Jasper Kloost, Thinkwise CTO claims that many CIOs are not aware of the possibility to replace core systems in a controlled manner.
Proliferation of peripheral applications slows down innovation
Companies are seldom satisfied with their business software, irrespective of whether it concerns a standard package or a customized application. This is why they often use all kinds of peripheral applications. You might even say that the number of peripheral applications is inversely proportional to the level of satisfaction. However, all these individual applications only offer some temporary relief. In the long term they only slow down innovation.
Victor Klaren, co-founder and CVO at Thinkwise
Most organizations seek to manage their core activities as far as possible from one single central application. They opt for a well-known ERP or CRM package, which they then try to modify as much possible to meet their requirements. After the implementation, they then need to find out the extent to which the application supports and matches the organization’s processes. In many cases, it turns out that employees have to adapt their work to the new software.
And furthermore that further modifications or additions to the system are difficult to achieve. As a solution people resort to all kinds of intermediate solutions, such as Excel spreadsheets, Access applications and web dashboards, and this is mostly not initiated or done by the IT department but by the business itself. I have seen companies that had no less than 700 peripheral applications in addition to their SAP environment. Does this sound familiar? If so, then it is high time to have a look at how to improve this situation.
Business versus IT
I don’t want to claim that connecting applications is a bad thing. For instance, in our API-centric world it is perfectly acceptable to connect a payroll system or financial application to your ERP package. But as soon as you connect more and more peripheral applications to the software package that your core business is running on, then this is an indication that the software does not fundamentally meet your requirements. You may achieve a workable situation, but all those individual applications lead to extensive complexity and maintenance. As an organization you build, under the guise of innovation, a house of cards that is so complex that it is constantly on the verge of collapse.
If you really want to keep up with the latest technological developments and you want to continuously change and optimize your processes, then you need radically new business software. More and more companies are currently becoming aware that low-code business software could be a solution to this problem. Unfortunately, most platforms are only suitable for the development of front-end applications to extract data from existing ERP software. But this creates even more peripheral applications. Nevertheless, I believe that low-code software can indeed help companies to significantly simplify their complex landscape of peripheral applications and IT processes, provided the platform can replace the traditional systems of record (that constitute the basis of your business). You can then install a much more flexible development layer with which you can basically replace the entire software ecosystem. Moreover, it opens up new possibilities for continuous innovation and process optimization.
Building for the future
Selecting the right business software is not that easy. Are you going to opt for an expensive customized solution, or are you going to modify your standard package to your own specific requirements? And what will you do if the business needs new functionality or wants to change a process? Are you going to redevelop your customizations or implement something new again? Installing all kinds of peripheral applications does not appear to be a sustainable solution, as it only results in more complexity. Standard software packages are simply insufficiently equipped to adapt to the changes within an organization. To give another example: a large international Dutch company decided to implement SAP, in order to finally get rid of all the internal Excel applications. It worked, but after only ten years all the spreadsheets were back in use. Over the years, it turned out that the software was insufficiently modernized to meet the changing business requirements of the organization.
It is definitely a good idea for a company to aim for just one central application for its core business, but this means that this software has to be flexible and future proof. In other words: as a company, you do not want to be forced into a straitjacket of periodically having to implement new versions of the software. Low-code software that can replace the systems of record, seems to be the perfect solution for this problem. It offers the possibility to model all the business processes, including all the applications, in a platform and the software is subsequently derived from this. You can then easily make modifications in the platform, including new processes and application interfaces and the software automatically adjusts itself. In a low-code platform, software is no longer an inhibiting factor in terms of innovation, but actually operates more like an accelerator.