John Rymer has been doing research into middleware and application development for more than 25 years. I myself have also been active in the software...
3 types of core applications: when should you use low-code?
Research carried out by the independent research agency Forrester indicates that it is possible to use certain low-code platforms to develop and implement core business applications. However, these applications are not all the same. When selecting a low-code platform you have to ask yourself which of the three types of core applications you want to build.
An organization’s core applications regulate the primary business processes. They are often purchased as standard packaged software or in some cases developed as a custom solution. But, times have changed. Low-code development is now well on its way to dethroning these traditional software categories. In its report ‘When And How To Modernize Core Applications Using Low-Code Platforms’, Forrester describes that currently 15 percent of Application Development & Delivery Professionals already use low-code platforms to develop new core business applications, including ERP software. A quarter of the professionals who use low-code deliver large-scale applications for the entire organization.
3 types of core systems
At large, well-established organizations the core systems represent many years of investment. Modernizing these often outdated systems is no mean feat. AD&D professionals have to provide sound evidence that a low-code solution is actually suitable to replace one or more of their core systems.
Currently, there are only a few low-code platforms that are suitable for modernizing business-critical core applications. And the question still remains, which type of core applications do you want to modernize with low-code. Does it concern your systems of record, shared services, or the core operational processes? We will examine these three categories, so that you can correctly determine which low-code platform is suitable for your organization’s core applications.
- Systems of record
These core systems form the data foundation of the organization. They comprise database and transaction technology, process all data and guarantee its integrity. In addition, they include the business logic and processes that ensure that financial, employee, stock, customer, vendor, and similar types of data are kept up to date in a consistent manner.
- Shared services
These applications facilitate the primary business processes, such as invoicing, pricing, payments, onboarding and planning, and IT functions such as asset management and security. Shared services are usually incorporated into larger business processes. For example, a planning application is crucial for managing the logistic activities.
- Operational core processes
These applications automate an organization’s most important processes, which are the activities that constitute the primary purpose of the company. Consider, for instance, the financial core processes of a bank, the logistic processes of a transport company or the webshop of an online retailer.
The Forrester research shows that low-code is mostly deployed for shared services or operational core processes or both, where the speed and flexibility of low-code provides the greatest benefits, for instance for the optimization of a business process or application. This contrasts with the systems of record, that require less dynamism.
While these low-code applications can integrate with the systems of record, they do not replace them. However, some low-code platforms, including the Thinkwise Platform, are able to replace the systems of record, even though this is less common in practice for various reasons. The Forrester report examines the reasons for this in more detail.
Benefits of low-code for core applications
From the case studies that Forrester investigated for its report, one third did indeed rebuild their entire core with low-code, including the systems of record. According to the analysts rebuilding your entire core application landscape with the help of a low-code development platform can be a smarter (and easier) solution in the long term.
One of the major reasons for this is that you can save considerably on software license fees, certainly when compared with large ERP suites, where you often pay extra for each module or additional functionality. It also simplifies integration, because every core application is built within the same platform. This accelerates future innovations, certainly when they require core data.
Furthermore, a development team can work far more effectively when all core applications are built with one low-code platform, which greatly reduces the number of peripheral applications. And far fewer technical skills are required for maintenance and integration.
But the most important reason to completely replace a core-application landscape with low-code is the inevitability that your systems of record will have to be replaced at some time in the future. If you do not do this, then sooner or later problems will arise. For example, because the system reaches its end-of-life or if structural changes are necessary, which can no longer be carried out.
So be proactive, like the Dutch company Coffee Fresh, which is mentioned in the research. This company had a ‘working’ ERP system, but decided to anticipate market developments and rebuild its CRM system with the Thinkwise Platform. They expanded this with the complex field-service modules and finally the company used all its acquired knowledge of low-code to rebuild the remainder of the ERP system. A wonderful example of a company that has made its core systems future-proof with low-code! And this example is not an isolated case, more than 80 percent of all Thinkwise users deploy the platform for these kinds of applications.