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Any business looking to grow and compete in today’s digital market has some important concerns when evaluating its internal digital systems:
- The systems need to be scalable to handle an increasing amount of customer data that comes in through many different channels.
- They must be able to effectively analyze and utilize that data, coordinating goals and strategies across different departments and teams.
- Any modernization updates should be as efficient as possible, addressing the specific needs of the organization to save worker time and reduce costs.
Approaching these concerns is fairly straightforward but acting upon them can be a tall order for some organizations, especially larger enterprises that have a wider customer base, more departments and teams, and more complicated systems. The scope and the cost of that challenge is why some enterprises will stubbornly rely upon custom-developed legacy systems for years – even if it’s costing them more in the long term.
A report in IEEE Spectrum found that, from 2010–2020, “corporations and governments worldwide have spent an estimated $35 trillion on IT products and services. Of this amount, about three-quarters went toward operating and maintaining existing IT systems. And at least $2.5 trillion was spent on trying to replace legacy IT systems, of which some $720 billion was wasted on failed replacement efforts.”
Money spent on maintaining legacy systems is a resource that could be spent on improving customer service, research, and development, or attracting new talent. Even worse, legacy systems don’t usually have the capacity to take full advantage of the newest trends and features of modern enterprise applications – all of which are designed to optimize workflows and improve the customer experience.
If you truly want to offer a best-in-class experience for your customers, then you’ll need to consider how to best leverage enterprise applications.
What are Enterprise Applications?
Enterprise applications (EAs) are defined by Gartner as applications or software that “are designed to integrate computer systems that run all phases of an enterprise’s operations to facilitate cooperation and coordination of work across the enterprise.” Also known as enterprise software or enterprise application software, EAs are meant to provide services for entire departments across mid-to-large-sized enterprises rather than existing to just serve the needs of individual users.
EAs integrate core business processes (e.g., sales, accounting, finance, human resources, inventory, and manufacturing) and are usually built to handle an organization’s finances or customer management. EAs aren’t the same as an enterprise technology stack, which refers to an organization’s digital architecture and front-end and back-end technologies, though some applications can blur the line between that distinction.
- Examples of Enterprise Apps include:
- Automated Billing Systems
- Business Intelligence (BI)
- Customer Relationship Management (CRM) platforms
- Enterprise Resource Planning (ERP)
- Interactive Product Catalogs
- Human Resource Management
- Supply Chain Management
- And more
Admittedly, with such a wide selection of software, the definition of what qualifies as an EA is broad. It’s likely that most organizations already have at least one enterprise application up and running. The term is mostly helpful in distinguishing EAs from the larger and more well-known field of web and consumer applications.
What Distinguishes Enterprise Applications from Other Apps?
The “apps” that most of the population is familiar with are the web and consumer applications accessible through mobile devices and personal computers. These are designed to serve individual needs and offer a wide array of functions, from entertainment to helpful services.
Overall, the sheer size of the consumer application market is triple that of enterprise application development. Projected revenue for EAs in 2021 is $229 billion, whereas the projected revenue for consumer applications in 2021 is $693 billion.
Beyond the specific business purposes of enterprise applications, there are some additional factors that differentiate enterprise apps from more common apps:
- Determining ROI – Web apps require a calculation of the lifetime value of customers that use the app. ROI for EAs are often more involved, including a consideration of business objectives, selecting appropriate KPIs to measure those objectives, and then a means of calculating returns.
- Enabling Interoperability – Most web applications can operate independent of other applications. While EAs are also able to operate by themselves, their greatest asset comes through sharing data and integrating with other EAs.
- Native Scalability – Consumer applications may be more limited in scope and require updates or new versions to handle additional data input or added features. EAs are expected to grow with the needs of an enterprise and be able to handle ever-increasing amounts of data sets.
- Development Costs – Though some can be costly, for the most part consumer applications are developed at far less expense than enterprise apps. Due to their size and capabilities, EAs require far more planning and testing to ensure there are fewer errors or bugs. As a result, EAs are often more expensive than consumer apps, either through a larger upfront fee or a subscription-based payment model.
It’s the prospect of this larger investment that can dissuade organizations from seeking to update their existing enterprise applications, leading them instead to make the most out of legacy systems for as long as possible. Unfortunately, staying with a legacy system has greater drawbacks than background costs, as it can leave an organization unable to take advantage of modern advances and technological trends.
What Are Current Trends in Enterprise Applications?
Enterprise application development is constantly moving towards greater efficiency and connectivity. The ideal enterprise system would:
- Control all major business processes in real time with minimal downtime.
- Exist on a single software architecture accessible from any location across a variety of networks.
- Allow a seamless connection to all relevant data regarding suppliers, business partners, and customers.
- Enable employee and customer communication across all channels.
- Automate manual tasks to optimize efficiency and allow faster turnaround times.
- Offer predictive assistance and advice on everything from optimal supply chain routes to the next marketing promotion.
There’s not yet one application that provides all these features, and the complicated needs of individual businesses mean that such a comprehensive system may always be just out of reach. However, adopting cloud-based Software as a Service (SaaS) or Platform as a Service (PaaS) applications can provide services that are easier to access “on-demand,” can be more easily updated, and offer greater stability and data security.
Here are some of the most important enterprise application trends that cloud-based services are enabling:
- More integration with mobile technology and the IoT.
