As a prelude, this blog describes digital transformation and what IT and business leaders should be concerned about when exploring their options for transforming the business. This post assumes a level of familiarity with low-code and the low-code industry; however, if you’re unsure about what exactly low-code is, our earlier blog What is Low-Code? is a great reference.
Low-Code and Transformation
Being in the low-code business, I cringe when early conversations around organizational transformation center on technology rather than the strategic business challenges driving the change. That’s because technology—even one as transformative as low-code—can’t fix every problem. Shocking, I know.
Technology alone can’t fix dysfunctional organizational cultures any more than across-the-board pay raises will. Sure, a new “tool” might temporarily improve certain aspects of the problem, but it won’t fix the underlying problem by itself.
But good news! Most business and IT leaders know by now that when you’re talking about digital transformation, it takes more than technology to make a transformation work. We have an insightful eBook titled Accelerate Digital Transformation With a Low-Code Digital Factory focused on transforming the organization when you’re ready to take that next step. It has some very useful information about setting up your teams and ensuring that the entire enterprise is involved in the effort.
But, for the purpose of this blog, we do want to focus on the actual technology; low-code to be more precise. Although many digital transformation opportunities start with a technology focus on a single application, workflow, or development output, the discussion around integrating a low-code platform into IT should center more strategically on the transformation capabilities it empowers and the business benefits it delivers.
Successfully embracing low-code for empowering transformation requires coupling the technology with an adaptive culture, sound governance, and leadership, all topics we discuss more thoroughly in other posts on our blog. But let’s talk about technology specifically. There’s a lot of ground to cover.
Efficient Optimization Through Leadership Alignment
Business leaders (and line of business leaders) are responsible for, compensated by, and measured on their ability to win, grow, and scale the business regardless of market conditions.
Those market conditions today come from all over:
- New consumer dynamics: the how, why, where, and what around the use of business solutions and products
- Migration from physical to digital: the heart of digital transformation efforts
- Pace of change: both internally (somewhat predictable) and externally (almost entirely unpredictable)
- Competitive threats: disruption from more agile players
In order for business leaders to lead, they demand a certain amount of autonomy. After all, it's their reputation on the line. If they are to be held accountable for identifying, delivering necessary capabilities, and executing a strategy to drive their business objectives with the greatest speed and least amount of risk, they should be allowed the autonomy to make the necessary decisions to accomplish their goals.
IT leaders look at things a bit differently. They too want what is best for the business and they want to be empowered and equipped to innovate with speed. However, they must balance innovation with risk mitigation. It’s a very subtle difference from business leaders:
- Business leaders make decisions based on risks that are not currently impacting the organization. While these risks typically impact the organization more slowly, they are also more unpredictable.
- IT leaders make decisions to mitigate risks that are always on the cusp of impacting the organization. Conversely, while these risks are more predictable, they also impact the organization more quickly, sometimes immediately.
The most effective way for IT leaders to mitigate internal risk is by establishing, or attempting to establish, an enterprise architecture that allows for the following things:
- Integration with disparate systems
- Management of the data lifecycle
- Control of access
- Removal of data silos
- Optimization with the use of, and extending the life of legacy and core systems
But here’s the Catch-22: IT leaders need to control and manage the enterprise architecture as best possible and innovate as necessary while assuring day-to-day operations are maintained. Meanwhile, business leaders—in the interests of good business—use their autonomy to make decisions resulting in new systems acquisition (finance, HR, operations). These decisions can impact IT through licensing costs and tracking, maintenance, and support. Thus, risk increases and dysfunction occurs because the digital demands of the business outpace the ability of IT to support and deliver innovation at the pace necessary.
In the 2018 OutSystems State of Application Development report, we found that about 63 percent of all new applications are basically built for maintenance, and only about 37 percent were for new and innovative purposes.
But even 37 percent sounds like a decent effort until you account for the fact that 60 percent of organizations said it was their legacy systems slowing down development of new applications. How much more effort could be going towards innovation if both business and IT were better aligned on a platform designed for greater efficiencies?
Low-code lets both leadership teams work as best suits them without fear of detriment to the organization. For business leaders, low-code lets organizations test new ideas and push the boundaries of what the business “should” do. Pass, fail, or keep trying decisions can be made quickly based on built-in feedback mechanisms and the ability to iterate on the fly based on needed adjustments.
For IT teams, the business can continue as usual in a bi-modal environment. Thanks to the simplicity of low-code, experienced developers aren’t pulled off their usual projects and duties to test new use-cases for the business, and even the time needed to develop new applications is reduced from months to just weeks.
With low-code, the business gets the autonomy it desires and IT maintains control over the environment. Everybody wins!
Modernizing for Innovation and Stability: The IT “Holy Grail”
Having acknowledged that IT and business leaders have similar but sometimes conflicting goals, we can begin addressing the challenges and work towards a resolution. When the proposed solution involves a hard look at replacing core business systems such as CRM and ERP solutions, the two (simplified) options you have are “build” and “buy.”
OutSystems CEO, Paulo Rosado, has some excellent thoughts in his blog, “Build vs. Buy: It’s a Matter of Plasticity.”
For existing companies, shutting down the business long enough to completely rebuild or install a new core platform, and all of the associated connecting applications, is a non-starter. Whatever happens, it has to happen in tandem with business as usual.
Buying Off the Shelf
If a business exists today, the likelihood that there is a ready-made piece of software you can buy that will allow your business to do what it does, is high. There are few truly unique companies with truly unique underlying operating processes, and so where there’s a market for something, there’s usually a solution (or 10). That doesn’t mean that the software is a perfect fit. Maybe it’s an 80 percent fit. That doesn’t sound too bad right?
