When we initially set out to write a piece about how to implement an IT Modernization Strategy, we quickly realized there is not only a lot to consider when weighing the possibilities, but also a lot of context required to lay a meaningful foundation. We want to discuss what IT Modernization is and what it means for your individual business, as well as other terms and ideas to help define the overall picture.
We'll begin by exploring the motive behind IT Modernization, and identifying the traits that make up the profile of an entity that is looking to implement IT Modernization in their enterprise. Overarching themes include Digital Transformation, Capital Expenses vs Operational Expenses, Legacy Systems, how Cloud fits into the picture (because it's no longer a question of "if" cloud fits into the picture), as well as others.
There are several questions to ask when trying to nail down the motive- we'll be working through these questions in our series:
By the end of this series our goal is that you will have the foundational understanding of IT Modernization that will help you answer these questions.
If you've worked with Praecipio before, you know we like to start simple - so let's begin with the basic question "What is IT Modernization?" To oversimplify the concept, IT Modernization is a process of assessing an individual system or group of systems in your organization with the intent of establishing the best possible balance of cost and efficiency. One of the challenges we often call out is that this can look vastly different depending on the context of what it is being applied to.
As part of an IT Modernization strategy there can be some aspects of your business where it makes sense to move in a more digital direction, for example migrating on-prem resources to virtualization or the cloud. While the overarching goal may be to get to the cloud, there are different paths that you organization may take based on your specific context. In the case of moving an application to the cloud, there are the branches hosting the application on a digital platform like AWS or moving completely to a more SaaS model and allow it to be maintained by a third party. And of course, for some other aspects of your business it could make more sense to maintain an on-prem solution but update the infrastructure. The key thing to consider here is how you can balance the cost of maintaining whatever aspect of your business you're assessing with the amount of performance proficiency it is providing.
Another term you'll often hear mentioned in the same breath as IT Modernization is Digital Transformation. It's true that these often go hand-in-hand, but the main difference to consider is that Digital Transformation gets into the explicit changes you have to make in order to keep pace with the digitization of aspects of your business, like products, assets, and processes. IT Modernization is more of a strategy for improving your business through cost savings, efficiency or improving on how agile your business can be. More often than not, Digital Transformation will be a key part of your IT Modernization plan, but they are not necessarily mutually exclusive.
With that in mind, let's start to identify the motive a business might have for exploring IT Modernization and what attributes make up its profile. The first question you have to ask is "Why would you even be interested in IT Modernization?" The short answer is every business should be thinking about IT Modernization on some level. We exist in a world where the only true constant is change, and as time progresses the main thing that we're betting on is that our technology and business landscapes will continue to shift. The most successful businesses will adjust business practices to match - if you're not willing to embrace the change and make it work for you, your competitor will, and they'll be happy to take your market share off your hands. Additionally, IT Modernization benefits the business, either by lowering your operating costs, or empowering you to be more efficient managing resources and development. Thinking about ways you can Modernize aspects of your business is just good business.
So how do you this? What does it look like? Well, we've touched on the two key factors associated with Modernization: Cost and Efficiency. There are a couple schools of thought when it comes to the approach and how you can execute modernization, outlined below.
The first approach would be considered a more traditional approach. This approach involves making incremental changes made over time targeting the most costly or bottlenecked aspects of the business. From this you can attempt to figure out how you can make them more efficient or cost less, or maybe a combination of both. The main benefit of an approach like this pertains to risk: changing pieces incrementally allows you to carefully consider those changes and their impact on the business as a whole. Incremental changes can also be very good for the bottom line since it allows you to budget changes over time. One of the potential downsides to an incremental approach is it can be limiting. Taking the time to make incremental changes can take.. well... time.
On the other end of the spectrum there's the end-to-end or holistic approach. This is about what you'd expect: instead of incrementally making changes you're making a plan to implement broad changes across your organization as a whole. This requires careful planning and consideration of what elements need to change in what sequence, to truly understand the potential impact across the organization. One of the benefits of this approach is it keeps the organization from advancing in a siloed manner, which can lead to less efficiency as a whole. In one instance, that might mean two different business groups moving their application to two different cloud solutions that offer the same functionality. Whether your approach is more incremental or end-to-end, it's important to try to take into account the potential impact across the business and ensure groups coordinate the efforts.
When it comes to implementing IT Modernization, it's important to understand that it is much more than a simple update to your technologies. Rather, the approach should be thoughtful and well planned, with an eye to the future and a willingness to embrace the new and sunset the old. At a high level it is important for your teams to identify out of its legacy software or assets what can can be invested in - whether through legacy software modernization or replatforming- and what should be divested from. Reaching a decision on the best path forward for each application will take time - legacy modernization is not an all or nothing endeavor. We'll spend dedicated time in future posts discussing how you can best approach application modernization.
As you consider what IT Modernization means for your organization, keep in mind that there is not a one size fits all solution. Our goal is to provide helpful context to help you define what an IT Modernization approach could look like and what success would mean to your organization.
At Praecipio, we enjoy helping our clients reach their IT Modernization goals and bringing teams up to speed with digital demand. If you'd like to learn more about how we can help, reach out to us!