How digitalization is changing the demand for software development

A few years ago, the development of individual software was often associated with creating legacy with high follow-up costs, but today it is at the center of many companies' digitization efforts. teknowlogy has taken a closer look at the causes of this image change, current development trends as well as effects on companies' existing IT environment.

Businesses from all industries are hiring software developers, data analysts and AI experts, whose task it is to design modern customer interfaces, automate business processes with the help of digital technologies or implement innovative services and business models. It is very obvious that the image and requirements of software development have undergone a sea change in the recent past due to the demands of digitization.

teknowlogy Group has identified several triggers that drive the need for individual software development:

The fusion of IT and OT: IT and digital technology will not only be used for the functional expansion of products (such as cars), but increasingly in the core business as well. This entails investments in data protection and security as well as in integration services in order to connect two worlds with different interfaces, standards and processes on the software side.

Growing IT demand in LoBs: The fact that IT and digital technologies are becoming increasingly embedded in products, production and business processes has led to growing IT demand in LoBs. Solutions are often developed individually, due to the lack of standard products.

The impact of digital application development on legacy environments: Digital innovation must be integrated into enterprise-specific back-end legacy environments. It is necessary to innovate the IT architecture to be able to react flexibly to changes over the long term. teknowlogy has developed a reference architecture for this purpose (see chart).

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We have also taken a closer look at current trends in software development:

Projects are almost always driven by agile development methods and PaaS services, which are available on current cloud platforms. Most of these cloud-based development platforms also integrate DevOps tools that enable agile project teams to manage the entire life cycle of the software, from design, development and testing, to deployment and operation. Interestingly, there is also a renaissance of open-source software, which is used by many companies as a sourcing tool for knowledge and processes. This new significance became particularly apparent by two major takeovers: IBM's acquisition of Red Hat and Microsoft's of open-source developer platform GitHub.

The greatest challenge facing the area of software development is the shortage of skilled workers, experts in the field being as rare as they are coveted. To overcome this bottleneck, service providers are increasingly working on developing new sourcing concepts. Another approach to combating the shortage of skilled workers in the software development space is the use of low-code platforms.

A detailed description of the requirements and trends can be found in our worldwide SITSI-Report “How digitalization is changing the demand for software development”.