The Road to Modern Delivery: Low code development, market speed, and the Future of IT

(Editor’s Note: As disruption becomes a seemingly permanent condition of doing business, KPMG’s observation is that leading organizations counter pre-emptively, with strategy, behavior and capabilities that anticipate continuous change. Our “Future of IT” initiative distills our insight about these drivers, as we expect them to play out during the next three to five years.)    

In our conversations with IT leaders, migration to digitally integrated operating models has taken on new urgency. Rapid and widespread disruption has exposed vulnerabilities and highlighted the divide between digital have and have-nots. Now, after a necessary pause to ensure business continuity and financial stability, C-suites have resumed their digital transformation journeys, adjusted for the new reality that has emerged.  More precisely, our research shows, companies are selectively accelerating transformation investments, focusing on near term time-to-value opportunities – the “must haves” that will strengthen business resilience and protect the company’s future.[1]

The digital leaders, regardless of sector, are outperforming their competitors in every meaningful business measure including both resiliency and responsiveness, in the face of sometimes abrupt market change. One shared characteristic among these digital pathfinders is the re-imagining of IT and the technology operating model to run at market speed, providing a financially efficient and risk-secured mix of technology innovation that enables the strategic objectives of the business through an “omni-speed” operating model. If “the test of the captain is in the storm,” the success of the market speed operating models (MSOM) we have observed in current circumstances is powerful validation.

We hear a lot of CIO interest in adopting MSOM, coupled with questions about next steps to get there. For those seeking to rapidly modernize their IT estate to support digital transformation, while at the same time remaining cost competitive, the challenges are real.  Enter low code application methodology, an accelerator that offers CIOs an alternative option, as they consider ways to replatform hundreds or even thousands of custom or legacy applications to be digitally native. Comprised of pre-built, modular components, low code allows developers of varied experience to create and refine applications, using drag-and-drop visual dashboards. It can serve as a potential replacement application development approach for CIOs, when cost and talent-acquisition challenges present seemingly prohibitive hurdles to continued digital transformation. The marketplace has noticed: Our research indicates the number of executives who named “low code/no code development platforms” as their most important automation investment has more than doubled (from 10% to 26%) since the widespread emergence of COVID-19.[2]

In more than 150 successful KPMG use cases, the implementation of a low-code platform has helped IT organizations produce tangible speed, quality and cost benefits for the business. At a global life sciences company, for example, the use of low-code automation to support business process transformation drove a 50 percent reduction in cycle times, and an 80 percent first pass yield rate. At a reinsurance company, low-code enabled workflow automation of key accounting processes, reduced error rates by 80 percent and resulted in 100 percent transparency and compliance. In addition to the specific benefits listed in these case studies, low-code development benefits generally include:

• Faster cycle times: The Quality Assurance and Governance/Risk/Compliance testing and approval steps typically loaded at the back end in legacy development are “shifted left” and moved upfront, to shorten mean time-to-market. Agile development techniques – scrum teams, working in two-week sprints against iterations of scope – are an additional cycle-time lever
• Increased application content to the business: Market speed operating models assume continuous delivery of new applications and upgrades – prioritized, paced and scaled by the business. “Fail-small, fail-fast” approaches are built into the process, incorporating feedback from the business to shape follow-on releases
• KPIs defined by the business: Low-code catalyzes an important paradigm shift toward new performance metrics such as “objectives and key results” (OKRs) – defined by the business, based upon “product thinking” – and away from KPIs based on legacy IT project and process measures
• Strengthened cross-functional collaboration: Low-code can’t be considered apart from its change-agent impact on wider IT culture and practice. Its accessibility to a range of coding experience enables deployment of long-term citizen-developer teams, consisting of business subject matter experts, GRC professionals, and IT specialists
• Resourcing efficiencies: Low-code platforms frequently come with out-of-the-box automation features and APIs to connect with data sources and enterprise systems. The reduction of resource-intensive coding activity allows the IT organization to pivot to higher-value-add activities.

Getting There: First Things First

For many CIOs, legacy IT application development paradigms were under pressure well before current market and economic conditions emerged. Faced with questions about how to maintain or enhance the relevance of their organization to the business, their issue is not “whether” to consider alternatives, but “how.” Drawing upon lessons learned in previous low-code engagements, KPMG has developed an array of assessment and implementation tools that can help CIOs leapfrog generic challenges and move quickly to their target outcomes. These include frameworks and accelerators for opportunity identification, automation-technology evaluation, business process design, operations stand-up and training, governance, and security and compliance.

The Road Ahead:

By itself, low code adoption will not substitute for the intricate work of developing a market speed operating model. CIOs still need to acquire, create and integrate additional building blocks: scalable Agile delivery methods, consumable architectures, integrated delivery tools, CI/CD pipelines and AI-powered DevOps practices. They’ll have to configure those technology assets to the product priorities of line business units and risk tolerances of GRC stakeholders, and foster working partnerships with those groups. And they must address the all-important human factors of IT skillsets, team design, and culture – an often elusive operational dimension on which an effective market speed operating model rests.

Transformation journeys are, by definition, paths and not fixed destinations. For CIOs looking for rapid, measurable business impact, however, adoption of a low code application methodology is a highly practical next step on their evolutionary road. ###

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[1] Enterprise Reboot: Scale digital technologies to grow and thrive in the new reality; KPMG and HFS Research report, 2020), p.14

[2] Enterprise Reboot, p.17