Code no more: transforming digital transformation

For years, we have observed, or heard or read about, case after case, the total or partial failure of governmental or private information technology (IT) projects, underutilized software packages, or idle app modules. The result of these adversities is effort, time and money wasted, which translates as “losses in productivity or competitive advantage” in economic terms. In the last four decades, there has been much discussion on the unfulfilled promises of IT. Today, the debate continues with software, the capital of IT’s promised land, in the middle of the digital transformation frenzy. Even writing code is under scrutiny.

The Solow Productivity Paradox

Robert Solow once said, “You can see the computer age everywhere but in the productivity statistics.” The Solow Productivity Paradox back in the 1980s referred to the unmet expectations of IT to make individuals, companies and eventually the entire economies of countries more efficient.  

Many reasons have been cited for this failure: the relatively low number of IT tools available worldwide at that moment, problems in measuring productivity and output, the natural lag between the introduction of a new technology and its reflection in productivity statistics, difficulties of training users and adapting processes for the efficient utilization of these tools… The list is long.

A promise made is a debt unpaid  

Solow’s comments were followed by a series of political, economic and technological developments that contributed to the surge in productivity that finally started to show up in the statistics in the 1990s.

Easy-to-use programs for the personal computers and lower prices of the IT tools helped developing nations, small and medium-sized enterprises (SMEs) and individuals digitize their data. The diffusion of the internet, the invention of the web and the browser, the disintegration of the Soviet Union, the liberalization of the economies of India and Latin America, and the employment of fiber optic cables facilitated communication. Individuals and companies that were already digitizing their data started to share it with others.

Corporations of the developed world began to collaborate with their counterparts in emerging economies, creating the supply chain business. Enterprise application software (EAS) firms surged all over the world to satisfy the increasing IT demands of businesses, which could not cope internally with their system needs in this new environment.

Then China became a member of the World Trade Organization. Within a decade, the number of people that could theoretically trade together practically doubled from approximately three to six billion. Many of the telecom companies that did the dirty work of laying the fiber optic cables went bankrupt after the .com bust at the turn of the millennium, paving the way for the collapse of the prices of communication. Thus, theory became practice, and the world really started to get connected. India, awash with English-speaking engineers and low wages, was now king, as outsourcing became easier and cheaper. The 2000s witnessed the surge of the cloud, the open-source movement, mobility, and social networks, connecting the globe even further.

IT does not matter     

Two decades after Solow, in another famous claim, Nicholas Carr wrote “IT does not matter,” especially regarding business strategy. IT, though still essential to competitiveness at the regional and industrial level, was no longer a source of advantage for its users at the firm level, according to Carr. It was becoming a mere commodity. IT did not enable firms to distinguish themselves from competitors in a meaningful way.

Carr used the analogy of railroads and electricity: There are opportunities for visionary companies to create competitive advantages for themselves, as technologies are being built into the commercial infrastructure. However, as their availability increases and their cost decreases, although they become more essential than ever, they turn into commodities.

Carr’s opponents, however, reminded us that there was more innovation to occur and new technologies were emerging or maturing constantly. More importantly, they said, it was about what you accomplished with the information that you had access to, by adopting these technologies. Processes, skills and execution marked the real difference.  

The world is flat

Shortly after Carr declared IT a commodity, Thomas Friedman announced that the world was “flat,” meaning that we were all connected and empowered. Of course, Friedman knew that the world was still more round in that sense, but his suggestion was that the foundations were being laid for it to become flat eventually. There were still wide technological gaps between developed and developing nations, and even within different regions and socioeconomic classes of a country.

Today, mobile phone penetration rates approach 100% even in developing countries. Broadband or smartphone ownership ratios are rapidly rising. IT tools and services are growing wiser with machine learning and big data. Autonomous vehicles are already on some streets, as part of pilot projects.

But we are still far from flat, and far from smart. Industrial leviathans are progressively replaced by technology companies in the “top five” and “top ten” market capitalization lists. The former cannot find their path to prosperity, in the middle of their internal jungles of software applications. Some packaged, others produced inhouse, IT solutions have not necessarily helped the plethora of corporations gain insight or foresight, and their sectors are being usurped by technology firms. The latter, the new giants such as Amazon and Google, are getting smarter and smarter, while they disrupt entire industries.

So, is the world flat? No, it is not. But the playing field is leveled for the ones that will be nimble enough to leverage the right instruments that are available out there and to avoid the obsolete.    

