Low-code software development: from crisis technology to core technology

Mendix, a Siemens business and global leader in modern enterprise application development, announced the results of its “The State of Low-Code in Key Verticals 2022” survey, which shows that most organizations expect to use low-code more than traditional by 2024 coding. Consistent with this, Gartner estimates that by 2025, 70% of applications developed by enterprises will be built using low-code or no-code technologies, up from less than 25% in 2020.

The report also shows that in 69% of the organizations surveyed, low-code has evolved from a crisis technology during the pandemic to a core technology today. Almost all (94%) of these companies use low-code, up from 77% in 2021.

The survey, commissioned by Mendix and conducted by research consultancy Reputation Leaders, collected data from the banking, financial services, insurance, public sector, industrial manufacturing and retail sectors in France, Germany, the Netherlands, the UK and the US. The survey was conducted from June 8 to June 20, 2022.

“Over the past two years, the way we run our business has changed fundamentally. It is now critical to digitize operations and engage with customers and employees through different models and touchpoints,” said Tim Srock, CEO of Mendix . “At the same time, increasing technical complexity and accelerating business velocity require the use of low-code to ensure that delivering business value is technically feasible and can be achieved in a fast, agile manner.”

general trend

Companies today use low-code as the foundation for digital transformation. Because such technology purchases are considered strategic, they are now driven by executives including CEOs, CIOs and chief digital officers. About 70% of respondents consider low-code a core part of their business.

If the companies surveyed did not make a technological leap during the pandemic, one in nine said their company would close due to lost customers; reputational damage; higher prices; lost revenue; or letting employees go.

Across all businesses using low-code during the pandemic, priorities are constantly shifting as macroeconomic conditions and customer expectations change. In 2021, in order to coordinate, reduce costs, and increase speed, low-code will be adopted.

Now through 2022, low-code is accelerating the development of customer portals, productivity applications, and enterprise-grade software. The current goal is to achieve greater business agility, simplify technology adoption, and build security into applications from the start. Four in 10 people use low-code for mission-critical applications.

“Most leading companies, regardless of industry, are using low-code to deliver higher-quality digital experiences, as well as improve back-end automation and increase overall business agility,” said Ron Wellman, Head of Industry Cloud at Mendix. “They need A low-code platform to support rapid change, business/IT collaboration, legacy updates, and changing customer and employee expectations. To help our customers accelerate value delivery, we work with industry-leading integration partners and ISV solution developers to provide Key verticals create industry-specific ecosystems to populate the Mendix marketplace with additional customizable templates, connectors, and solutions, such as for underwriting automated insurance, institutional onboarding in banking, and shift swapping in retail.”

Low-code is moving from a supporting role on the factory floor to a dominant role

During the pandemic, manufacturers are using low-code to connect peripherals and support logistics and quality assessments. The biggest perceived need for low-code now is IT (50%), production engineering (43%), product design and quality control. Low-code is also being used to improve collaboration across fields, disciplines and geographies, as well as connect and access shipping and suppliers (64%). A major goal is to use low code to connect IT and OT.

Some are using it to replace homegrown legacy systems around quality or manufacturing processes, and many are using it to alleviate supply chain issues. Not surprisingly, nearly a third of respondents said they were frustrated with their company’s legacy systems, which is why 39% needed proof that low-code would integrate with them. The majority (63%) use low-code to alleviate shipping, logistics and supply chain issues.

The top two perceived low-code benefits in manufacturing are increased real-time process visibility (39%) and increased real-time data visibility (38%). Data integration helps facilitate these benefits. It also supports data sharing outside of engineering; improved contract bidding; and the creation of mobile and workflow applications. The two biggest challenges facing manufacturing are modernizing traditional IT and production monitoring, both at 32%.

Currently, the top three production use cases are peer-to-peer sharing applications, connectivity to shop floor equipment, and connectivity to existing commercial software. Going forward, respondents want more manufacturing-specific application templates. They also want to make legacy systems accessible on the go and integrate low-code and its AI capabilities with IoT for smart manufacturing.

Finance, banks and insurance companies are automating quote services and streamlining processes

Before the pandemic, fintech and insurtech were already disrupting incumbents, and in 2020, traditional organizations have no choice but to be digital-first to maintain their customer base. Low-code played a key role in making the leap. Low-code is now being used on the backend to improve internal efficiency and on the frontend to provide a better customer experience.

The top three perceived strengths for these industries are quoting automation (60%), standardizing and simplifying the buying process (55%), and providing better customer service (50%). Meanwhile, data integration helps improve internal efficiency and customer experience for about two-thirds of respondents.

In 2022, finance, banks, and insurance companies are using low-code to build secure and cost-effective applications and further accelerate software development.

Public sector entities are prioritizing process efficiency and cybersecurity

Despite the increasing digitization of modern society, the public sector still relies heavily on spreadsheets. Federal, state and local governments are using vast amounts of spreadsheets to manage information, even though they are difficult to maintain, lack version control and are outdated.

During the pandemic, government organizations have mostly used low-code to create innovative solutions to lockdown restrictions. About a quarter have adopted low-code, and about half are beginning or halfway through.

Half of public sector respondents said the biggest benefits of low-code were improved, centralized and standardized citizen authentication; improved access to services; and improved planning and management of budgets and in-kind resources.

About three in 10 said low-code helps organizations cope with growing data volumes and integrates better with data and processes than traditional software development. Cybersecurity is a top concern, with 30% saying they want to use low-code to reduce security concerns.

Retailers look to improve customer experience, data usage and internal efficiencies

During the pandemic, retailers have had to double down on their digital businesses and embrace new delivery models such as curbside pickup. Today, customers expect a “unified retail commerce” that delivers a consistent experience across channels because they’re tired of inconsistent pricing and different systems saying different things.

Retailers are trying to address these issues head-on with low-code, with more than four in 10 retailers saying that the top three benefits of low-code are increased cross-organizational collaboration, customer service and customer data synchronization. More than a third (36%) say low-code has helped them implement hybrid retailing, and 32% say low-code has helped digital shopping and pickup, although 53% say they need better vendor integration.

While retailers make customer service a top priority, they also need to share data with suppliers so they can achieve accurate, real-time inventory management that reduces customer frustration and preserves profits.

“Organizations differentiate themselves by being agile and rapidly building new digital solutions that are unique to their brands and meet market needs, no matter where they are in their modernization efforts. Retailers are using low-code to digitize processes and empower their partners, Collaboration between an ecosystem of suppliers and third-party solution providers to improve visibility and actionable insights. This is key to delivering exceptional customer service and experience, especially as retailers focus on personalizing the in-store experience situation,” said Erika Arena, head of retail at Mendix. “Modern application development platforms enable organizations to create unified experiences by extending and connecting solutions across the enterprise.”

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