Key Steps to Building a Core IT Modernization Strategy

IT modernization, a business imperative that hinges on digital transformation, has become vital for future-forward enterprises. Fast-evolving engineering is leveraging cloud-based alternatives that integrate DevOps, APIs, serverless architecture, and microservices for business betterment. Incremental integration of company-wide sensory networks, blockchain, and smart (cognitive) computing is renewing archaic IT systems and validating their product-market fit. 

However, a transition from legacy systems onto newer, agile architectures is a challenge few organizations want to tackle head-on. Some waver, others falter midway and run their migration plans into jeopardy with a lack of endeavor, if not ambition. 

To be clear, creating an IT modernization roadmap is a dynamic process. It requires rigorous brainstorming, planning, and forecasting to achieve critical mass. Therefore, in this article, we will share with you five strategies for information technology modernization.    

What is IT Modernization?

In short, IT modernization refers to the process of updating either partial or complete software layers underpinning the enterprise for improved productivity, optimized performance, and maximized technological efficiency. 

Software gets outdated rather rapidly. Undertaking in-house modernization of technology has become intertwined with realizing sustainable profitability and maintaining marketplace supremacy. But that is not the only reason being propounded to go ahead with such plans.

Legacy Core IT systems are often heavy on upkeep and running expenditure. A Deloitte Global CIO Survey found that it is such investments that consume the maximum bandwidth of the total investments allocated towards IT.

In what has turned out to be quite paradoxical, higher costs are correlated to lower productivity. The same survey, when quizzed the sample participants on their view of technologies most likely to have a grassroots impact on IT, then analytics, digital, and cloud platforms emerged as the victor. The need for a digital modernization strategy towards such verticals, therefore, couldn’t be understated. 

Viewed from the corporate prism, modernization of technology is being undertaken with an eye on customer centricity to lift business optimization at par with the standards of the digital age. 

Is it the Right Time for an IT Modernization Strategy?

Technological paradigms have rendered an age of non-stop, perfectionist advancement. Legacy systems could cover up for judgemental error from their human overlords, however, technology modernization could, in theory, instate a company’s competitive edge and help them galvanize IT resources at an unprecedented level of effectiveness. 

Internet connectivity, mobile-device mass penetration, and digital adoption on part of the customer are augmenting data creation. A macroeconomic world that rewards first-to-the-market producers demands the onset of flexible, scalable IT architectures to innovate at pace. 

Read to learn how to choose the right IT consulting firm and strategy for your business in this blog.

And as if the aforementioned trends don’t signal the trends, the same vendors supporting legacy IT systems have (ironically) launched custom-built, ready-to-run, new-generation product offerings for enterprise customers. ERP vendors are at the top of this list competing aggressively with cloud vendors to offer mid-office and back-office solutions. 

Another case in point is the Common Business Oriented Language (COBOL) that has seen a drop in learner uptake pointing to the dropping popularity of mainframe programming languages, used to support legacy systems. Such factors have cornered CIOs and made them seriously consider their technology modernization strategy. Some of the common questions to ask oneself before creating a technology modernization strategy are as follows: 

• Are business functions finding the current IT stack an impediment? 
• How will the immediate goals of business units influence core IT?
• What computational resources are required to uplift business performance?  

This up-close evaluation should handhold you to modernize technology. It’s important to note that end-to-end systematic changes may not be the prescribed course of action for all. Variable factors such as organization size, vision, and outlook should help derive the extent of tech enablement required at the core. Basis this, the digital modernization strategy could equate to a mere retrofit of the proverbial spinal cord of legacy systems. 

The aim of this entire rigmarole is to acquire a simplistic, and business-friendly workflow. As a result, road mapping cannot be visualized without first understanding the in-use software system. Project estimation, timeline setting, and goal formation come subsequently in the course of action. Having developed a supposedly useful system iteration, further steps unfold towards perfecting the newer version for use.    

However, before that let us first take a look at some typical examples of IT modernization. 

Examples of IT Modernization

Here are the typical examples of infrastructure modernization that enterprises usually undertake: 

ERP Upgrades – ERP systems power digital businesses in extending a centralized software platform to handle purchase orders, inventories, SKUs, marketing campaigns, finances, and human resources among other assets. Therefore, upgrading to a new ERP solution is common as ERP products that better align to a company’s vision hit the market.

Also Read: Guide to Estimating the ERP Software Development Cost 

Mergers & Acquisition – M&A are part and parcel of the business world. A lot of software decommissioning and digital retrofitting comes along when two distinct entities merge. This is an opportune moment for evolving your IT vertebrae to industry standards. 

EDI Transformation – Electronic Data Transfer Systems have been fueling global business growth for quite some time. However, a good portion of large-scale supply chains continue to operate on archaic legacy EDI foundational layers that need renovation.   

How to Build an IT Technology Modernization Strategy?

The end-user experience and brand ratings go hand in hand when it comes to information technology modernization. This user experience is interspersed with the technological footing of your company. As an adage, core IT strength presages successful business development plans. As a leading IT consulting service provider, we suggest a five step workflow to get going on this:

#Step 1 – Set Milestones

Profits aren’t built in the abstract. They require clear vision statements and course correction before even a minutiae of results are realized. Translate your goals into measurable action points against a threshold. Use competitive benchmarking and trend analysis for establishing productive guidelines. 