The new villain on the block   

More than three decades after Solow’s remarks, and 15 years into Carr’s, the debate continues with software, the new villain being the very code itself. No one escapes rebuke: legacy software systems; on-premise enterprise resource planning (ERP) firms; cloud-based software-as-a-service (SaaS) providers; inhouse IT teams of corporations; systems integrators; consulting firms… Even some of the rapid-application development platforms that have been in the market for a while suffer justified blows.   

Let’s start with the usual suspects. Large and complex EAS tools, which cost companies a fortune, usually fall short of, or in some cases fail altogether in delivering, their promises to provide productivity or competitive advantages. Some firms have been reported to have suffered severe financial setbacks in the past trying to implement on-premise legacy software, after wasting years of colossal implementation efforts and millions of dollars. These solutions are often bulky, sluggish, and difficult to modify or replace once in place.

Some of the legacy providers have made a comeback with their own cloud-based solutions. Nonetheless, overcautious enterprise managers awaiting their annual bonuses and nearing promotions will find it increasingly difficult to “just choose a renowned vendor” regardless of price, time or opportunity cost.  

Cloud-based producers, with pay-as-you-go, as-a-service and on-demand models, have alleviated some of the pain of the users, who no longer need to pay upfront sums to purchase software licenses thanks to these new payment models. This system also eases the burden of purchasing servers, as companies can choose “public clouds” where they just pay a monthly fee at a fraction of what they used to spend on inhouse hosting, and utilize any amount of computing power they may necessitate. Exceeding capacity is no longer a problem.

So, what is the problem? Cloud-based or not, these vendors do not provide ease of implementation, personalization, compatibility, or freedom, which are all traits that are required in an era of speed, agility and urgent digital transformation needs. They render change management or mending mistakes virtually impossible.

Salesforce.com, a cloud-based customer relationship management (CRM) software vendor, is an example. It debuted almost two decades ago, accusing the on-premise providers of being bulky, inflexible, expensive, and difficult to implement and use. Its slogan and logo “no software” implied an ease of implementation and adoption. But now, new-generation CRM publishers charge Salesforce.com with being too complex and hard to use. No-code platform developers even go further and blame Force.com, Salesforce.com’s own app platform, for its “vendor lock-in.”   

Low-code or no-code?

While legacy producers are trying to play catchup with the cloud-based challengers, many already large unicorns themselves, and the newcomers, today the whole essence of software is being questioned: Should we be writing code at all?  

The recent “low-code” or “no-code” approach, which comprises platforms that are used to develop software applications without the necessity to write code or with less code than usual, addresses crucial pain points: It eliminates much of the repetitive work, solves compatibility issues for numerous devices and systems, and facilitates the continuous adoption of new technologies. Thus, it releases the scarce and intelligent human resources to concentrate on higher value-added programming or other IT tasks.

The nomenclature of this trend appears just as congested as a typical enterprise system that has a legion of disparate software programs. Low-code, no-code, rapid-application development platform, enterprise high-productivity application platform-as-a-service (hpaPaaS), are among the many names used by different organizations and experts. Research firms such as Forrester and Gartner have started to cover this relatively young software segment recently, baptizing it “low-code development platforms” and hpaPaaS, respectively. We will refer to this new approach as “low-code” for convenience and ease of use.

For more seasoned IT people, software producing platforms are not novelties. For decades, there have been akinand largely unfulfilledpromises of ease of development such as computer-aided software engineering or business process management. Some people regard them as “low-code,” though advocates of new-generation “low-code” object to this perception and emphasize the differences. The recent improvements in technologies and methods, and the current urgency of enterprises for speed and agility, make the time ripe and the technology mature enough to be exploited efficiently by enterprises. This time, low-code is here to stay.  

Some separate the “low-code” segment, deemed to be for the IT people, and the “no-code” sector, envisaged as being catered to business users that are also referred to as “citizen developers.” The former write code that really matters on top of the apps, which are built on these low-code platforms. The latter simply create their software on the no-code platform for their specific business requirements without writing a single line of code. But the reality is more blurred. IT people and citizen developers are in the same boat, often collaborating to build and synchronize software. Digital transformation is about integrating business with IT.

Can you cut a steak with a Swiss Army knife?

The familiar rich and famous, such as Google, Microsoft, Oracle and Salesforce, have entered the business of low-code. These behemoths also compete with pure plays, some of which are graduating into unicorns themselves. Some offer friendly solutions that allow implementation without a single line of code, but their products generally lack requisite capability to match enterprise needs. Yet others are more dexterous, but require writing some code.  

