AI reshuffles the cards in software engineering as well

On the one hand, the development of proprietary software systems is becoming increasingly standardized thanks to cloud technologies and automation through AI (artificial intelligence), and on the other hand, there is movement in the market on the part of the standard software providers, since the users of ERP or CRM solutions generally remain loyal to their traditional providers, but with new technologies such as AI or machine learning they are quite prepared to think outside the box and give third-party providers a chance.

AI and machine learning, in particular, are reshuffling the cards in the market as they are able to further automate and industrialize software development and maintenance.

As the current provider comparison "ISG Provider Lens 2019 - Application Development & Maintenance" (ADM) shows, the wheat is currently being separated from the chaff on the provider side:

The large providers in particular have already integrated AI technology and cognitive analytics capabilities furthest into their portfolios. The smaller providers, on the other hand, must be careful not to fall behind in the face of this development.

Especially since, in addition to applications, entire business processes are now coming into the focus of AI. Major providers already offer AI functions that analyze, evaluate and improve business processes.

But even mid-sized ADM providers can, in principle, keep pace here in the long term, as they have access to AI systems via third-party providers such as IBM's Watson, for example, and can integrate these into their own services.

In the industrial environment in particular, ERP inventory systems such as SAP continue to dominate. But the need for so-called "next generation" ADM is also unmistakable in the manufacturing industry - especially in actual production and supply chain optimization, where cloud, IoT or machine learning technologies are increasingly being used.

For example, numerous IoT solutions now enable predictive maintenance, a self-optimizing production line, or automated inventory management.

What's more, the concept of smart factories is about to revolutionize the entire production process in the context of cyber physical systems (CPS). The Industrial Internet of Things (IIoT) - keywords 5G and edge computing - is not only making production more agile and efficient.

They also lead to increased compliance of production processes and better quality management with a comparatively transparent and predictive cost framework. Accordingly, the demand for dedicated industry know-how, automation and industry-specific solutions is increasing.

If companies no longer find this sufficient with their traditional (ERP) providers, companies such as IBM, Capgemini or Atos are not only waiting in the wings on the ADM side, they are also providers specializing in the manufacturing industry. They are already gaining market share.

With the appropriate industry and process knowledge, IT service providers and their developer forges are able to bring customer wishes to life in no time at all thanks to cloud development platforms and program store floor-compliant applications based on the latest standards and thus connectivity.

Furthermore, the service providers also have the knowledge of already available apps from cloud marketplaces or app stores as well as dedicated IoT platforms. Based on increased standardization, these can more and more often replace a monolithic complete solution that often did not meet business department requirements.

As a result, Manufacturing Execution Systems (MES) connected to an ERP such as SAP also come under pressure, as they act as a catalyst and link between the sensor or production control and process management level with the operational and corporate management level.