How Accurate Are the Claims of Outsystems on the ROI of Low Code?

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Executive Summary

Low code vendors like Outsystems make enlarged claims around their low code applications.
Let us review the evidence for these claims by Outsystems.

Introduction

Outsystems is one of the top low code development environments. We review several articles on what Outsystems claims about the ROI of low code.

See our references for this article and related articles at this link.

Article #1: Quantifying the ROI of Low-Code: Too Good to Be True?

The following quotes were of interest from this article.

What is the ROI of low-code platforms? If you’re asking yourself this question, you’ve probably read all reports and articles about how low-code helps companies unlock digital transformation. And maybe you’ve thought that this low-code thing sounds too good to be true.

I don’t blame you. I still remember when the so-called 4GL, CASE tools, and early RAD tools popped up, and unrealistic promises were made. But, technology evolves, and today a new breed of enterprise low-code platforms has begun an inexorable march on the software world. These platforms, identified by Gartner as enterprise low-code application platforms (LCAPs) offer what was once promised but not delivered‒built-in capabilities that support the rapid development of all types of applications and core systems with scale and security.

Just because earlier approaches did not meet expectations does not mean that low code will pay off. This is just what Outsystems would like their prospects and customers to believe.

Gartner Knows About Development

“By 2024, LCAPs will be responsible for 65% of all application development activity.”
Gartner, Inc. “Low-Code Development Technologies Evaluation Guide;” Paul Vicent, Mark Driver, Jason Wong, February 26, 2019

What is not stated by Outsystems is that Gartner has never been a reliable source of information on development and that Gartner has been collecting its “toll” from low code vendors.

Secondly, there is really no way for Gartner to know this. Gartner makes unsupported claims like this all the time. See the article Disregarding Gartner’s Deeper Technology Insights and Predictions to see Gartner’s accuracy on predictions. This type of claim is designed to be constantly repeated by the vendors — as it is being repeated in this Outsystem article here. No one ever goes back and verifies if what Gartner said came true, so Gartner is free to make any evidence-free claim, and they will not be held responsible.

Forrester is a Good Source of Information on Development?

So, if you’re evaluating the low-code market, The Forrester Wave™: Low-Code Development Platforms report is a great starting point to understand which are the vendors with the strongest offer.

Here Outsystems is referring readers to a report that they have co-funded. See our analysis of this Forrester report in the article Is the Forrester Wave on Low Code Accurate?

Benefits of Low Code….According to Outsystems

At OutSystems, we have seen first-hand the benefits low-code application development brings to our customers in terms of speed, time-to-market, and competitive advantage. Here are some examples:

Shorter development times and, consequently, lower development costs
Faster time-to-market

Reduced hiring costs, as low-code allows you to make the most out of existing resources, reducing the need to hire highly paid and specialized resources

The agility to respond to the market and make changes faster

Naturally, every vendor says this about their product.

Outsystem ROI Case Studies

Outsystems goes on to list several case studies.

Burton: 10x ROI in Revenue, 3x faster development time.
Grupo Marista: 8 Month ROI (Roughly a 150% ROI), 75% reduction in solution development time.
Worchestershire County Council: 442% ROI
Prosegur: 18 Month ROI (Roughly a 66% ROI), 50% faster to market.
Eneco: 258% ROI
MicroMain: $500,000 in development savings

It is impossible to verify any of these companies, and even if every one of them were true, they are cherry-picked. So there is no cobbling of lower ROI case studies or negative ROI case studies to determine an average.

And notice that this claim from the Burton case study is then repeated in the Forbes article What You Need To Know About The Low-Code Market.

“With low-code, innovative apps can be delivered 10x faster and organizations can turn on a dime, adapting their systems at the speed of business,” said Paulo Rosado, who is the CEO at OutSystems. His firm is one of the top operators in the sector, with more than 1,000 customers.

Would Paulo Rosado have any reason to exaggerate? Yes, he does. However, this quote is presented by the author of this article as if Paulo Rosado is some independent source of information.

This is in an article in Forbes, but Forbes allows its website to be filled with articles by “contributors” who pay to contribute.