Many enterprises prefer pure plays to avoid vendor dependency, despite their lesser-known names and allegations of cloud security certification issues. On the other hand, the more established pure plays, which have been around for over a decade, are dispraised by the new generation low-code producers as being bulky, onerous and numb. Longevity is a double-edged sword: it can be viewed as wisdom and endurance, but in technology it is often associated with being outdated or expired.  

Fast, flexible and intelligent

Despite all the differences in taxonomy, method or technology, low-code platforms help develop applications much faster than the classic method of code writing. Model-driven, new generation low-code publishers provide significant speed advantages, and changes can be made on them easily after developing the software. They are based on newer, more agile and open-source languages and technologies. The result is flexible apps, which can be modified according to the constantly changing needs of businesses, saving precious time and labor. These platforms and their apps are also becoming smarter gradually as they embrace artificial intelligence and seamlessly integrate advanced decision automation capabilities.

On the other hand, for now, Solow would probably say that you can see low-code everywhere but in the productivity statistics. Concrete studies comparing low-code results with those of coding are scarce, due to the relatively young age of this segment. Most research firms cite case studies, rather than statistical data, which assert execution times of a few weeks for projects that would normally take months to complete with traditional coding. Low-code firms themselves mention their own customers’ experiences and affirm up to ten times faster performances compared to standard programming methods.  

Customization apps that are built around EAS software, work-flow tools, and other tailor-made solutions are the first victims of low-code, due to the latter’s speed, flexibility, and mobile and integration capabilities. Low-code platform firms are also developing their marketplaces, which host apps created by the users of these platforms. This may eventually be a game changer for the EAS business. Enterprises, SMEs and freelancers will find it delightful to choose the software they need from a wide selection of lean apps that are built with the newest technologies.  

Transforming digital transformation

Connoisseurs and scholars alike attest, inspiring this article and especially this section, that companies evolve into software dependent and propelled organisms in their quest for digital transformation. Enterprises progressively require people inhouse to write code for their digitization and business challenges, or depend on the armies of programmers and advisors of the large systems integrators and consultancy firms, which either supply the software themselves or recommend the legacy providers, unnecessarily complicating the process. Users of all types and sizes are exhausted by the complexity and the total cost of ownership of the products of and the dependency created by the EAS companies and the advisory groups.

Proponents of low-code profess that it will overwhelm this sort of digital capitulation, imposed by experts and consulting firms as a top-down approach. Companies take note of the advantages of low-code and how this could help them have a much more holistic, agile, fast, personalized, bottom-up, and thus successful digital transformation. With no vendor lock-in or dependency of any kind, they will increasingly choose this path to truly integrate IT with their businesses.

Because low-code produces only the software that enterprises really need, maximizes customer value, reduces waste and the number of errors, allows for frequent iteration, and encourages the involvement of employees of different organizational layers and departments, it is also compatible with the business philosophies and methods such as Lean Thinking, Agile and Scrum.

Developing nations, SMEs and individuals are empowered by the recent technological developments and tendencies. Anyone, anywhere in the world, can compete or collaborate with anyone else, anywhere else. A startup in an emerging market can become the challenger of a large enterprise of a developed country. Mobility is a fact of life, connectivity is the norm, and internet is everywhere. Data, fed and analyzed by smart systems, incorporating predictive analytics and artificial intelligence, is the top source of nutrition for companies.

Some label this “Industry 4.0,” others “digital transformation.” No matter what we call it, low-code will facilitate and democratize the production and use of business software in this new era. Companies of all sizes and individuals will make freer, better informed, and more personalized choices. Visionaries and early adopters will naturally have an edge over the rest.  

Code no more

So, should we be writing code at all? Perhaps in a more distant future, there will be “code no more.” But until then, and at least for now, the new generation of low-code platform producers are positioned to refute Solow, Carr and Friedman.

 

 

 

 

Note: This essay reflects the rationale behind the equity holding of Vela Partners in Kuika, a new-generation low-code platform producer. I decided to elaborate on and share the reasons to invest in the low-code sector as I consider it to be of pivotal interest for individuals, enterprises and nations in the era of digital transformation and connectivity. Research firms, articles in magazines such as Forbes, PCMag and Computer World, and executives of low-code, including those of Kuika, coincide with most of the affirmations of this essay, which was written after consulting the articles and opinions of specialists like Steve Bell, Jason Bloomberg, Murat Ihlamur, Yigit Ihlamur, Handan Inalpolat, and Rob Marvin. I am indebted to all of them for their insight and ideas.

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