Leadership Insights: Low-Code Tools

Transcript

Mike Vizard: Hey, folks, welcome to the latest edition of the Digital CxO Leadership Insights series. I’m your host Mike Vizard. Today we’re with Vidya Aiyer, who is the CEO for Pillar. They are a provider of supply chain management software in the midrange space. And we’re gonna be talking about how the advent of low-code is making everybody a lot more agile, but I’ll let him get into that. Vaidya, welcome to the show.

Vaidya Aiyer: Thank you, Mike. Pleasure to be here.

Mike Vizard: We’ve seen ERP software used at the high end forever and a day, and with maybe some mixed success in the midmarket, depending on the size of the company. But one of the issues that people have had with ERP software is it’s kind of rigid, it makes it hard for them to make adjustments, or it has, historically. Is the nature of ERP changing? And we see a lot of low-code tools, so what is the current state of ERP in that midrange space?

Vaidya Aiyer: So, we focus on the midrange as well as large enterprises, so I’m going to respond to you on, you know, kind of on both. The way ERP is designed, it will always be rigid. That’s the way it is supposed to be. It’s a system of record, it’s not gonna change, right? I have been in the ERP space for at least 25 years, and I don’t think it’s ever gonna change, and I don’t think it should. So what we have always done is, to meet those, you know, requests from business for the flexibility; you kind of go and build applications around an ERP. Those applications could be inside the ERP, you call that custom code, or you can call it outside the ERP, but you really put this bloat or fat around it, to make it more digestible and consumable for the end users. And then to meet those unique process changes, right?

And that, traditionally, has been really expensive. You know, you need a lot of people, very heavy skillsets, with a lot of knowledge and other things. And now, we know that that is a big talent shortage, you know, and nobody has got time for a two-year, three-year rollout of ERPs. And that’s where, really, all the low-code and the no-code comes in, and it gives you the flexibility to meet the business needs very fast, with minimal expenses and cost; that’s essentially where the low-code, no-code comes in.

Mike Vizard: And then, as part of that process, I would assume that when I do upgrade the ERP system, I’m not having this major cartwheel because everybody has to suddenly upgrade a whole lot of custom code. There’s a little more isolation and things are a little more loosely coupled, and we can move forward on one side without necessarily disrupting the other side.

Vaidya Aiyer: Bingo. So, if you go to the basic principles, even, and others would always say system of record, system of differentiation. And what the business stakeholders ask for is really this differentiation, right? And what we have traditionally done is we put that inside the ERP, and then many want to put support packs, enhancement packs, they want it, like, we do a lot of SAP customers, that’s really where we really started with. Me and the whole team comes from, you know, two or three decades of SAP experience, each. And when you want to upgrade that, so, SAP has got this from the client silver version to the S/4HANA, when you want to upgrade that, it needs a human; it takes, like, years. And that is so much custom code that, you know, sometimes just moving the custom code becomes a lot more effort.

And because SAP or any ERP vendor is not responsible for the custom code that a customer writes, it is the customer’s responsibility, right? And that becomes a big thing. So just, this is just best practices, we call this a clean code, you really should have a very clean code system, so that your systems of differentiation or the things that you need for your business side-by-side configuration. And you’re not polluting your code ERP, you are making it on the side, so that if you want any changes, if your, you know, supply chain distribution changes, you are moving from a global supply chain to supply chain resiliency and you want to really go through low-code vendors, like, if you want to do those changes, you should be able to do it quick, without having to, you know, wait for a lot of talent and developers and, you know, really polluting your ERP code.

And that’s really where any low-code, no-code would come in. And we are really finetuned for SAP, we are really finetuned for ERP, we are really finetuned for this manufacturing supply chain space, and that’s really what we do for our living.

Mike Vizard: Who’s writing these low-code applications? We hear a lot about citizen developers, but I also see professional developers are using low-code tools. As we move forward, are we seeing kinds of differing types of people starting to build these applications? And if so, what do they look like?

Vaidya Aiyer: So, in my opinion, the low-code and the no-code, you know, we are all merged together, we just call it, like, you know, one, but they really are different things, totally different things. So no-code, right, where you are not writing a single line of code, that could be towards citizen developers, which is really, you know, business users or business analysts and other things. And you think of it as, you know, when they’re giving you a set of Lego blocks, and you put the Lego blocks together to build an application, you know, that’s a no-code. But you get into little complex situations, you know, specifically, the domain we are in, like supply chain, manufacturing, and other things, you need low-code. Which is, you take these Lego blocks, Mike, but if a customer needs some specific functionality, you don’t want to wait for the vendor to come up with the Lego block. You don’t even know if they will come up with the Lego block or not.