Article #2: Top 5 Benefits of Low-Code

In this article, Outsystems makes the following claims.

Of all the benefits of low-code development, the ability to accelerate the delivery of new software and applications is the most important. In a recent blog post, Why You Need To Know About Low-Code, Even If You’re Not Responsible for Software Delivery, John Rymer of Forrester wrote that low-code offers the potential to “make software development as much as 10 times faster than traditional methods.”

This is back to using Forrester as a reference, which Outsystems paid. Secondly, 10x is an extremely high multiple of improvement.

Many factors control development efficiency. A few examples include:

The accuracy and finality of the requirements.
The development language match to the requirements.
The developer skill in the language, and the experience they have in developing in that area.
Management of the project and development resources.

One of the components would be changed, and productivity would increase that much does not recognize other factors’ bottleneck.

For example, does requirements gathering also increase by up to 10x because of low code environments?

In the following quote, Outsystems provides these reasons for the great speed increase in development.

Here are some of the capabilities that explain why developing apps with low-code is so much faster:

Drag-and-drop functionality, pre-built user interfaces, and models for business processes, logic, and data models enable the rapid development of full-stack, cross-platform apps.
Easy-to implement APIs and connectors integrate with third-party tools that developers already use, so no time is lost due to a learning curve.

One-click application delivery automatically tracks all changes and handles database scripts and deployment processes, eliminating many time-consuming deployment and operations processes.

Well, there are many counterpoints to these points.

For example, some development languages are good at particular things. Does a low code environment replace all of these things?

Multi Experience is a Thing?

Previously I mentioned that low-code delivers what you need to enable customers to interact with your business—their way. Independent research analyst firm Gartner calls this “multiexperience,” and it is a really critical benefit of low-code. With low-code, you start by delivering brilliant omnichannel customer experiences that rival those of the leaders without the big budgets and expensive development teams. But then it gets better.

Mulitexperience development offers pre-built templates, automated refactoring, and easy chatbots and and more so that you can ensure that all the ways that customers touch your business are consistent, Customers can transition between different forms of engagement and interaction without having to relearn or duplicate steps. Low-code speeds up the process and removes the complexity of providing an optimal experience to every customer or user every time.

What does development have to do with “enabling customers to interact with your business — their way?”

These two paragraphs are marketing fiddle-faddle.

Powering Up Low Skilled Developers?

The reason for that is that most organizations still struggle to hire the skilled and specialized developers they need to pursue their digital transformation goals.

The speed and development simplicity of low-code enables junior developers and tech enthusiasts without a strong background to build apps as if they were full-stack developers. Just as importantly, it empowers skilled developers to work more efficiently, so they can focus on more complex, less mundane aspects of programming.

This is the constant claim of the low code vendors.

However, you can’t replace developer quality with low-level code tools. Secondly, there is a tremendous amount of waste in IT. When companies waste their money on bad purchases or hiring Accenture or Wipro, it is difficult to take the “limited resources” argument very seriously.

Notice Outsystems partners with Accenture. So let us check Outsystems’ inconsistency. Outsystems is serious about development productivity when they are willing to partner with Accenture and implement projects using OutSystems?

This means that Outsystem’s dedication to productivity in development must be fake.

No More Shadow IT?

Low-code also dispenses with shadow IT, a term that describes when unsanctioned business users build apps to use in their daily work but without the knowledge and approval of the IT department.

With its focus on innovation for all, low-code offers ways to bring stealth development out of the shadows. Business users who are developing simple apps with low-code can follow best practices and avoid common pitfalls during application development.

It isn’t easy to see how this is true. What changes is the tool that is used, in this case, Outsystems?

The term “innovation for all” is where non-developers are developing, and there is not much evidence of this being a good thing.

This entire argument made by Outsystems is quite flimsy, and the proposition that because a person is using Outsystems is following “best practices” is the type of thing that SAP marketing tries to pull over on prospects.

One System To Rule Them All?

