Digital transformation : The return of custom software ?

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Businesses must be agile to keep the pace of the new business cases of digital transformation. In this context, the cloud looks like a mandatory turn for whom wants to be fast enough. It’s not possible anymore to go for pharaonic application development and deal with months-long evolution cycles (and even more) while the evolution of needs and usage requires to think and act in terms of weeks.

While we’re witnessing a logical and unavoidable cloud rush we’re seeing businesses (and lot the least ones) taking the opposite direction.

[quote_left]GM hired 8000 developers to digitize its sales[/quote_left]When it came to digitizing its sales, GM decided not to use one the usual market solutions. Rather, they decided to build their sales and customer relationship solution internally and, to do so, hired not less than 8000 developers. Source of costs and slowness while the big trend is to oustsource all this stuff to be more agile and reduce costs ? Not at all.

According to GM, using one the market solutions, no matter how customisable it is, force to fit into expected use cases while being differentiating requires to invent usages and business models that are not the same as the competitor’s. Another benefit is that controlling the whole technology makes it easy to really understand it, it potential and invent really new business cases. Doing so, they managed to build a platform that takes each of their constraints into account and address them specifically instead of having to fit in a solution designed for most cases but has gaps when you have ideas and constraints that are not anyone’s.

It reminds me of what GE did in the early 2000s to build “Support Central“, which was nothing more than one of the most complete and best designed enterprise social network ever even if, at this time, no one was using this word. Despite of the hugeness of the job, the teams in charge of the development were able to add improvements every 15 days, what shows that doing things internally is not a barrier to agility.

[quote_right]Custom software : a big trend ?[/quote_right]At the same time, a study by Appian showed two interesting things. The first is a surprise for nobody : there’s a massive move towards the cloud. The second, more surprising, is the emergence of custom software as a real market. It’s not a contradiction. One can do custom software in the cloud, what allow to optimize infrastructure related issues while being differentiating on the software. The authors see it as a real market. What, by the way, makes me say one more time that even if the cloud is the future, businesses should keep in mind that cloud is much more than Saas, unlike many business people often think. The more one need to differentiate from competitors the more I see Paas or Iaas as the right approach.

But that’s not really new. 10 years ago, in Does It Matter?: Information Technology and the Corrosion of Competitive Advantage, Nicholas Carr showed that ERPs brought nearly nothing in terms of competitive advantage. Since every business was using them and often in the same way, ERPs helped to reduce costs, optimise processes but since everybody benefited from the same technology applied in the same way, it changed nothing in terms of competitive advantage.

Of course, not everyone has the means GM or GE does but that raises a couple of questions. While businesses need to be really differentiating  in customer relationship and experience, will there be a premium for those who choose custom made solutions and can afford tailor-made developments ? By the way, the Wall Street Journal article says it’s too early to say if the initiative is a financial success even if, the car manufacturer seems very happy and confident with what has been done so far.

Your point of view ?

Image Credit : Developers by Sergey Nivens via Shutterstock

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Bertrand DUPERRINhttps://www.duperrin.com/english
Head of Employee and Client Experience @Emakina / Former consulting director / Crossroads of people, business and technology / Speaker / Compulsive traveler
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