So the low-code gives you minimal coding capabilities, so that the customer can come up with their own Lego blocks, and that is really targeted towards the IP side of the business, right? So you have got the no-code, and I would say the low-code includes no-code, as well, because it does give everything that the no-code does, but it has got this additional capability to write some code. Now, there is also one more flavor, you know, and we call it the transform code, which is really the maximal _____ of a no-code and a low-code, which is, these large enterprises have got a lot of legacy applications, right? Code which is written 20-30 years ago. And even though this low-code and no-code is easy and you can drag and drop applications, if someone has built a custom code in SAP, for example, SAP has got this, you know, native programming language which is called ABAP, right?

If somebody has written custom code in ABAP 20 years ago, do you really want to rebuild all of that again, and then take it forward? It’s still a lot of work. So what transform code does, which is different than no-code and low-code, it really takes it a step further is it really sucks that legacy application in and transforms it automatically to this low-code objects. So that I get a jumpstart of leveraging what I invested in my legacy applications, and then take it from that starting point, and then take it forward for, right? So there is no-code, which is towards citizen, low-code is, I would say, IT, not necessarily developers. Although developers can use it, they can be, you know, so-so so much productive, but it is also for, you know, tech-savvy people, right, who are not developers. And the transform code takes it a step further, where you can leverage the legacy broad category.

Mike Vizard: What’s the right balance in leaning on the vendor to automate a process versus me creating some custom code? And I ask the question because, you know, every time you talk to the big ERP vendors, they’ll tell you that, “Oh, you should never have to write any code. We have optimized everything for every business practice under the sun and it’s all handled from end to end.” But I look around and people still seem to write tons and tons of custom code, so there must be some issues, so, what is the balance between those two things?

Vaidya Aiyer: So, I have never done – and I’ve done this SAP implementations for 25 years-plus – I have never done a single implementation where we did not have to write any custom code. And I don’t know of any other customer who has done that, especially on the larger enterprise space. So, what the ERP vendors say is true, up to, I would say, 90-95 percent or so, but even the last 5 percent is humongous for the customer. The last line is very expensive. So, I mean, if you take a large global company, Mike, even the planned operations within the country, from country to country, within the region, for the same product differs. So it’s just not possible that you will have 100 percent coverage.

You will have, you know, a good 90-95 percent coverage, and that 5 percent is where, you know, a lot of the effort and everything goes to, right? That’s how the custom code really came around, and that’s why business, you know, people started using their own shadow IT and Excel spreadsheets and, you know, Microsoft databases. That’s how all of this popped up, because you need to fill those gaps. That’s where the gap is, between what the ERP vendor says and what the customer really wants. And I do agree, in principle, that a customer should never depend on any vendor, really, no matter what the vendor is, because it’s customer’s business processes and they should really be in control of it.

Mike Vizard: At some point, I have to differentiate myself somewhere. Speaking of other things that go on, we’re seeing a lot of ERP starting to show up in the cloud. It seems like it’s been an extended journey, at the very least. So, how much are people shifting to the cloud? And what prevents them from shifting to the cloud? Because we still see a lot of ERP on-premise, too, so what’s the yin and the yang of ERP in the cloud, these days?

Vaidya Aiyer: So, we are seeing a lot of customers moving to cloud, recently. It was not as much, I would say, even five years ago, but we are seeing more and more options. I don’t think technically that is a big difference, but from an industry perspective or from a policy standpoint, you know, it does make a difference, right? Because from a technical standpoint, you get all the capabilities in the cloud than you are in the datacenter, there is no question about it, you will get more. But certain industries have got, you know, if you think about the defense or pharma, there are certain industries where you need to have that data and sort of things inside your datacenter where you need a little bit more control. And that’s where the challenge is. It’s more of a policy, you know, more of an adoption, more of a change management than, really, a technical problem, at this point. But we are seeing more and more adoption like.

Mike Vizard: We also see a lot of chatter about robotic process automation, AI applied to processes, and it just strikes me that both of those things require access to a lot of data to actually kind of create the models and drive the outcome that we’re looking for. So will that ultimately force everybody in the cloud, because we just can’t handle that kind of data in an on-premise environment, so is that gonna be where we’re going one way or the other?

