GenAI tools deliver a 3x+ impact on software development and app modernization

Using GenAI, your firm can shatter the barriers between the business teams using software to gain insights and drive outcomes and the IT teams crafting the code to make the systems work. GenAI brings immediate advantages in understanding software code and logic, transforming legacy code into modern code, and improving the productivity of software development teams. By changing the software development culture, a firm can significantly speed up the time it takes for the business to request new solutions and the application development teams to deliver.

For decades, business leaders have allowed software development to be the sole purview of the firm’s applications development teams or their software vendors. Engineering teams have done their jobs writing code, managing integrations, and developing dashboards. In contrast, the business teams shake their heads when the jargon of Java, node.js, COBOL, Ruby on Rails, ABAP, and other mystical-sounding terms are thrown at them. Too often, the result has been for the business to submit requirements and wait as application development teams change workflows, manipulate applications, map dependencies, clean data, and design new dashboards. The result is scrums become sprints, which become marathons, and the promise of being agile feels a lot more like a never-ending journey.

GenAI is the key to accelerate value creation by accelerating software and applications development teams

GenAI is an emerging technology, and HFS has highlighted its increasing usage in software development in generative code practices, examples from large companies’ case studies, and reskilling teams to maximize its impact. Unlike typical emerging technologies, GenAI goes from concept to practice very quickly. While many programs are still in their early days, it’s clear that firms will only hurt themselves by standing by and letting their competitors prove the value of this new technology before they do.

GenAI is a boon for software development. Machines can apply logic to scan large amounts of data, code, and workflow logic. Large language models (LLMs), using generative pre-trained transformers (GPTs), can interpret millions of lines of code and quickly document its functionality, identify dependencies, and, increasingly, translate code from one language to another. These solutions augment the software engineering teams, allowing them to focus their time on complex areas where GPTs can’t rearchitect the logic, data, or workflows.

In a recent interview with Bill Gates on his podcast Unconfuse Me, OpenAI CEO Sam Altman cited OpenAI teams and their customers’ success using ChatGPT-4 in code development and modernization. Altman stated, “…right now, we see [ChatGPT] speeding up a programmer by three times…”

He shared that making programmers three times more effective improves productivity and frees valuable resources to achieve qualitatively new things that may not have been imaginable in the past due to resource constraints.

HFS sees this as proof that GenAI is essential to the software development life cycle (SDLC) and firms’ efforts to modernize their application architecture. The whole organization can achieve greater outcomes using GenAI in conjunction with traditional coding, programmers, and real-time business inputs.

This improvement is further illustrated in an EY case study, where EY and a customer successfully converted 4,000 lines of code with 85%+ accuracy and 80% less effort. The person-hours of assessment, discovery, documentation, and re-coding likely saved the customer millions of dollars. By augmenting application modernization efforts with GenAI, the company’s software teams were freed from mundane discover, document, and fix work and focused on the more complex and important challenges.

Understanding the real, potential, and dream roles of GenAI in the SDLC is crucial to building teams with clear, achievable outcomes

Incorporating GenAI into your applications engineering, modernization, and support teams can positively impact the bottom line by reducing teams’ time and effort spent doing low-value work. Yet, as this is an emerging technology, it is crucial to understand the real, potential, and future “dream” of how GenAI can play a part in the software development and applications modernization value chain.

Exhibit 1 articulates each stage of the HFS applications modernization value chain. GenAI plays a role in replacing, augmenting, and automating how this work impacts each stage. Measurable outcomes are tied to reclaiming talent, accelerating tasks, and getting more value from corporate IT teams’ efforts.

Exhibit 1: GenAI’s impact on application modernization speeds evaluation to realization for the business

Source: HFS Research, 2024

In each stage of the applications modernization value chain, there are solutions for today’s and tomorrow’s teams to explore. For the business or IT leader, it is crucial to highlight that the stages of the value chain are no longer linear. Rather, any of these 18 examples can be in play, and project leaders should be actively picking and choosing which real, potential, or dream outcomes they can pursue today to drive impact.

GenAI will soon dominate all aspects of the SDLC, changing the model to humans in the middle

The SDLC is undergoing a metamorphosis because of GenAI. To be clear, GenAI isn’t replacing coding efforts in pro-code, low-code, or no-code. Instead, it makes all these even more intuitive to the user, regardless of whether they are in technology or business. It will be essential for experienced software developers to review the code and develop junior teams on this augmented GenAI+human model, but this change is a fait accompli.

As Exhibit 2 illustrates, HFS sees the modernization of the SDLC as using a combination of GenAI, low-code, and no-code to develop, modernize, and integrate applications and workflows. We recommend that companies look to their ecosystem of software vendors and services firms to augment this knowledge further with skills and best practices. By working with internal and third parties, it is possible to create applications simpler, faster, and more responsive to business needs, increasing the speed of the SDLC flywheel.

Exhibit 2: Adopting GenAI into your SDLC speeds value creation, saves time, and delivers results

Source: HFS Research, 2024

GenAI frees resources currently spent triaging, testing, documenting, and designing software needed to run a business. By adopting GenAI alongside low-code and no-code, firms can create billions in annual savings and reallocate valuable resources and time spent by employees and partners to more impactful areas of value creation.

The Bottom Line: With the advent of GenAI solutions, software development has been forever changed. Humans and machines will now work to create applications, optimize solutions, and transform legacy systems into cloud-native solutions.

HFS recommends that software development leaders immediately focus on adopting GenAI as part of the SDLC and track the tangible outcomes and challenges. Work with your teams and software engineering services partners to automate low-level software engineering efforts like code assessment, dependencies, and documentation discovery.

This is the first step in transforming the culture of software development. By combining the talent and knowledge of your teams with new software development tools like GenAI, low-code, and no-code, the whole SDLC will be transformed in short order, thus allowing internal and third-party teams to speed up their ability to implement changes the business needs, develop new solutions, and convert their role in the business from support to collaborative participation.