Modern applications that feature the ability to integrate with other devices – either mobile or IoT – provide unique advantages in convenience and speed. This feature allows for a greater ability to gather intelligence, reply to customers, and work in real-time from remote locations. An application such as Dynamics 365 Field Service allows for faster response for your on-the-ground employees.
- Effective use of machine learning AI.
Access to greater computing power provides access to powerful machine learning AIs that can speed up processes and operations, respond faster to queries, provide better predictive models, and offer a more comprehensive look at multiple data sources. A data and AI service like Azure Databricks enables an accelerated analysis of data at any scale, while applications such as D365 Customer Insights can identify customer patterns and make correlations to better recognize sales opportunities and address problem areas in customer service.
- Assistance from voice driven enterprise software.
AI enabled natural language processing (NLP) services allow for dynamic new capabilities such as call transcription, sentiment analysis, and smart recommendations on similar cases. Native voice integration combined with AI driven topic clustering allows instant visibility into all different channels and what’s driving customer satisfaction (or dissatisfaction). Services such as Voice for Dynamics 365 Customer Service can provide a consistent experience across both voice and digital messaging channels for live and virtual customer service agents to work effectively across multiple channel types.
- Enhanced communication through augmented and virtual reality.
New advances in mixed reality technology provide more than an enhanced ability to connect remotely: They allow for a specialized display of data in tandem with a holographic representation of important concepts. Mixed reality technology like HoloLens 2 in coordination with applications like Dynamic 365 Guides can provide step-by-step visual instructions, including features like decision trees to provide additional context and guidance while on the job. Displaying digital images in a real-world environment can highlight important details to better draw attention and offer instruction.
- Ability to optimize the user experience.
Improved usability means faster responsiveness from employees and easier on-boarding for new hires. Enabling your users to build custom-developed applications lets them directly address their own concerns and build more effective solutions. Power Apps allows for the development of custom business apps that encourages creative and unique solutions that best fit specific department or team needs. More intuitive interfaces, helpful graphical displays, and greater interactivity creates a friendlier and more optimized UX.
These trends only scratch the surface of what future innovation can offer for operational efficiency and the overall customer experience. If businesses want to leverage these features for their own enterprise applications, then they will need to modernize.
How Can Companies Modernize Their Digital Infrastructure?
What makes it so difficult for legacy systems to take advantage of these newer features and functions? It’s actually a few things:
- There comes a point where older software is no longer officially supported by the publisher, meaning an end to official fixes and updates. Even if a software continues to be managed entirely “in house,” eventually the software is so outdated there’s no one left on the team who is able to “speak the language.”
- It is harder, if not outright impossible, for some older applications to integrate with modern systems. The older systems simply weren’t designed with certain functionalities in mind and likely weren’t built with the intent to scale beyond a certain point.
- Older tech is not compliant with the latest industry standards and regulations. Besides these systems’ inability to integrate with newer applications, they present a huge security risk as they’re more vulnerable to breaches and data hacks.
If an organization is interested in leveraging its EAs as best as possible, then it needs to examine which systems need updating, which should be replaced, and what are the possible options for moving forward. Here are the three most important steps for modernizing:
- Start by performing an assessment on your current architecture.
- Are your current enterprise application systems performing up to your businesses’ needs? Are the current systems too slow to process? Are they too cumbersome to operate due to things like an unintuitive UI or poor usability?
- Is your IT department spending a lot of valuable time troubleshooting problems with integration or fixing errors?
- Does your data require the full control and additional security of an on-premises system, or could you save money and resources through adopting Infrastructure as a Service (IaaS) or Platform as a Service (PaaS)? What would be the benefits of having the lower upfront cost, scalability, and ease-of-use of a cloud-based system?
- Project your business value by forecasting and estimating the investment requirements and returns of adopting new applications.
- Determine which applications are to be updated or replaced. Will it just be a select few? Most applications? All of them?
- How will any legacy code be handled? Is it a simple “lift and shift” movement of the old data to a new system, or a more comprehensive “rip and replace” that rebuilds everything from the ground up?
- Ensure that all corporate data security and user privacy are prioritized. How will your employees, IP and customers be protected from unauthorized use, malware, and the improper storage of data?
- Scope out the long-term ROI for the new systems and estimate how long you’ll need for architecture integration.
- Get everyone on board for the conversions / updates in order ensure a smooth transition. Consider developing a continuous improvement guide to monitor the application’s effectiveness over time and determine if additional adjustments need to be made.
- Develop a strategy for the best path forward.
- Will you employ out-of-the box solutions for new applications? Will you develop a proprietary enterprise application? If so, does your IT have the means and knowledge to implement it on-time and under budget?
- How will your existing data be migrated and what upkeep services will be utilized to ensure it’s scalable and useable for future needs?
- How will you train your users to use the new features and functions of the applications? Do you have a plan in place to ensure that best practices are followed?
There’s a lot to consider, and it can put a strain on your team to enact change like this on top of their existing responsibilities. Partnering with an expert in digital modernization can help.
How Hitachi Solutions Can Help
As a recognized Microsoft Partner of the Year, Hitachi Solutions is a proven partner in helping organizations develop and adopt new applications. Our expertise in Unified Business Operations helps you create a modern digital ecosystem that allows you to leverage the advantages of modern enterprise applications.
We know that every company faces unique challenges to deliver better products or services more quickly while maintaining a cohesive customer experience. We can help you determine which applications to adopt and how to integrate them, prioritizing what makes your business unique and providing more value for your customers.
Contact us today to learn more about how our Digital Compass initiative can streamline your technological transformation.