By Sateesh Seetharamiah, CEO of Edge Platforms, EdgeVerve
Leaders in the business world are grappling with a technology conundrum. Traditionally, corporate IT has been centered around bolstering the digital core with essential processes. Yet, an evolving trend has seen business innovators increasingly turn to cutting-edge technologies at the digital frontier. This shift has led to a rift between the deeply embedded digital core and the more fragmented, decentralised edge applications and tools. To optimize resource utilisation and enhance scalability at the edge, it’s crucial for IT to forge a closer alignment with external innovations. Adopting a platform-based strategy offers a promising solution to bridge this divide.
The dichotomy of core and edge
The backbone of enterprise IT has always been its record-keeping capabilities, closely linked with ERP, CRM, inventory management, and other data-centric systems. While these core processes have seen upgrades, often transitioning to cloud-based solutions, they largely remain insular and rigid, particularly in functions deemed as commodity tasks, such as accounting or control systems.
Contrastingly, technologies emerging on the periphery in recent years are characterized by their openness and flexibility. It’s often the tech-savvy business units, rather than the central IT department, that experiment with automation and AI tools, leading to innovations. These digital edge initiatives, while yielding positive outcomes, tend to be limited in scope. For instance, low-code and no-code (LC-NC) platforms enable less technical personnel to automate operations and develop bespoke applications. However, the absence of core integration, a process requiring advanced IT expertise, limits scalability. This situation results in isolated innovation pockets that, although they have the potential to enhance customer experiences, augment human capabilities, and foster business resilience, remain disconnected from the digital core, trapping their true value.
Elevating enterprise IT with platform strategies
Now is an opportune moment to reevaluate the value proposition of enterprise IT. McKinsey & Company’s research indicates that despite 90% of organisations embarking on digital transformation journeys, only a fraction of the anticipated revenue benefits have been realized. This gap underscores a misalignment that needs addressing.
The IT and consulting industry suggests a paradigm shift away from traditional ERP-centric models towards a more dynamic platform organisation. This transition involves isolating key ERP components that align with strategic business objectives, creating an intermediary layer between the core and peripheral applications, and selectively tailoring the ERP system to enhance value.
An alternative strategy prioritizes the digital edge, where IT departments collaborate with business leaders to identify and prioritize edge applications that align with strategic goals. This concerted effort aims to foster greater efficiency and scalability by focusing on standardization, connectivity, and data governance:,
• Standardisation involves harmonizing the diverse automation tools and techniques across business units, from RPA and API to script-based solutions, reducing complexity and facilitating integration with core digital systems.
• Connectivity is crucial for setting up a comprehensive edge platform with extensive data connectors, enabling seamless interactions between new and legacy systems, thereby extracting maximum value.
• Data Governance requires the unification of data definitions across disparate systems and the extension of governance protocols to the edge, covering aspects such as data lakes, privacy, cross-border data flows, and security.
Real-world applications
A unified approach to core and edge integration can streamline operations and leverage combined technological capabilities. Examples include:
• Order management: Utilizing a digital edge platform integrates near real-time internal and external data, ensuring seamless order fulfillment operations across the value chain, thus preventing business losses.
• Mortgage collections: A new edge platform harmonizes disparate data sources and utilizes AI for improved mortgage collection processes, allowing for a consolidated view and efficient data management across multiple core systems.
• Book closings: Automating financial book closings through a digital edge platform surrounding multiple ERP systems simplifies the process, significantly reducing manual effort and enhancing the accuracy and speed of financial reporting.
Overcoming platform challenges
While the core-edge platform concept is appealing, its implementation is not without hurdles. Standardising tools and methodologies imply choosing winners and losers, and scaling innovation requires a delicate balance. Data integration presents another set of challenges, including ownership and maintenance of connectors and APIs. Moreover, the emerging field of platform engineering, identified by Gartner as a key trend, highlights the need for a new IT discipline focused on developing reusable components and services that facilitate integration and innovation.
Navigating the digital divide
The proliferation of personal AI, APIs, data pipelines, and LC-NC technologies has led to a fragmentation of edge innovations, isolated from core business processes. The platform approach emerges as a strategic solution to this challenge, enabling the integration of core and edge technologies. By leveraging the strengths of both, businesses can unlock the full potential of digital innovations, enhancing customer interactions and operational efficiencies in an intelligent, automated manner.
