How organizations are maximizing their return on their digital investments

THE GROWTH OF LOW-CODE/NO-CODE TECHNOLOGIES IN THE ENTERPRISE

White Paper: Technology

We enable organizations to identify and executedecisions backed by quantifiable and statistical methods.

The fact that a company of this size can use low-code /no-code technologies to meet their needs demonstrates how much these capabilities have improved and that information technology professionals need to take them more seriously.

I recently had a conversation with a former colleague about a massive application development program he was leading for a large US-based multi-national bank. The project was implementing a commercial lending platform to automate a significant portion of the underwriting process for a very high-volume business.

What interested me the most was the fact that they had chosen to use a low-code technology platform to build the system that would ultimately have over 10,000 users. I asked him how they were moving from the requirements and design process, through to development and then into production. He said they were transitioning from individual developer sandbox environments to intermediate test environments and then into production without any performance engineering or other activity to meet the expectations of the business. The fact that a company of this size can use low-code/no-code technologies to meet their needs demonstrates how much these capabilities have improved and that information technology professionals need to take them more seriously.

2

Visual development tools have existed for many years, and they have often touted their impact on developer productivity. By allowing developers to interact with visual objects and elements, the application can come together in a much faster time frame, and the business users can provide feedback much sooner, resulting in a higher quality product. In traditional development environments, developers and their business partners expend significant time and energy on the back-and-forth interaction to clarify and translate business requirements.

Various techniques have been deployed to make this process better, including prototyping and agile/scrum. Still, they don't address the core issue of translating user needs into a working system quickly with as little rework as possible. Many independent studies have validated that low-code development platforms allow for a much faster development process, and many IT departments have leveraged low-code tools for workgroup applications and prototyping.

In my experience, low-code and visual development tools always had specific applicability to enterprise applications. The overhead from the frameworks was often too much, severely limiting the performance of the application. Or the user interface capabilities were too limiting, restricting the richness of the functionality. Some later generations of tools addressed these issues but still had challenges because the levels of abstraction between the development interface and the underlying technology made it difficult for performance, security, and infrastructure engineers to understand and manage.

3

TheTides are Changing

IT departments believe they were giving up too much control over the end-to-end experience of their business users. However, from what I’ve seen personally and anecdotally, is that most of these issues have been resolved as the sophistication of the technology has increased. It is the convergence of these low-code/no-code tools with elastic cloud-based infrastructure that has made these tools more useful and applicable to a higher percentage of a company’s technology requirements.

4

Lack of Engineering Talent, and Increase In Digital Demand from Organizations Will Increase Demand for No-Code & Low-Code Business Application Platforms

Businesses care about applications that meet their customer's needs and run their business. The tremendous increase in digital capabilities deployed in the marketplace has created demands on companies to be more responsive.

Many industries are seeing a two-pronged digital attack on their businesses:

§ well-funded legacy competitors who are making massive investments in digital technologies to reduce their costs materially; and,

§ disruptive upstarts that are not burdened by legacy infrastructures and can focus on improving the client experience and the core value equation.

Multiple academic studies and industry surveys have shown that most organizations spend over half of their information technology budgets on the maintenance of legacy applications, starving out available investment capital for innovation. Also, the long development times associated with traditional full-stack development technologies and the complexity of integrating with legacy environments cause the gap between business needs and technology organization's ability to satisfy the demand to increase continually. Many companies have reported an increase in their unmet technology backlog every year for the past several years.

The response that many companies have executed to meet the demands for digital capabilities has been to invest in more engineering talent and to increase their overall technology delivery capabilities. Companies are attempting to mirror the big technology firms in their organizational structure and technology capabilities. Some large multi-national banks have boasted that they have more engineers than many technology companies.

The challenge with this approach is that engineering talent is increasingly difficult to source and to maintain as more and more companies adopt this approach. Industry surveys have suggested that most companies are directing most of their capital investments toward acquiring digital capabilities. With virtually everyone following the same path and trying to obtain the same talent, it is highly unlikely that most are going to be successful.

The vast majority of companies in all industries do not have enough available investment capital to use engineering capability as a competitive differentiator.