Vaidya Aiyer: I think everybody will move to some flavor of cloud. I know there are just so many flavors of cloud now, public, private, hybrid, you know, again, you can pick any one. Rubrik RP, the Rubrik process automation, or even as the low-code, no-code, essentially, we are all about automation. Whether you are taking an existing process and putting bots on it to, you know, automate that, or you are taking a manual process and building an application so that it can put bots on top of it, at the end of the day, you know, it’s all about digitization, automation, right? You take a process, you take a step, you see where the problems are in that process, where the friction is, and you try to digitize it. And once it digitizes, you know, you can make more automation on top of it. So, like, we don’t do RPA, but at the end of the day, we all fall into the same bucket of automation and digitization.

Mike Vizard: What do you think the impact of the downturn in the economy has been on supply chains and ERP software? Are people taking a harder look at that, or are they just kind of hunkering down, or what’s your sense of just how willing are people to go back in and look at these applications? ‘Cause they are core to the business, and I think it takes a lot of fortitude to think about switching anything out.

Vaidya Aiyer: So, what we are seeing on the ground, Mike, is that is real pain. You know, we talk about supply chain and at least the domains that we are in, right, that is some real problems. But at the same time, we do see customers getting, you know, at least keeping an eye open on the market, the economy, and other things. They are a little bit more selective about what to fix, but at the end of the day, every customer, every company knows that this is cyclic, you know, that there is an economy problem now and tomorrow it’s going to come up, and they need to prepare for that, right? So, the critical things that need to be fixed, that those things are going through, it’s not that they are slowing down on that. But anything which can wait, you know, everybody is taking a hard look at that, right.

And specifically in the domain we are in, the supply chain problems, you cannot fix that in a few days. You really need, you know, a long time to change the process, put systems on top of it, change the locations, change the – you know, so that takes time. And those things, you know, we do see customers, but it is definitely impacting the market, you know.

Mike Vizard: We of course talk a lot about digital business transformation, and it almost seems like we talk about it like it’s some sort of event, but I have to wonder, I think it’s more of a continuous process and a journey. So, will we be forever on some sort of digital transformation process and everybody should just kind of assume that’s the new default?

Vaidya Aiyer: I agree, I think it’s going to be a long, long time. I don’t even know if anyone knows what the endpoint will be. I feel it’s all part of the automation category, and automation is something that will never end. We digitize what we have, and then we’ll find a way to automate and digitize that even further, and even further, and even further, right? We will probably call it a different name as we go forward. I’m sure the analysts and the industry, you know, is all looking into it, and maybe it’s some other terminology, some other term, but automation has been with us for the last, I would say, 40-50 years, or 60 years, on the software side, and it will continue to grow, right? It’s not gonna stop.

Mike Vizard: So, what’s your best advice to folks? What’s the one thing you kind of look around and shake your head and just go, “I can’t believe we’re still doing this, we’re still talking about this”?

Vaidya Aiyer: So, my concern is – and this is for anyone in the company, the customer, right? If they just stand and watch their process and they see a friction in the process, any kind of friction – you know, what I mean by friction is somebody taking a printout, right, somebody taking a spreadsheet, and say that, “Can I automate that process?” I had a customer whose goal was, “I’m going to eliminate printers in the floor,” and I thought that that was fantastic, because that just eliminated all the printouts in the whole building. Even a simple goal like that will digitize this, you know, like crazy, and it gives a very tangible goal for customers to go forward. So, my two cents is, the digital transformation, I just said, is very broad, that it’s got a million things in it, but if you take very tangible outcomes, “I’m going to eliminate the printer,” “I’m going to eliminate this spreadsheet,” “I’m going to eliminate this paperwork on the plant,” on this table, on this holding area, on this warehouse, or whatever that is, that kind of tangible goals will accelerate the transformation. And it’s really visible, as well, Mike.

Mike Vizard: Yeah, well, I think a wise man once said if you can see a process, it must be broken. Hey, V, thanks for being on the show.

Vaidya Aiyer: Thank you, thank you so much, Mike.

Mike Vizard: And thank you all for watching the latest episode of Digital CxO podcast video series. We hope you enjoyed it. You can find this one and others on the digitalcxo.com website, where you can find some show notes and additional episodes. Thank you all for watching.