The top 5 benefits of low-code covered in this post are delivered by purpose-built applications that include a low-code framework, tools for multiexperience development, and some automation, integration, and impact reporting capabilities. The problem with these purpose-built application platforms is that, inevitably, a time comes when the solutions built with them need to evolve in a direction the platform does not support or a less experienced developer injects a problem into an architecture portfolio. At that point, all the benefits become moot as development grinds to a halt.

To avoid the low-code breaking point, you need a modern application platform. This type of platform goes beyond offering low-code as a substitute for custom application development and delivers everything you need to develop serious enterprise applications that differentiate your business.

Like low-code, a modern application platform offers visual development of all layers of an application, including user interfaces for any device, integration, data models, business logic, and workflow, and it also enables the extension of an application with custom code. However, it also:

Unleashes the creative potential of teams of business and IT users with whole-team cross-functional collaboration that capitalizes on developer knowledge and business expertise
Automates repetitive, mundane tasks and guides junior developers through full-stack development with AI-assisted development

Includes built-in automated governance from a central console so IT teams can identify and fix trouble spots in infrastructure, environments, applications, IT users, and security.
Future-proofs applications with an AI-powered change engine and a state of the art runtime that makes it easy to evolve applications as technology evolves.

This is a big part of a vendor’s strategy to take over their accounts and install lock-in. As is normally the case, once a vendor becomes sufficiently successful, they switch from delivering a point solution and move into providing some platform that supposedly has all of these stupendous benefits. This platform then locks the customer into using the vendor’s technology and then blocks out other vendors and other avenues.

Development, unless one uses a proprietary language like SAP’s ABAP, is an open environment. The languages are public, tools like IDEs, text editors, etc., are inexpensive and provide a high degree of freedom and lack of lock-in to the developer. With cloud services, the developer is free to connect to cloud APIs and leverage what they need. That all changes as soon as you buy into a platform. SAP wants to push their customers to develop in SAP Cloud. Salesforce wants to push customers into using the Salesforce Development Platform. Each vendor tries to push customers away from the superior and free and open development available to companies and anyone by locking customers into a platform.

It would be one thing if Outsystems were only promoting its low code solution. This quotation above illustrates that they have larger designs than that and want to use their low code environment as a gateway drug to their locked-in platform. This is a major red flag and is a strong argument against getting involved with Outsystems.

A Developer’s View of Low Code

The following is a perspective on low code provided by an experienced developer that is rarely reflected in the media coverage of low code.

As I see 70-80% of developers mostly fix bugs from another developers. es, serving of the technical debt is more than 50% of time on any project. When business need new functionality somebody usually need to transform existing one, but not create new one from the scratch. AGILE has given the IT industry excuse to not write and maintain documentation.

With low-code picture even worse. (on the topic of bugs and debugging)

This kind of solution cannot be effectively extended. So, to implement a proof of concept you can use about any technology, but the challenge is to stay with this stack for a few years.

On my opinion such solutions are good for kids from 5 to 8 years to learn programming logic before a normal programming language.

The main issue with low-code is when something goes wrong. At this moment nobody knows how to debug “arrows and rectangulars” (that is the code is encapsulated in the application, and is not just read in the plain language) and find the root cause. – Denis Myagkov

Debugging is one of the most important processes in development. And the fact that low code environments are designed to be used by many people who have low programming skills, means they will generate a large number of bugs. Any environment that does this, but is also restrictive in allowing people to debug is a problem.

Article #3: What’s the Real Business Impact of Low-Code Application Development?

Let’s get to the facts: you don’t need to be a rocket scientist to know that by cutting your app development in half, you win the bandwidth you need to innovate and go to market faster. That’s why, from Forrester to Gartner, experts are looking into low-code application development platforms as an accelerator of digital transformation. But what’s the real ROI of those platforms?

I don’t know if these can be called facts. These are conjectures. A fact is a verified event. This sentence could say, “let’s get to conjectures.”

Next, Outsystems references two IT analysts that they paid in Forrester and Gartner — both of whom know close to nothing about development and simply have their hands out to vendors to publish any study or white paper, and then references another one in Nucleus Research.

Nucleus Research Weighs In

In three insightful case studies, Nucleus Research explores how three different companies selected, deployed, and adopted OutSystems, along with the outcomes.