#Step 2 – Optimize Resources

You don’t want your team to run out of steam. Your workforce is your greatest capital so monetizing it should be a priority. Deploy validated product managers who can manage and ensure discipline. The motive is to allot responsibilities as per core competencies. 

#Step 3 – Experiment

A small-scale design sprint to tiptoe on untested models of IT isn’t a bad idea. Provided you have the personnel with the requisite experience in getting in and out of the quagmire, you should test out your hypothesis of various IT modernization models (discussed in detail later) before launching a full-scale turnover. 

#Step 4 – Measure

Self-auditing enables stakeholders to measure change management in terms of key performance indicators. Having an agile mindset in this view handholds you to productive streamlining. 

#Step 5 – Stabilize Teams

Attrition is a productivity killer. Application modernization requires an all hands on deck approach. Needless to say you need confident, mature, and astute leadership to pave the way rather than abandon the docks. Before venturing on such a recurring endeavor, ensure that key members are on board and ready to back you to the moon and back.  

While the steps given above are imperative to an effective IT modernization strategy, the process is often time consuming, exhaustive and expensive. As per a research from Couchbase, upto 90% of digital transformations of companies fail due to a multitude of reasons such as the lack of appropriate IT talent and technological infrastructure. 

Outsourcing your IT modernization requirements to an IT service company like Appinventiv can provide visibility and stability within your organization while enabling your business to operate in a more strategic manner.   

Create an Outcome-Oriented IT Modernization Roadmap

Experts acknowledge and recommend the following categories of enterprise digitization: 

Replatform – It refers to re-hosting or migrating your current IT infrastructure onto a digital, specifically cloud setting. Considering the scale of the migration, enterprises most commonly switch to the Infrastructure as a Service (IaaS) model of the cloud. For much of the migration, the integral code base remains the same. This re-adjustment of the code saves total deployed resources and as a by-product migration charges. 

Remodify – This type of model aims to implement new IT capabilities on top of the existing software layer. The objective is to leverage the advantages of big data stored in legacy silos for purposes of data visualization, improving customer experience, employee engagement, and future-aligned data discovery. Similarly, data analytics is another wing that utilizes this type of IT modernization strategy. 

Reimprove – This type of IT modernization strategy involves working on the inconsistencies of the existing tech stack. For instance, analysts could be required to reconcile data in order to simplify business processes. 

Yet another motive of this exercise could be system integration which seeks to overcome the data sharing hindrances of legacy firewalls to share insights with third-party data vendors posted outside the organization. An immediate advantage of such a process would be to optimize cloud investments and further simplify the maintenance of core IT. 

Replace – This type of information technology modernization strategy facilitates household corporations in that they do not have to shut the door on the entirety of their legacy infrastructure. Instead, they could substitute outdated workflows with state-of-the-art solutions and continue using the legacy system as it is. This approach pushes businesses to explore new frontiers for project completion and not replicate the bygone age. 

Reconsider – You don’t have to follow the herd. Pave your own way. Maybe the legacy system is actually cut out for your needs. Often, the boardroom dilemma revolves around imitating competitors. The answer is in the data. If your balance sheets are pointing towards profitability, then perhaps “good enough” is actually good for you. 

Also Read: IT Strategy for Business: The Key to Digital Transformation

Use Cases of IT Modernization

IT modernization is not a new concept but has been around for a while. 

A famous use case is that of PayPal. The e-payments giant is estimated to have enabled transactions worth $4 billion on its platform in 2014. The company has been quite vocal about its commitment to disrupting thyself in order to maintain the competitive edge. 

For instance, PayPal was in the news for transitioning from a waterfall model to an agile methodology. The colossal scale that had to be achieved pushed PayPal to retrain upto 510 intercontinental teams working through different time zones. 

In doing so, PayPal upended its back-end systems and subscribed to a private cloud setting thanks to OpenStack cloud management software. Since then, in an effort to build on its self-disruption model, the digital payments conglomerate has partnered with mobile payment vendors that help cover up the cracks in PayPal’s portfolio of services. 

Amtrak is another example wherein its customer experience transformation initiative is grounded in core IT rejuvenation. The company aimed to achieve uniformity and seamlessness to offer high end, personalized, and standard-setting customer experience through multivariate channels such as Amtrack.com, its captive units, and third-party outposts. 

Termed EPIC and commenced in 2011, Amtrak has innovated its way to compliment ticket bookings with full-spectrum travel services that encompass third-party suppliers. 

Rethink Digitalization 

As an enterprise software development company, Appinventiv can help you rethink your core IT infrastructure policy.

Since inception, our workforce has helped over 500 businesses streamline IT processes with a cumulative 459,000 processes simplified. Being a dedicated IT company in UAE, we have made varied contributions to emerging and established entities in the entertainment industry, travel sector, event management, sports, SaaS, and telehealth (among others), we are eager to help your business realize its true potential.

Let’s get in touch, we’re sure to give you bang for your buck.

THE AUTHOR

Saurabh Singh

CEO & Director