Most Businesses Will Be Software-Driven in 3 Years, CA Study Finds

As companies transform into software-driven enterprises, bringing high-quality apps to market faster becomes a critical differentiator, the survey found.

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Most businesses will be software-driven in the next 36 months, according to a recent survey commissioned by CA Technologies.

The global study, "The Battle for Competitive Advantage in the App Economy," shows that 43 percent of those surveyed said becoming a software-driven enterprise is a critical driver of competitive advantage today, rising to 78 percent in three years. Indeed, as companies transform into software-driven enterprises, bringing high-quality applications to market faster becomes one of the most critical differentiators, the survey found.

"It's no longer enough for companies to have superior products or services," Otto Berkes, CA CTO, said in a statement. "Today, success depends upon delivering a superior customer experience. As companies undergo digital transformation, they must focus on the customer experience since it will be a key differentiator in today's application economy."

Moreover, 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 more advanced software strategies, this transformation is having an impact on their time to decision. Forty-five percent of survey respondents claim this today, and 61 percent expect it to be the case in the next three years.

The survey was conducted in March 2015 by Oxford Economics, which polled 200 senior business and IT executives with knowledge of and responsibility for their company's software strategies. The respondents came from the Americas (56 percent), Europe (29 percent) and Asia (15 percent), and included a range of industries, from manufacturing and professional services to retail, consumer products, financial services, energy and health care.

The survey results show that companies are adapting to the application economy at a rapid and accelerating pace and are rethinking competitive advantage and differentiation in the process.
In addition, 47 percent of respondents said becoming a more software-driven business also has a positive impact on market share, 42 percent said it positively impacts the development of new products and services, and 36 percent said it positively impacts financial performance. And these are all trends that respondents said they see accelerating.

Also, more than half of respondents (51 percent) said they have invested in newer forms of software, such as mobile apps and API-enabled software, over the past three years, and nearly as many say they will increase their level of investment over the next three years.

Meanwhile, 54 percent of respondents said they are developing new strategies for customer interactions while 49 percent said they are bringing more software development back in-house. Yet 47 percent of respondents said they have or are planning to use mergers and acquisitions (M&A) to increase app development capabilities, indicating software's strategic role.

Yet, despite the significant transformation of companies into software-driven enterprises, results from this survey indicate that the biggest changes still lie ahead. Based on key insights from the data and interviews with respondents, CA came up with seven rules of engagement that companies should follow as they seek competitive advantage:

--Be ready to break things.

--Squeeze the value out of data.

--Learn to listen.

--Guard data fiercely—and know what you're protecting.

--Bring innovation to collaboration.

--Give the people what they want.

--Remember that culture eats strategy for lunch.

Survey respondents said they are proficient at marketing directly to consumers (59 percent said they are very or highly effective), but only 22 percent said they have all the details—like tracking customer preferences—nailed down. Respondents also said using social media well is critical to interacting with customers and business partners alike. More than 40 percent said it is a must-have skill in the new environment. Social media tools are not just new ways to push information out—they are great ways to capture intelligence as well.

In the area of security, 60 percent of respondents said they are spending more to protect customer data, and even more are doing the same to safeguard internal information. Also, nearly half of respondents said that bringing together security executives with the heads of business units is enabling new business opportunities.

As a rule, in the app economy, customers expect quick, intuitive interaction. They will not accept outages, data loss or downloads that take longer than a few seconds. Instead, they will look for alternatives. However, internally, enterprises see that organizational resistance is a given whenever change occurs. Nearly 40 percent of respondents said the biggest obstacle to becoming more adept at software and application development is a culture that won't support it.