5

The investment by the top technology providers dwarfs the investment that non-tech companies can make, and the gap is getting larger as these companies grow at rates that are often double other industries. It is incumbent on IT departments and their business partners to define a technology architecture that integrates different providers' capabilities to meet the needs of the business.

This target architecture is going to combine the various cloud-based patterns, SaaS, IaaS, and PaaS, to maximize the value delivered from technology. Using one or more low-code development platforms in that architecture provides a highly productive capability that can be more responsive to the demands of the business. It is these very selective investments in digital capabilities that positively impact the customer and associate experience that provide a meaningful return.

6

Get to Market Sooner, Cheaper While Consolidating Legacy Applications (Without the Usual Integration Hassle)

The disruption caused by digital technologies in most industries has created a need for IT departments to deliver applications to the business faster. Disruptive startups that don’t have legacy infrastructures can focus all their development time building and deploying capabilities that improve the customer’s experience. Many companies are finding that significant portions of their most profitable customers are moving a part of their business to new entrants.

The average time to implement a new application for most organizations is over five months, and many large platform investment programs take more than a year. These long lead-times drive frustration into the business and causes an increase in Shadow IT – which is when the business uses its resources and available tools to implement technology solutions. Shadow IT creates a material risk to the company as these applications are unlikely to meet the security and availability requirements of most industries and regulators.

The primary drivers of long application development times are legacy systems integration requirements, changing and unclear business requirements, and testing. Low-code platforms can help IT departments increase the speed of their application development programs in multiple ways, including:

7

§ The consolidation/elimination of many legacy apps onto the low-code platform eliminates integration requirements,

§ Visual development capabilities allow the business to see the end-product sooner, reducing the need for rework and requirements changes.

§ Multi-channel functional delivery, allowing for functionality to be developed once and deployed across multiple platforms, in-house, web, and mobile,

§ Integration with cloud-based services like Google Cloud's AI platform significantly reduces the cost and increases the speed of adding these capabilities to applications.

8

§ Low-code platforms allow the IT department to create a way for the business to meet some of their requirements in a structured and controlled environment, eliminating the need for Shadow IT,

§ Low-code platforms allow functionality to be easily moved from development to production, significantly reducing the burden of creating and managing test environments.

Low-Code Solutions Drive Meaningful Transformation

Several global institutions have used low-code platforms to deliver strategic applications for both internal associate-facing and external client-facing. Rabobank, a global bank based in the Netherlands, used Mendix, a low-code platform owned by Siemens, to deliver its online-only banking solution called RaboDirect. The bank believes that by using a low-code platform, they were able to reduce their IT costs by 50% and deliver a truly differentiated customer experience. Santander, one of the Eurozone’s largest banks, used the low-code platform from Outsystems as the basis for the digital transformation of their Portuguese consumer banking business. By effectively leveraging low-code capabilities, they were able to replace 70% of their core systems while significantly improving their client experience with a mobile-first solution. These are just a few examples that show that low-code technology is not just for inward-facing or workgroup automation projects; they can be used to drive meaningful transformation.

9

The Low-Code/No-Code Universe is Diverse & Expanding

Billions of dollars of venture capital have been invested in the low-code/no-code platform over the past several years as well as the dominant technology platform providers that have also invested billions and made several acquisitions. The market ranges from providers that are focused on business users, citizen developers that use these platforms to satisfy their functional needs to platforms that focus on professional developers that use these platforms to create visually rich and highly functional web and mobile apps. Most companies will end up with as many four different low-code/no-code platforms in their technology portfolio.

The challenge for CIOs and IT executives is to define the best approach to delivering the applications that their business partners need to help the business grow and succeed. Most IT organizations have already made significant investments in modernizing their technology delivery capabilities to take advantage of agile development methodologies, cloud infrastructure, and DevOps to increase their pace and throughput.

While these investments have made improvements, the demands that the business is placing on IT is only going to increase as digital transformation continues to dominate the strategies of virtually all industries. The tremendous advancement of cloud infrastructures and low-code/no-code development tools have massively increased the percentage of business functionality that they can support. IT departments are going to have no choice but to seriously consider these platforms as a significant component of their application delivery strategy.