Companies are facing serious external challenges managing aging IT infrastructures and application portfolios. To decrease costs and risks while increasing flexibility and innovation, many are turning to cloud technologies. By adopting cloud platforms, companies enable the delivery of “everything as-a-service.” This empowers the workforce with faster any-device access to solutions that are available, affordable and ready to use.
However, in order to realize cloud computing benefits, organizations must first transform and modernize their applications portfolios. Modernization is a key to business success and a significant challenge for chief information officers (CIOs). Although perceived as risky and expensive, modernization can produce benefits beyond cost savings - such as growing market share, instilling customer intimacy and driving sales.
Establishing an effective application modernization strategy before embarking on the journey to cloud computing is key to implementing a smooth, seamless transformation. Planning for a modernization initiative is not easy – it takes patience and persistence to determine your current IT state, where you want to be and how to achieve your goals. As CIOs prepare to transform, they can use the following checklist to position their enterprise for cost-effective, agile growth:
√ Evaluate reality
√ Identify benefits
√ Determine technology direction
√ Define the path
√ Identify strategy
√ Rationalize risk
√ Target the architecture and the cloud
√ Evaluate Reality
Many enterprises are challenged to bridge the gap between legacy environments and new technologies. To support this complex environment, CIOs need to evaluate reality by analyzing the current operating environment including the people, business and technology – including applications and infrastructure. Technical aspects of the business applications must be charted, along with the functional quality and the total cost of ownership. The assessment should also look at the issues of today, concerns of the business users, plans to add new products or services and the desired future state.
Using a fact-based assessment to evaluate the reality of your environment will help determine how well it is serving the business and identify actions needed to mitigate the risk to ongoing business activities.
√ Identify Benefits
There are many benefits to applications modernization so it is critical to understand the business objectives. Some common objectives include:
- Increasing responsiveness to business priorities and changing customer demands
- Improving business performance
- Improving productivity for employees
- Reducing maintenance costs by streamlining complex, legacy systems to more modern, efficient technologies
- Achieving faster speed to market with modernized infrastructure and applications
When analyzing modernization initiatives, the proposed solution must provide one or more of the following value points: business value, technical agility and/or cost containment. When viewed in the context of a specific modernization project, each individual initiative will stand on its own merits. The benefits will shift dependent upon needed value.
√ Determine Technology Direction
Once you have a strong understanding of the reality and benefits, you should set a path for the future technology direction. Throughout this process, IT must partner with the business to ensure that operations are considered when planning for the future state architectural environment. The technology direction must support the business environment as the IT department can no longer force technological change upon the organization. Instead, IT must find the architecture that provides the most flexible approach to running the business within a fiscally responsible framework.
√ Define the path
When defining the path, it is critical that your future state have a business context because if it is just about IT, it will most certainly fail. A detailed, step-by-step path can guide the implementation of modernization activities and should include a formal delivery strategy, enterprise architecture and detailed planning for service implementation and change at every stage. It should also identify specific tools, methods, processes and activities, as well as the broader scope, planning and distribution of transformation-related tasks.
When considering where to start – be sure to look first at the projects that will easily return value. Demonstrating early success will help ensure buy-in from key business stakeholders. Additionally, the plan should be revisited every 3 months to see if any of the steps need to be revised or renewed.
Finally, it’s worth noting that a transformation plan does not need to be viewed as disruptive to either IT or the business. Using the right balance of best practices with a robust architecture that is flexible, the changes can add immediate value with lower risk.
√ Identify Strategy
With information from the assessment, you can apply the right modernization strategy based on the business driver. No one strategy will fit all – it might include a combination of several strategies such as:
- Re-learn
- Re-factor
- Re-host
- Re-interface
- Re-architect
- Replace
- Retire
Working with a trusted partner to determine a comprehensive modernization strategy can help you get on the right roadmap and get to results quickly.
√ Rationalize Risk
There are many risks associated with older legacy applications that must be taken into consideration. Age, complexity of the system and support resources are key components for calculating total cost of ownership and ease of change to the systems. An additional consideration is looking at any technology that may be losing vendor support.
While there is risk and cost associated with applications modernization, modern architectural standards, tools and processes have created a safety net. Enterprises should consider all aspects of their IT environment to understand their risk profile and the challenges they face. Modernization can provide an effective risk-mitigation strategy to help stabilize the IT environment while providing relief to companies’ most problematic applications management issues.
√ Target the Architecture and the Cloud
Moving to the cloud is not just another technology adoption. It must be done within a business context and be backed up with a roadmap to the target architecture. When analyzing cloud-based approaches to modernization, you should consider a variety of factors including usage statistics, business process alignment and criticality, data sensitivity, security, application accessibility, availability and reliability. Whether you should move some of your applications or specific functional pieces to the cloud are important options to consider.
Many organizations will use a hybrid approach, which may also include service oriented architectures (SOA) with reusable components that group functionality around business processes. Reusability of common services provides less risk in the development environment while increasing speed to market for new offerings.
Each modernization initiative must be evaluated upon its own merits. This cannot be a prescriptive approach; instead, CIOs must provide the solution that best supports the business models and value propositions for each engagement.
Conclusion
A holistic analysis, business case and value proposition will determine the feasibility of a transformation program. Developing and executing the plan requires the patience and persistence of the CIO and team to successfully implement the plan, obtaining technical resilience with results that are based upon evolving business needs. To realize the full value of the modernized environment, ensure that the support of this environment is not overlooked – whether a services provider is supporting it or turning it back over to your team.
Transforming to the future state is not a sprint, but a series of initiatives that provide ongoing returned value to the organization. This approach yields achievable results without significant disruption to the business ecosystem, providing cost savings through modernized application environments while optimizing business continuity.