A Winning Trio for Business Agility: Composable Enterprise, Low-Code, and Gen AI

Emerging from the pandemic, the global business landscape has been challenged with continuous uncertainties, leading organizations to embrace business agility. As technology becomes an integral part of business operations, IT needs to move at the pace of market changes and act as the enabler of business innovations. Being able to build a flexible application portfolio and speed up the application development process proves to be critical success factors for achieving speed and agility. In this regard, the composable enterprise model, low-code, and generative AI (gen AI) provide a winning trio for championing such a target. 

2023 has been a challenging year for the global economy: a prolonged recession, unforeseen catastrophic losses, and rising political tensions. Given the current and potential market uncertainties, international organizations have shown pessimistic views of the future outlook. According to a PwC survey ^[1], 45% of corporate leaders have expressed fear for their companies’ financial health in the next 10 years if they continue their current path, up from 39% just 12 months earlier. Reasons for such a lack of confidence vary, but global corporate leaders have collectively pointed out changes in technology, customer reference, and regulations as their top three challenges to be addressed in the next five years.

As the market moves fast and unexpectedly, speed and agility have become critical competitive advantages. Indeed, a Harvard Business Review study ^[2] has concluded that speed-focused companies achieve better financial performance as they are quicker at understanding and delivering what the customer needs. The study found that companies with the most robust five-year compound annual growth rate (CAGR) and margin growth, including Tesla and Amazon, are more likely to have developed core capabilities that accelerate operational speed.

To stay afloat in a fast-changing environment, companies should at least move at the same pace as market changes. But as size is often negatively correlated with speed, large companies are slow to make modifications. This is where the Composable Enterprise model comes in handy, which offers a Lego-like perspective to look at corporate operations. The model, developed by Gartner, suggests breaking down business functions into packaged business capabilities (PBCs), which are stand-alone, fully autonomous components recognized and consumed whole by business users, such as systems that manage supply orders and production lines. Connected through API and event streams, these PBCs can be effortlessly assembled to create applications that are tailored to individual and business needs. This approach ensures the flexibility of the application portfolio, allowing the applications to be assembled, reassembled, and extended to align with changing corporate strategies, which ultimately enhances business agility and adaptability.

In the transition to composable enterprises, IT needs to step out from its back-office role and act as the enabler of business innovations. Yet, the conventional IT approach does not support the composable enterprise model primarily due to its inflexibility. Traditionally, corporate application portfolios are often limited, strictly aligned to past strategies, and lack the ability to operate at the pace of market changes. Indeed, a survey by OutSystems ^[4] indicates that the majority of companies spend 3 – 6 months developing web and mobile applications, cited by 61% and 60% of the respondents, respectively. Half a year may not seem too long, but in times of make-or-break such as the pandemic, delayed application development could easily threaten a company’s survival.

In order for IT to operate at the pace of market changes, building an application portfolio that is composable, flexible, and tailored to changing needs is essential, yet not enough. Being able to develop those individual applications quickly in a matter of weeks and not months is equally important. Here, low-code and gen AI emerge as key drivers for championing speedy application delivery.

The popularity of low-code has increased exponentially in recent years, with as many as 70% of surveyed organizations considering low-code as a core part of their businesses ^[5]. Prominent benefits brought by the technology include: 

Low-code offers a drag-and-drop feature that allows developers to drop components onto a canvas. This way, users can visually develop applications using simple logic and avoid hand-coding thousands of code lines. It also lets users reuse and merge pre-built functions to create customized applications without coding from scratch. According to a survey by Statista, 29% of respondents report a 40% to 60% reduction in development using low-code platforms compared to the traditional approach ^[6].

The ability to reuse components helps lower the amount of necessary testing, which in turn lowers time-to-market. This is because, with low-code, reusable components are tested beforehand, thus sparing new applications from undergoing the entire testing process. Given the benefit, 84% of surveyed enterprises have cited faster speed-to-market and reduced IT constraints as one of the key reasons for incorporating low-code in their operations ^[7].

Leveraging low-code allows business to better utilize their human resources as citizen developers (developers who are outside the formal IT departments) can be more actively involved in developing business applications. With predictions that 70% of new applications developed by businesses will utilize low-code platforms, the role of citizen developers continues to be highlighted, especially given the current IT talent shortage challenges ^[8]. 

Both AI and low-code have been praised for reducing application development efforts, though their approaches are vastly different from one another. While AI speeds up the development process by generating code based on natural language prompts, low-code offers a more visual approach by allowing users to drag and drop pre-coded elements. Despite the benefits, both lack certain capabilities that hinder effective application development. On the one hand, although AI offers high customization in application development with limitless functions, AI can only generate raw codes, which still requires users with adequate coding knowledge to effectively leverage the generated code. On the other hand, low-code provides more visual outputs and allows developers with limited coding expertise to comprehend and utilize them. However, these outputs depend greatly on pre-coded elements, have limited functions and low levels of customization.

Low-code and gen AI is a marriage made in heaven, as their benefits and drawbacks effectively complement one another. Incorporating gen AI could be a game-changer for low-code as it opens up new opportunities for higher customization. More than that, AI-powered low-code also helps speed up the already speed-up processes of application development. With low-code platforms, users can easily create applications by dragging and dropping elements and developing workflows. But AI-powered platforms such as Microsoft Power Platform take a step further by deleting all of these activities altogether and replacing them with simple prompts. It means that the platform can create applications with inputs as simple as users describing functions and problems in natural language. And that is just one of the endless possibilities created by the merging of low-code and AI. With leading low-code companies actively exploring the potential of AI, such as OutSystems and Mendix, exciting applications are undoubtedly underway.

Despite the urgency, navigating a feasible, optimized roadmap for adopting low-code and gen AI might be overwhelming, given the abundance of AI-powered low-code platforms on the market. Partnering with an experienced, end-to-end IT service provider would be an optimal solution. With over 25 years of experience and an extensive network of low-code partners, including OutSystems, PowerApps, Pega, and Mendix, FPT Software is proudly trusted by leading organizations, such as Honda and Olympus, to accelerate their low-code journeys. Learn more about FPT Software’s low-code/ no-code solutions here.