Some point-solutions providers will tell you that their product can do everything you need it to do, and more. One of the problems with choosing a “one size fits all” point solution though, is the cost to remove the “bloat”; hiding the tabs you don’t want or need and turning off capabilities you won’t use. By the way, even if you’re not using “Feature X,” most vendors will still charge you for the potential capability one way or another.
There are also concerns about customization. For the other 20 percent of functionality you need to build, can you? Can you do it yourself or will you need to pay the vendor to build it? And what happens in 10 years if you want to back out of it. Will it be an easy exit? Will you even still own your apps and data?
Before buying a point solution, consider the long-term implications: licensing, maintenance, customization, extensibility, and whether or not it perfectly fits the purpose for which it is being bought. A great source for this information is industry analysts. Some even have publicly accessible repositories of customer reviews of vendors and their products.
(Re)Building Your Systems
The other option, building a “purpose-built” solution, has become a much faster, friendlier, and more flexible alternative in recent years thanks to low-code. In fact, in our State of Application Development report, a combined 87 percent of respondents said their top two application development projects for the year involve business applications and systems versus customer-facing applications.
Certainly, you don’t have to use low-code. Likely you already have experienced developers on staff who know your existing systems and its limitations. But, they’re spending the majority of their time keeping the lights on and probably don’t have time to kick off a year-long overhaul of your ERP system.
You could hire more developers, but that’s going to get expensive in a hurry considering you’ll probably need to hire freelancers since they won’t be needed once the project is finished (and they know this and will bill accordingly). Not to mention, they don’t understand your business needs. How long is it going to take to find them, hire them, train them on your existing systems and processes, and then start working on the requirements? Since you’re building this hot, new solution, how do you plan to host it? On-premises? In the cloud? Both? And what’s the plan for the cutover? How will you handle dependency analysis and error checking? Don’t even get me started on security. The list goes on and on into perpetuity.
Building with low-code doesn’t get rid of these problems completely, but it does simplify them. It checks off IT’s boxes around the speed of development, ease of integration, quick prototyping, and reduced feedback and update iterations, while also meeting the business needs around innovation, time to market, and user adoption.
In most cases, the beauty of the developed solution is that, in the interim, it can be layered on top of legacy solutions to refresh the UI, enhance capabilities, and provide a data access bridge between disparate data sources to and from the next-generation solution. Once layered, you can iteratively build-out the required capabilities into the new solution developed using low-code.
Now, before you start thinking, well Vaughn, when all you have is a hammer, everything looks like a nail, just hold on… I’m not saying that you should forget about buying an EHR system, or ERP solution, or other core systems. However, I am saying think hard about your requirements, your people, your adoption and adaptation patterns, as well as your immediate minimum viable need before you buy. A low-code, agile approach may be better suited to winning the time to market race and maximizing value.
Core Systems for New Business Models
Core Systems, by definition, are exactly that: core to your business. They’re invaluable and in many cases, they’re what makes your business more successful than others. When systems limit your ability to adapt to market conditions, for example: when banks began offering mobile banking, what once may have been a beneficial differentiator can become a liability instead.
We talked about rebuilding “in-place” systems above, but what about new business models; core systems that may not exist or have never been built previously. Sometimes the greatest rewards can be found in the simplest maneuvers.
Take Uber, for example. Uber altered the entire paid transportation experience starting at the source of the ride, into the method of hailing it, and ending with the monetary exchange between service user and service provider. At its core, it is a collection of existing functionality fairly common in business. But, a new business model was created to bring all of the needed functionality under one roof. All that was needed was a system to run it; one that existed primarily in the cloud, and front-ended by a mobile application that integrates with massive data sources.
Something as seemingly complex as Uber, when broken down into components, is really not as complex as it appears. The company has taken functionality that includes:
- Data collection and push notifications (sign up process)
- Geolocation and mapping
- And a calculator
And built a multi-billion dollar company. This is an oversimplification of course, but this is the core functionality. The trick was getting it all working together, securing it, complying with oodles of privacy regulations, and—you get the picture.
The point being, this is possible with low-code. Accenture calls these independent functional components Liquid Applications, and this approach to building core systems is the cornerstone of today’s digital architecture that decouples core processes and business capabilities from the monolithic architecture of the past.
In fact, for innovators and entrepreneurs, using a low-code development platform can significantly improve ideation, creation, and time to market on orders of magnitude over traditional development. This is thanks, in large part, to reusable blocks of code (i.e. Liquid Applications) built into the platform that contain the 50–80 percent of application functionality that is commonplace. Instead of re-coding and testing for the compatibility of the same payment functionality used elsewhere, developers can literally drag and drop the visual block of code into the application as they are building it. With all that free time, developers can spend more time on the 20 percent of the code that is unique to the business.
But not everything is as complicated as building the Lotus Temple. New applications can be something as simple, but necessary, as providing an ER Nurse the status of available facilities and supplies. Or a self-service field application for a delivery logistics system that enables a contractor to re-route a driver in order to fit one more drop-off or pick-up into their day.
The ability to leverage low-code to extend the value of information by making it more easily available, yet secure, is critical to delivering better experiences, operating with greater
efficiency, and solidifying the value customers perceive from your business.
Are You Thinking About Low-Code?
Now that you have a good understanding of low-code and some of your options for transforming your business, we invite you to download OutSystems. You’ll be surprised how easy it is to create amazing applications, fast.