)—all trends that respondents see accelerating.

Key findings:
•    More than half of respondents (51 percent) say they have invested in newer forms of software (mobile apps, API-enabled software, etc.) over the past three years, and nearly as many say they will increase their level of investment over the next three years.

•    54 percent are developing new strategies for customer interactions.

•    49 percent of respondents are bringing more software development back in-house and 47 percent have or are planning to use M&A to increase app development capabilities, indicating software’s strategic role.

Despite significant transformation of companies into software-driven enterprises, the survey results indicate that the biggest changes are yet to come. Based on key insights, we present key points that represent rules of engagement that enterprises should follow for competitive advantage.

Rules of engagement for competitive advantage:
1.      Be ready to bend rules: When organizational change is inevitable, rules may get bent. Nearly half of respondents believe that becoming a more software-driven business has had an impact on time-to-decision, and another 37 percent say that internal operations have been deeply affected.

2.      Squeeze the value out of data: Respondents say they are proficient at marketing directly to consumers; 59 percent say they are very or highly effective, but few only 22 percent have all the details—like tracking customer preferences—nailed down.

3.      Learn to listen: Using social media well is critical to interacting with customers and business partners alike. More than 40 percent of respondents say it is a must-have skill in the new environment. One key thing to remember is that these tools are not just new ways to push information out—they are great ways to capture intelligence as well.

4.      Guard data fiercely and know what you are protecting: Protecting customer data is a fundamental rule of engagement, and companies are investing in bigger budgets and new tools to get the job done. Sixty percent of respondents say they are spending more to protect customer data, and even more are doing the same to safeguard internal information.

5.      Bring innovation to collaboration: Old barriers do not apply in the application economy. Nearly half of respondents say that bringing together security executives with the heads of business units is enabling new business opportunities.

6.      Give people what they want:  In the app economy, customers expect quick, intuitive interaction. They will not countenance outages, data loss, or downloads that take longer than a few seconds. With an enormous increase in revenue driven by customer interactions with apps expected in three years, getting this right is an existential necessity.

7.      Remember that culture eats strategy for lunch:  Organizational resistance is a given whenever change occurs. Nearly 40 percent of respondents say the biggest obstacle to becoming more adept at software and application development is a culture that won’t support it.

“Earlier, demand outstripped supply and customer expectations were low. However, with digitization, organizations delivering superior customer experience are experiencing better success, as compared to their competitors. Indian organizations need to focus on improving customer experience as it will be a key differentiator in today's application economy,” said Sunil Manglore, MD, CA Technologies, India.