Digital transformation promises simpler and more efficient processes within a company. There are many ways to achieve this transformation, but finding the best path is crucial because, in the future, smartphones, tablets, and everyday objects will seamlessly network with each other. A modern digital infrastructure is a prerequisite for this future. So, what should be considered when choosing the right path to becoming a digital company, particularly in terms of architectural and technical planning? What are the different approaches to implementation, and what advantages and disadvantages do they offer?
In-House Development, Standard Software, and Hybrid Platforms
These are the three key approaches to creating a digital company and infrastructure. Which of the three approached is the right choice for a company largely depends on the available resources, know-how and the requirements of the digital environment. Therefore, companies have to take the time at the beginning of a digitalization project to analyze which strategy offers the best chance of success and avoid potential pitfalls.
Custom Solutions vs. Standard Software
Building a digital company’s infrastructure from scratch is a big task, especially for large enterprises with multiple locations. Therefore, setting clear targets and creating detailed plans in advance is critically important. Selecting the right methods - such as agile development - can help ensure smoother coding and more targeted efforts. When done successfully, the outcome is a customized digital environment that ideally integrates seamlessly with existing company processes.
However, in-house developments remain costly and time-consuming, from the programming phase to ongoing maintenance. Maintaining and updating in-house systems demand long-term attention and the involvement of various employees. Moreover, there is a reliance on the expertise of a limited number of individuals who understand the software’s intricacies. A significant risk also lies in interfacing with third parties. If the in-house IT department cannot keep up with the latest versions from third-party providers, there’s a real danger of security vulnerabilities and downtimes, which can significantly impede the digital company’s transformation journey. In-house developments are thus as challenging as they are promising, with considerable scope for failure.
Using standard software to build a digital company is much less complicated, as the software provider handles maintenance and updates to keep the system up to date. However, it’s essential to note that standard software might not align as well with internal processes as a custom-built solution, often requiring fundamental changes to established business practices. Nonetheless, the risks are considerably lower, and although the costs are high, they remain manageable. Decision-makers should carefully assess the functional scope of the solution and compare costs and expenditures. After all, it doesn’t always make sense to pay high prices to overhaul established processes from scratch just to avoid having to take care of the system itself.
“In the end, a balance must be found between user-friendliness, stability, and security”
Rolf Gebhard Stephan
CEO Axon Ivy AG
The Hybrid Solution
The third approach to becoming a digital company is to combine the best of both worlds by blending in-house development with standard software. A Platform as a Service (PaaS) provider offers a basic framework that the company can then customize to meet its specific needs. While independent applications – whether developed in-house or not – can only be operated along defined paths, PaaS systems empower employees with low-code and no-code tools to design these paths themselves. This enables IT departments and other divisions to implement digital transformation initiatives more effectively, tailoring them to meet the specific requirements of their customers.
Modern PaaS platforms also offer standard connectors, allowing easy integration of standard systems such as SAP, Oracle, Microsoft, or Salesforce, as well as third-party programs. Even legacy systems – in other words, parts of the old IT landscape – can be integrated into the new environment. Additional interfaces for integrating document generation via ESB or technologies like blockchain and digital signatures further enhance design flexibility. The result is a process structure that can be adapted individually to suit the needs of the digital company.
The most suitable approach depends on the specific requirements in each individual case. The more unique these needs are, the more a PaaS system or in-house development makes sense. However, in the end a balance must be found between user-friendliness, stability, and security.
Future-Proof Platform Concepts
Companies are already facing the challenge of ensuring an optimal workflow, despite and especially with the rise of remote work. The advantages of PaaS platforms and cloud concepts are particularly evident in this context and reflect modern thinking about what it means to be a digital company. Whether colleagues work in the next office or twelve time zones away makes no difference to the cloud.
According to an IDC study from 2019 that examined the prospects of public cloud computing models, the PaaS concept in particular ensures sustainable growth by enhancing the customer experience and extending the digital transformation beyond everyday office work. A future in which the refrigerator sends a car automatically to the store to go shopping is no longer unimaginable, but rather a logical consequence of how digitalization is progressing. Platforms offer a suitable framework here and play a significant role in shaping the digital world of tomorrow.
