According to analyst reports (sources at the end of the blog post), manufacturing organizations spend an average of 19% of their IT budgets on integration. Given that the estimated total IT budget for the manufacturing industry in Sweden for 2019 was 24,6 billion SEK, that is a significant amount of money (4,674 billion SEK).
A further break-down of the integration spend shows that 8% is spent on maintenance activities (run & changes), 3% is spent on integration development and 8% is spent on deploy/run (HW, SW & infrastructure).
The average organisation spend 75% of developer capacity on maintenance activities, with the remaining 25% spent on development.
With a platform like the MuleSoft Anypoint Platform it is estimated that API/Integration development can be reduced with up to 64% per integration (based on customer surveys and input).
Given the further break-down of integration costs showing that 3% (out of the 19%) is spent on development, that constitutes a value of 738 million SEK a year for the manufacturing industry as a whole.
With an estimation that using the MuleSoft Anypoint Platform and an API led approach to decrease development times with 64%, that would be equal to 472 million SEK a year for the industry in total.
Enable new innovation
Quite a substantial amount of money that can potentially be invested in new innovation or simply added to the cost savings account. This value does not cover potential material earnings or benefits, e g decreased time to market, improved business agility or improved integration/API control. It is also important to notice that these numbers does not include potential earnings or efficiency inceases in maintenance or deploy & run activities.
With a modern platform, like the Anypoint Platform, that includes tooling for deploy, monitoring and cloud management, it feels safe to assume that the savings calculated for development would be matched by those expected for maintenance/deploy & run.
That means that there is a potential to double the total estimated savings for development when adding these as well. That also doubles the estimated budget made available for innovation and cost savings and brings us close to 1 billion SEK a year in total for the whole of the manufacturing industry in Sweden.
How is that for motivation to look into a new approach to connectivity and a platform to support you?
More to read
This blog post has been published by Redpill Linpro in cooperation with MuleSoft. Numbers above are based on estimations paired with information from publicly available sources. Details for a specific organisation will have to be taken into consideration before applying these estimates on a real life case. You should therefore consider these as just indicative numbers.
Read more on the topic of solving the connectivity issues for manufacturing companies on the following links:
Sources: Deloitte, Forrester, and Gartner research data. MuleSoft customer benchmarks. Radar branschrapport tillverkande industri 2019)