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The ROI of low code


The pace of software development has increased exponentially. Projects that used to be developed in years are now done in months. While the pace and the volume of work has certainly increased, most companies are now experiencing a huge talent crunch. A report by Nasscom-Zinnov, has predicted that India is projected to face a shortage of 14-19 lakh technology professionals by 2026. As compared to the current tech workforce in India, which stood at 47 lakh employees in 2021, the country needed 52 lakh tech professionals. This translates to a 21.1% technology talent gap. By 2026, as per the report, India is estimated to have 75-78 lakh tech professionals, however the requirement may be of 93-96 lakh techies, reflecting a gap of 14-19 lakh techies.

A significant percentage of this technology workforce is contributed by software development professionals. If there is a lack of quality software development talent, it affects the delivery of the software product or completion of the software project. The industry tries to address this gap by hiring inexperienced software development professionals who do not have the required expertise to develop code according to good software development practices. This too affects the software quality, which in turn, affects the project delivery dates. All these factors impact the total cost of the project in a big way.

The Impact of Low-ode Platforms

Can low-code platforms help? Let us look at some of the key factors where low-code platforms can help and also gauge the expected ROI of low-code platforms

Let us look at some of the key facts with respect to low-code, by studying the comprehensive 2022 Forrester TEI(™) study. The TEI study is a Forrester Consulting analysis that evaluates the financial impact of adopting a technology. It considers the cost, benefits, flexibility, and risk factors that affect the investment decision. The study is based on Forrester’s interviews directly with OutSystems customers using its high-performance low-code platform. Forrester Consulting then compared the results the customers reaped over three years with a composite, modeled organization based on the structure and resource characteristics of the interviewed organizations.

Cost Savings of 24%—Up to $4.3 Million—in App Development

While organizations are dealing with a worldwide developer shortage, some firms are able to maximize the productivity of their existing dev teams and boost collaboration between business and dev to get software delivered more often, just like digital natives organizations. These development cycle savings can be 24% of customer total benefits, or up to 4.3 million dollars in the TEI study.

Key high-performance low-code features that reduce developer effort and time include reusability (development teams can accelerate software development by reusing prebuilt components), and high-abstraction coding (full-stack coding can be both high-level visual modeling for collaboration with business and low-level coding favored by professionals like JS, C#, etc).

Cost Savings of 7%—Up to $1.2 Million—in Continuous App Evolution and Support

Applications developed with low-code platforms cost less to maintain and change by design. The study also showed that these savings continue to accrue year-over-year. These savings are typically above 7% of customer total benefits and reached up to 1.2 million dollars in the TEI study.The fundamental high-performance low-code features for these benefits are similar to those listed in the previous point, namely reusability, automation, and abstraction.

Incremental Income of $4.6 Million from Faster Time-to-Market of New Business Initiatives

By improving the efficiency and productivity of their developer resources, customers can launch new and impactful business initiatives to the market faster, such as customer-facing capabilities, as highlighted by one of the interviewees. This way, organizations also reap the financial benefits of those initiatives months faster than they would with traditional development approaches.

Cost Savings Amount to 38%—Up to $6.7 Million

With low-code platforms, organizations can shorten the duration of development projects and launch internal initiatives that improve the company’s agility and efficiency outcomes much faster. These initiatives include tools to replace manual and time-consuming activities, leading to cost savings of 6.7 million dollars.

Cost Savings of $765,000 by Replacing Legacy Applications

Organizations can also save hundreds of thousands of dollars from ongoing vendor fees by using low-code platforms to build new applications to replace legacy systems. Additional unquantified benefits include security, quality, scalability, augmentation and mobile capability.

Other benefits include higher-quality code and ability to augment staff with non-traditional development talent. Organizations can also leverage staff with technical experience that didn’t come from traditional development backgrounds.

In summary, the Forrester Consulting survey has revealed that high-performance low-code platforms can pay for itself in less than six months and deliver a 506 percent return on investment over three years. One must however, also remember that all low-code platforms are not equal and the above numbers and percentages are related to OutSystems’ low- code platforms. As the digital ecosystem continues to grow at a phenomenal rate, many organizations are looking to accelerate their software delivery strategies. The ROI and the business case for low-code platforms is proven and is only set to improve in a big way in the next few years.

(The author is Mr. Subrato Bandhu, Regional vice president, India, OutSystems and the views expressed in this article are his own)

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