How to Bridge the Gap Between COTS and Custom-Built Solutions
Traditionally, when organizations need a new digital solution, they often have to choose between a standard off-the-shelf software package or building a custom solution themselves.
Advantages and disadvantages for both options are clear: a standard package offers all the necessary – or most – functionalities out-of-the-box, but for adjustments or extensions one is completely dependent on the supplier (often at a hefty price tag).
With custom-building, you can build exactly what you need and are completely flexible in adjustments but need to have (or hire) all the necessary technical skills and expertise in-house and often have to reinvent the wheel.
In the end, it often turns out to be a choice between two sub-optimal options. How many organizations have fallen into the trap of purchasing a standard package solution and eventually – often under pressure from business users – made custom adjustments to the core of the solution? The result is usually a very expensive one-off solution, which can no longer be maintained or upgraded to the latest version.
On the other side – how many organizations thought they could prevent this by setting up their own IT organization and then built a custom solution themselves? Often fairly small and manageable in the beginning, but as time progresses and the solution grows, this slowly degenerates into a big monolithic solution that cannot be maintained anymore, an IT/maintenance organization that is much too large with expensive external contractors, and a TCO that is much higher than originally budgeted. Made wise by trial and error, organizations therefore choose in their architectural vision to implement their supporting business functions with standard packages (80% fit-4-purpose is also ok) and only to realize their differentiating primary business functions with their own custom solutions.
Build and Buy with Low-code
As a first step in the right direction to bring both extremes closer together and to overcome the disadvantages of both options, low-code (or I prefer to say model-driven) software has been introduced to the market. Many standard off-the-shelf package solutions now offer (to a greater or lesser extent) a form of low-code or no-code within or on top of their platform.
With the paradigm of ‘keep the core clean’, everything that is not standard available can still be easily added this way. For complete custom solutions, it is now possible to adopt modern Low-Code Application Development platforms such as Mendix with which almost everything that can be programmed in traditional programming languages can now also be visually modeled with modern WYSIWYG tooling. With the advantage that the die-hard technical and IT matters are already taken care of by the platform, and the developer (or as is becoming more and more common, the business analyst) can fully focus on building and validating the required functionality and usability.
Build vs buy is growing closer together, resulting in hybrid solutions with standard ‘core’ modules supplemented with low-code custom components.
What’s next? Low-code-built adaptable templates
Is this the end station of this evolution? Clearly not.
Although low-code makes it much easier and faster (and above all less technical) to develop customized digital solutions yourself, it does not yet offer the full off-the-shelf functionality and industry expertise of commercial off-the-shelf solutions. This can be in the form of ready-made data models, business processes, smart algorithms, ready-to-use integrations, or modern customer interaction design patterns. To meet this, you see companies such as Mendix increasingly focusing on pre-built, customizable applications options from kick-start templates for specific functional modules up to complete vertical solutions marketed by their ISV partners.
Take the HumbleBee solution for Insurance as an example: it has been fully developed in low-code Mendix technology by Mendix partner Valcon. This end-2-end Adaptive Solution for insurance consists of several functional modules and concepts that Valcon has developed over the past 10 years for various customers in the insurance world and beyond. One of the core concepts of HumbleBee is the Dynamic Case Management (DCM) and Business Rule Management (BRM) functionality developed by Valcon.
This allows flexible quoting, underwriting and claims processes to be set up and tailored for specific insurance product lines. Unlike standard workflow functionality, DCM/BRM is ideally suited for insurance applications with long-running event-driven cases, Straight-Through-Processing automation, and exception handling for specific products or customers. DCM/BRM is native in modern BPM platforms but is not available out-of-the-box in a low-code platform like Mendix. By using HumbleBee as an Adaptive Solution, the organization gains both the out-of-the-box functionality of a standard off-the-shelf solution and the flexibility and adaptability of a low-code custom solution. In practice, this adaptability is always necessary in the insurance industry to integrate the solution into the existing IT landscape or with external service providers, and to tailor the solution to support the organization’s specific products and processes.
Adaptive Solutions bring together the benefits of both build and buy. Standard out-of-the-box functionality is available and configurable by the business without the prerequisite knowledge of the underlying technology. On the other hand, the solution is fully customizable and extensible (either as a managed solution by the ISV supplier or by the organization itself as a kick-start template). The underlying low-code technology makes adapting and integrating the solution easy and manageable.