Download this content bundle to learn how:

Eneco Group used OutSystems to enhance its customers’ digital experience with an average annual benefit of €3,429,563.

Ricoh Singapore Pte Lda tripled the speed of developing critical business applications and achieved payback in just 6 months.

Worcestershire Council incorporated OutSystems as a part of its strategy to reduce costs and saw an ROI of 442%.

In the article, we cover How Likely is it that the Often Quotes Nucleus Research CRM ROI Estimates are Correct?

After 2007, Nucleus Research’s integrity fell as it became more sales-oriented. Its ROI estimates have been increasing across the boards. See how Nucleus Research’s ROI continues to increase.

The technique followed in each case is Nucleus Research receives cherry-picked examples or case studies from the vendor that pays them. They then report on those cherry-picked examples as the “study.”

My First-Hand Experience with Outsystems

I tried using Outsystems.

After a week, I was not able to build anything of significance. And as I used it, I began to see its disadvantages versus traditional coding. I have worked with good developers, which has given me an appreciation for how developers go through their process. And I would not want a developer I worked with to be limited by a low code environment. I don’t want a developer who requires “training wheels” to code.

It appears that low code environments are more sold to managers of developers than actual developers. That is the less you know about development, the more appealing low code environments are, as that person is projecting what development is like rather than doing it themselves.

If I were going to code, I would probably learn Python as it’s good at math, and everything I have an interest in developing is some type of specialized calculator. The Brightwork Explorer was developed in Python and I chose Python and then a Python developer for this reason. If I had wanted to develop an application that was less math-intensive and focused on other characteristics I would have selected a different language.

But really, why should I be coding? I have other things I focus on. What percentage of the planet really needs to be developers?

The Real Issue with Coding Efficiency

A far bigger issue than getting people to code who are not developers is the bad development effectiveness of so many organizations that are supposedly good at developing, but which is clearly not true. How many developers work at Microsoft? What in the world could that many coders be working on that Microsoft’s output is so bad?

And if you notice the messaging from Outsystems, it’s very management friendly. According to Outsystems, the issue is a lack of qualified developers. Let us review the following quotation.

The reason for that is that most organizations still struggle to hire the skilled and specialized developers they need to pursue their digital transformation goals.

Really?

Because I know several developers who are quite experienced, and their complaint to me is incompetent management. They complain about managers who do not know what they are talking about telling them what to do, or wasteful meetings or low development being pushed out to low quality outsourced companies that make the CIO look good (as they drive cost savings) but result in code that must be continually reworked. Incompetent management frustrates developers because they see their efforts wasted.

I find it curious that the only issue that Outsystems seems to perceive in development productivity is entirely related to the developer — and that this is even further restricted to the development environment they are using.

All of this is very appealing to companies, who do not want to point the finger at themselves and consider every issue to be with their developers. And thus, Outsystems is telling their prospects what they want to hear. It is effective marketing and sales copy, but it just happens not to be true.

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Conclusion

Outsystems is using the same tricks that vendors normally do to make their case. They begin with exaggerated and unsubstantiated claims. They then pay some IT analysts to produce a report that says that their application is good, has a high ROI, etc..

The fact is that no IT analyst anywhere produces any reliable ROI analysis. The IT analysts do not even bother to determine if the sample of companies they are given matches the population – which is the most fundamental rule of statistics, called representatives. And they don’t do this because they would not be able to sell these reports to vendors for use in marketing collateral. I do not believe a single one of the ROI estimates that was listed by Outsystems or any of Outsytems’ proxies (Gartner, Forrester, Nucleus Research), because ROI on software is next to impossible to calculate. Secondly, it is dependent on other factors other than software, then are never controlled for in the study. A more relevant mathematical comparison is how efficient the development environment is versus other development environments.

Overall, Outsystems provides no evidence for its claims, and the evidence it does provide is false. Secondly, many of the claims made by Outsystems are not true, and Outsystems strategy is to eventually push their customers into their platform (using the “happy face” of “innovation for everyone”) to get companies to try their low code environment, which eventually leads to their controlling platform.