Are ERP-Centric Enterprises Being Left Behind?

Many large enterprise companies are rife with departments that depend on customized ERP software applications. These systems accommodate vital business tasks ranging from inventory management to ordering capabilities to accounting programs to CRM platforms—all of which were custom-built to fit the enterprise’s specific needs and meet the KPIs of each unique organization. These applications tend to sustain grades, patches and reworks, sometimes resulting in multiple redesigns over the course of decades, and these often are not properly documented. To make matters worse, these ERP software systems also tend to be written in outdated programming languages such as ABAP for SAP and PL/SQL for Oracle, making them a challenge to update.

For example, 91% of respondents in a recent ASUG survey of 110 SAP companies said they use custom code, and 41% of those applications were created at least six years ago. The majority of these companies said that the existence of these custom code environments has become a hindrance to digital transformation and is holding back innovation.

These conditions create the bloated and overly complex legacy environments that are now commonplace in the enterprise market. Widespread, customized core business systems have made digital transformation particularly daunting for enterprise companies. They require significant developer resources, excessive time commitment and ample expense to strip down and redesign these custom systems for the cloud. 

A Lack of Developers—and of Developer Interest

U.S. Department of Labor statistics from December 2020 indicated that there will be a shortage of 40 million skilled workers worldwide, amplifying these issues further. That figure is predicted to grow to 85.2 million by 2030. What’s more, new developers entering the marketplace gravitate to more contemporary programming languages such as JavaScript and Python, as opposed to wanting to revamp archaic code used in most ERP solutions, such as ABAP.

For this reason, large enterprise companies in a range of verticals are lagging behind when it comes to upgrading mission-critical software applications to the cloud or to a more modern architecture. These organizations are well aware they stand to gain significant productivity benefits from digitally transforming their systems so that, for example, inventory data can be accessed via a mobile device or shared from anywhere on a cloud-based platform. Yet these large organizations are stalled in their efforts to modernize. Some companies have gone as far as to scrap their current systems and start reprogramming their software applications from scratch—a hugely expensive, lengthy and laborious endeavor that’s also full of risk. 

Leveraging Low-Code to Simplify Enterprise IT Environments

One method that has shown progress in unraveling these overwrought environments is to apply automation through low-code integration. Ideally, an effective low-code development solution will automatically convert existing business processes to modern, cloud-native applications, allowing the organization to maintain the business logic it has built into those applications over the years, while drastically reducing the time commitment, costs and potential disruption associated with traditional, long-form integration. In SAP environments, for example, using a low-code rapid application development solution can separate the application layer from the core SAP system, automating a large portion of the migration while preserving a “clean” SAP core.

With many organizations under pressure to keep budgets under control in what continues to be an uncertain economy, these large-scale companies are looking for ways to modernize their operations on a more controlled schedule. When enterprises use low-code solutions—and furthermore, don’t have to search for developers of these more archaic languages—they’re free to approach digital transformation in a far more incremental and cost-effective way.

For instance, the 12 million users of SAP’s solutions are being compelled to upgrade to the modernized version of its product, S/4HANA. Yet the American SAP User Group (ASUG) research shows that only 33% of these organizations have taken on the challenge so far despite the looming end-of-life of the current prevalent version. This is because lacking a low-code development solution, companies are being pressured to convert and rebuild all their business processes in one fell swoop. Few organizations have the resources to absorb such a drastic and risk-prone undertaking. 

A rapid application development program acts as a bridge for companies that are looking to modernize their businesses, allowing them to upgrade their applications incrementally, according to their own schedules. Low-code can be a catalyst for technical debt-ridden enterprises, allowing them to simplify complicated legacy environments and get down to the business of innovating their systems.