ERP Has Reinvented Itself Again, And This Time It's Going Designer
This article originally appeared in Forbes
As early as the '90s, businesses and analysts alike have foretold the death of the ERP system. Over 20 years later, however, ERP is still alive and well. Globalization, digitalization, the internet and a whole host of other technologies have made it virtually impossible for businesses to move away from ERP. There’s simply too much critical data housed in the underlying databases for elimination to ever be a viable option.
ERP was criticized for its complexity and for being difficult to change without expensive and time-consuming coding — and still is. Customization is almost always a necessity and can mean locking into a current version or vendor because those customizations are impossible to maintain.
However, this whole dynamic has changed in a relatively short period of time thanks to cloud technology advances and the burgeoning low-code/no-code market. Citizen developers are taking advantage of visual coding environments and machine-generated code to easily and quickly create high-performance applications that are custom-built to fit a business’ exact needs. While these low-code/no-code environments have been quickly adopted in consumer technology and app development, adoption has been slower in the enterprise space -- and for good reason. Skeptics worry that we’ve been down this road before and that the rise of the “citizen developer” will lead to Shadow IT all over again: ungoverned, unmanaged solutions built outside of IT’s domain.
I believe the citizen developer market will be huge in the coming years, but this growth should be driven by the citizen developer – not big software vendors like us. The true power of low-code/no-code development comes from the industry-specific and tailored functionality that can be added by smaller, specified app development platforms and their citizen users, which can be far more tailored to a single micro-industry than the software of an industry giant ever could. Even our company, which offers ERP solutions for many industries, can't compete with the enterprise-specific apps citizen developers may create. And those apps will only be augmented by interfacing with and extending the capabilities of ERP platforms that already exist (no matter which ERP vendor they come from).
To prepare for and be ready to fully take advantage of the benefits low-code/no-code can offer, organizations should put in place an integrated, “all hands on deck” approach, where apps built by citizen developers are governed and managed by IT, leading to a more successful digital transformation. While there will undoubtedly still be bumps in the road ahead, it’s time to set aside reservations and explore the possibilities of low-code/no-code — but not without a solid plan in place.
The Power Is In Your People
Relinquishing the design of overlaying interfaces will be a hard thing for many ERP vendors to do. For decades, the big brands have been dictating the best practices business should follow, forcing companies to map processes and programs to the prefabricated designs of the ERP solutions they purchase. While these out-of-the-box capabilities may be ideal for a small fraction of the industries they were initially designed to map to, businesses and industries change rapidly. It is, therefore, naïve to think that any vendor, no matter how large, could know the ins and outs of any business or department better than the business itself — and especially its employees.
This is where businesses can leverage their employees to take advantage of low-code/no-code applications. Citizen developers represent a new generation in the workforce. They see technology as a way to create value in their work, opening doors to innovation and higher efficiency, and providing new ways of accomplishing goals. When given the tools to quickly develop front-end applications, the solutions they develop will map exactly to the processes used by their organizations, their departments and even their individual teams. The enterprise applications these citizen developers will create, as Jason Bloomberg wrote, "will focus almost exclusively on AI-supported, model-driven and declarative application construction," taking advantage of business data and intelligence that was once relegated to the back office. Enterprise systems like ERP will have to be designed to support this change, enabling customers to build out from the core using loosely coupled microservices so employees can create service-enhancing ERP extensions in their own image.
Of course, this capability to code in-house will fundamentally change the role of in-house IT. As we move further into this new world, modern IT organizations must move away from dispensing limited solutions that are governed with an iron fist, and instead should empower employees and facilitate citizen development. Successful IT organizations will be those that provide their employees with the tools and technologies to design and develop their own IT solutions — as well as the classes and education needed to do so successfully. With review and approval processes in place, both IT organizations and employees can find mutual benefit in the creation of “citizen-built” applications.
The migration of customization and workflow/process design will also transform the ERP vendor, which will start focusing more and more on underlying platforms, tools and databases, as well as embedded technologies like AI and machine learning. For example, Unit4 does not offer a specific platform for citizen developers, but we do provide an API that allows the apps created by citizen developers to access the underlying information and workflows.
To jump-start the low-code/no-code transformation, it will be crucial for vendors to provide the necessary tooling, platforms and APIs to enable a digital business platform that can be utilized by low-code/no-code technologies.
ERP From The Inside Out
Organizations actively embracing citizen development by providing training, IT support and access to low-code/no-code design environments will set themselves up to be more agile and innovative, and in a better position to succeed with their digital transformation efforts. Consequently, I believe that ERP vendors that respond to the changing market and build their solutions around this “designer ERP” philosophy, providing an extensible platform for digital transformation, will be the most successful. The path to innovation and true digital transformation will start with IT managing the development environment while simultaneously allowing citizen developers the room to creatively find solutions to enable higher productivity.