The one thing about digital business transformation that becomes readily apparent is that once an organization begins reinventing the way it operates, the process never really stops. The level of activity may wax and wane over time, but by definition the transformation process becomes continuous. The biggest challenge, of course, is determining when is best to employ custom code to drive a digital process versus relying on a process that has been embedded with a packaged application.
The number of processes that are packaged up in a suite of enterprise resource planning (ERP) applications has greatly expanded over the years. With each successive update, the providers of these platforms identify new processes that most organizations that have licensed this software can digitize. For example, the processes that most organizations employ to track invoices and issue payments are pretty much the same. It doesn’t make sense to spend a lot of time and effort writing a custom application to manage a set of processes and workflows that are already well-defined within a packaged application.
The first digital business transformation issue most organizations encounter is determining which processes they are currently using a custom application for that might be better served by a capability provided by a packaged application that a vendor is already committed to maintaining. The more rote the process is, the more likely it is that a vendor has found a more efficient way to automate it.
The next decision then comes down to what degree does it makes sense to have an internal IT team host that application versus relying on a vendor to manage it as a cloud service. More organizations in the last few years are clearly opting for the latter approach to free up additional IT resources for other projects. After that decision is made, organizations need to determine how well the process, defined by the application providers, fits the business. There’s usually a lot of resistance to packaged applications if the business needs to realign itself to the way a specific application works. Fortunately, today there are many low-code tools that organizations can employ to bend almost any application to whatever their will desires.
Once an organization determines to what degree to rely on packaged application software, the next big decision is to determine what additional capabilities the business requires that can only be created by custom code. This is an opportunity that organizations have to truly differentiate themselves. After all, if every organization is relying on the same core processes provided by a packaged application vendor, then there is no real difference from one organization to the next. Custom applications built using low-code tools or procedural code written by professional developers is where the opportunity to shine really is. Digital CxOs need to work closely with both internal IT teams and external consultants to identify opportunities to create a competitive edge using custom code. That’s digital business transformation at its best.
The issue, of course, is that it may not take long for rivals to develop a similar capability. Digital business transformation is nothing less than an IT arms race. The difference between surviving and thriving will come down to knowing what processes to modernize using packaged applications and which ones to drive using custom code. The bulk of process are likely to be driven by packaged application software. The roughly 10 to 20% of the remaining processes driven by custom code is ultimately where the battle for supremacy will be won or lost.