Mark P. Dangelo: Coming to a Store Near YOU, the Low-Code/No-Code Revolution
Mark P. Dangelo is Chief Innovation Officer with Innovation Expertus, Cleveland, Ohio, responsible for leading and managing global experiential teams for business transformations, digital projects and innovation-based advisory services. He is also president of MPD Organizations LLC and an adjunct professor of graduate studies in innovation and entrepreneurship at John Carroll University. He is the author of five innovation books and numerous articles and a regular contributor to MBA NewsLink. He can be reached at mark@mpdangelo.com or at 440/725-9402.
In a world of digital, having data is just the entry fee to compete—there is no guarantee of success or profitability. During the past decade, digital data continues to double every 16 months, spurred on by third-party collectors and aggregators all focused on stitching together every aspect of an individual’s life from education, taxes, utilities, retail, personal, professional, financial and of course, lifestyle.
The specificity of these footprints left behind are used in often surprising patterns of recognition (e.g., via machine learning spanning many systems of record) to ascertain cause-effect predictions ranging from buying habits to income needs to likelihood of defaults. As individuals, we were once a “number”—now we are a collection of digital deductions used by unregulated entities intent of delivering a new universe based on our cast off, opaque metadata (i.e., our “meta universe”). It is difficult to enforce privacy and even security when the amount of potential mined information is galactic in size and untapped. The implications of this mining on behaviors are being written with every innovation.
Now a new data race is underway—a race to turn data into sales and influence decisions not in months, but in days. The era of low-code/no-code (#LC/NC) solutions leveraging our data lakes and data warehouses is coming to Main Street and impacting every employee and contractor tasked with connecting to customers and their rapidly changing behaviors.
Today’s innovations in the LC/NC space represent a vital transformation 30 years in the making. However, while the mantra of digital data is consistently promoted, very few effective leaders embrace the creation of reusable, transformative building blocks necessary to continuously leverage digital innovation (see The Effective Leader, #MikeCameron). Lift-and-shift data technology replacements have risen in recent years as cloud (e.g., as a Service, #aaS) offerings transformed provisioning principles and vendors have capitalized on the global mainstreaming of non-premise software and serverless systems.
Declining Industry Dominance Intersects the Rise of LC/NC
The statistics of LC/NC paint an ecosystem of changes that will comprehensively transform software development, cycle times, data usage, and IT budgets. The explosion of LC/NC represented only $10 billion of sales in 2019—it is projected to top $190 billion by 2030—while representing 65% of all application development by 2024 (see #Gartner and #GlobalNewsWire).
The acceleration of digital data volumes is the primary reason for the LC/NC explosion mapped against the lack of available data science skill sets now commanding an average salary of over $100K USD (see #USNews). Moreover, LC/NC reduces development time by an estimated 90% at a time apps have exploded to five hundred million (see #Redhat and #IDC). With this adoption rate, it is easy to understand why over 75%of enterprises by 2023 will be using three to four LC/NC languages provided by the less than two hundred vendor offerings available (see Gartner and compare this against 14,000 estimated #FinTech vendors by EOY 2021).
For LC/NC, the fundamental driver for its rapid rise is the monumental challenge of how can you access the value locked across these disparate oceans of data without requiring vast and expensive resources? Banking and financial services (#BFS) were some of the earliest adopters of data warehouses (i.e., structured data linkages) due to their long history with prominent industry vendors such as #IBM. However, since the 1990s BFSs have watched their monopoly on consumer financial data fall from the low-90% to the mid-30% today. Their data domination diminished as non-traditional vendors and “crazy” innovations changed the dynamics of channels and how consumers viewed their brands and offerings.
Today, most BFS brands resemble a public utility unable to address rising non-traditional payment methods and innovative financial solutions—all the while the number of institutions has steadily fallen from more than 12,000 to today around 4,700 during the past 25 years.
For BFS firms and their technology leaders, the rise of LC/NC offers a transmutation inflection point to focus highly skilled resources—IT data experts and scientists—on complex and high-return initiatives, while turning over the bulk of application to “citizen developers.” This new rank of domain-specific developers (if trained properly) could improve business analytics, decision accuracy, boost campaign efficacy, and even eliminate expensive rework or system replacement initiatives encompassing LOS and servicing improvements.
The “Walmart Transmutation”
A decade ago, educational leaders provided the science and scientists to crack-the-code of these rising data volumes—enter the careers of digital scientists, machine learning specialists, and artificial intelligence (including computational intelligence) professionals. Yet, these highly skilled and specialized individuals are expensive to enjoin, and the results often marginal as the science was young and the business practices of deployment and retention were out-of-phase with expectations—that is they applied old practices to new realities and methods of operation.
Across markets and demographics, the provisioning and cataloging of vast digital assets grew even more with cloud vendors (e.g., Amazon) and their explosion of services. As a result, traditional software vendors began to partner, acquire, and adapt their solution suites to stem the loss of business. They used their domain expertise to craft industry offerings that at a minimum leveraged growing data volume from outside their vertical competencies to retain relevancy—e.g., LOS, servicing, and customer contact. In a market dominated by rising home prices and scarce supply, the recovery strategies worked.
However, early in November Walmart opened a “next” reality with its purchase of a vendor who lessens the demand for long-lead-time programming and data specialists. This acquisition against a pool of vendors offering LC/NC signifies the importance and efficacy of the nascent industry against the need to unlock and leverage corporate data lakes, data warehouses, and aaS offerings. The impact of acquiring LC/NC vendors not only reduces competition, but also leaves the remaining vendors struggling for innovation relevancy. Within the finance and lending space, this means a greater reliance on existing solution providers, or a search for LC/NC providers who can provide the differentiation needed once the current cycle of growth ends.
Moreover, as large brands conduct M&A enveloping events within this space, LC/NC offerings will consolidate and advance as clear winners and losers become apparent. Investor funding into the expanding offerings and science of LC/NC will advance into specific industry capabilities with vendors (e.g., #Appian) expanding their BFS relevancy. Silo deployed industry software and cloud vendors will (likely) seek to dismiss the LC/NC expansions due to the threat of revenue impacts and longer upgrade cycles. But efficient leaders will recognize the paradigm-shift created by these LC/NC advancements and empower their personnel to embrace the ability to unlock digital data for improved customer and operational value. Standouts outside BFS include #Ricoh (per #Bloomberg) who achieved a “253% ROI and payback in just 7months.” BFS from all indications is currently a laggard industry.
Digitization has permanently changed our behaviors and cultures
With this rise of data, we have witnessed the meteoric rise (and fund raising) by previously uncommon LC/NC firms—#OutSystems, #Mendix, and #ServiceNow with over $550M in capital rounds (see #Crunchbase). Looking back, we have witnessed the rise of technologies including cloud driven “as a service” solutions encompassing all industries and thousands of specialties. We have experienced remote learning and interactions driving education and business dealings once thought improbable during the last 18 months. LC/NC represents another innovative advancement during this Fourth Industrial Revolution underpinned by everything digital.
The ability to deploy digital solutions that expand our personalized data continues to grow. These transformative efforts clearly started in the age of social media—and well before with the deployment of transactional BFS systems and data warehouses. Moving forward, data will be generated by everything we do including reading this article adding new granularities to help ascertain importance, popularity, and time spent down to an IP address.
For BFS firms seeking to avoid commoditization and crushing backlogs, the LC/NC offers a steppingstone to not only achieve parity with larger firms (where the top 15 firms control over 50% of all assets), but create transformative offerings that are tailored, precise, and sought after by customers who now have a plethora of financial choices. And yes, this is a emerging set of innovations—the potential is significant but it is not a panacea or a one-size-fits all.
LC/NC will only be successful if it is integrated with the company culture, leadership principles, and customer demands. It is an enabler for the next level of IT offerings. IT leaders and departments will be critically important, but LC/NC will be part of the solution mix that has to be balanced. In the end, highly skilled IT resources and vendor partners will be freed up for complex tasks with a balance of funding and returns. In the end, the negative impacts to IT budgets and allow for the recruiting and retention of those highly skilled scientists for work they want to do—not the 85% of mind numbing maintenance work that eats time, money, and energy.
And, if Walmart signifies the beginning of the tangential sprints, then it is likely that LC/NC could be a very prominent c-level agenda item in 2022. It is tempting to ignore these projections as over-hyped, under delivered media coverage—but that philosophy in hindsight contributed significantly to the historic reality of who controls the financial data and discussions (hint, not BFS). NC/LC could be the difference between being a large public banking utility crushed under regulations—or a nimble, innovative competitor who understands and delivers for the customer.
(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)
