Successfully competing as a digital business at scale requires companies to respond to customers and market opportunities more quickly than ever before, delivering memorable experiences supported by great processes. Unfortunately, many IT infrastructures are not equipped to meet these business goals. Many consist of inflexible, aging systems that are unable to support change at digital business speeds and are costly to maintain.
Simplifying these environments through practices like application and system consolidation can reduce costs; however, rather than replacing legacy systems, many IT organizations make incremental improvements based on the greatest pain points. These efforts often create still more incompatibilities among the layers of the technology stack and among applications within a layer. The result: cost increases and missed opportunities to deploy more efficient digital ways of operating.
To accelerate time to market, improve system performance and support modern business models, it’s essential for businesses to modernize IT architecture, infrastructure and processes.
Modernizing IT in Manageable Doses
To minimize risk and optimize benefits, we recommend that companies take an incremental approach to IT modernization. A sustainable path involves staged funding and running a series of small-scale, low-consequence experiments with ultra-fast iteration and validation cycles. A typical modernization journey would look something like this:
- Optimizing the traditional business. First, the business needs to assess the existing legacy systems and identify IT rationalization initiatives that would unlock value and savings.
- Migrating to cloud. The savings achieved from simplification can be applied to modernization, yielding additional savings and generating revenue from the new services. Migrating existing systems and business functions to public, private or hybrid cloud is a cost-effective way to accelerate digital transformation.
- Adopting a cloud-first approach. Once the cloud takes center stage, all future initiatives and projects should follow a ”cloud-first” approach. Using cloud-based services enables the IT organization to minimize capital expenditures and realize predictable operating costs while gaining the benefits of leading-edge technology.
The Three Pillars of IT Modernization
While IT modernization calls for a managed, staged approach, it’s important to detail potential quick wins and interdependencies. The modernization plan should spell out how each of what we call the “pillars of modernization” will apply to a particular system.
Pillar 1: Legacy modernization
Depending on the strategy, modernization tactics include:
- Deploying value-driven accelerators. Existing systems can be modernized or replaced with modern apps, platforms, languages and databases using various accelerator tools and utilities.
- Upgrading to modern digital architectures. Deploying cloud-based solutions for back-office services introduces increased flexibility. A microservices architecture for a middle-office process can simplify operations and provide loosely coupled modules through simple APIs and devices for the front office to improve the overall customer experience.
Pillar 2: Process transformation
Many activities across the enterprise require team collaboration and coordination. The most important elements include:
- Business process mapping and transformation. This involves customization of existing business processes or deployment of new processes.
- Modern application development and maintenance (ADM) and IT service management (ITSM). Adopting modern ADM processes such as Agile development will speed time to market. Process transformation in ITSM can be achieved through end-to-end DevOps adoption, creating a continuous delivery pipeline and greater collaboration.
Pillar 3: Operating model transformation
IT transformation occurs through simplification and adoption of digital technologies, from AI to automation. Key activities include:
- Evaluating service delivery and commercial models. Popular approaches include pay-per-use and managed services.
- Workforce transformation. IT must become a continuous learning organization, upskilling and cross-skilling the workforce with regular training on the latest digital technologies.
IT Modernization in Action
One of our clients, a European state government, embraced modernization when it decided to offer a bike rental service to citizens in 10 cities. It quickly became obvious that its legacy platform could not manage transaction and billing data for 20,000 bikes, 18 million trips and 34 million miles per year.
The organization’s budget constraints precluded a legacy application upgrade. The answer was to deploy a cloud-based billing platform, which we delivered as a managed service. The platform was scalable on-demand and supported complex business rules, enabling customization of city-specific features and sophisticated back-office applications. Internal processes were revamped and streamlined to take advantage of the new platform’s capabilities.
Deploying a solution based on a modern IT platform has enabled the client to cost-effectively offer a superior customer experience and streamline internal processes.
To be a source of innovation and help generate business value, IT organizations must go beyond simplifying and patching their landscapes to modernizing them with today’s flexible digital solutions. Through a phased approach, IT can affordably attain the new capabilities required to align its operations with business objectives.
Vijay Francis (Senior Director, Cognizant Digital Systems & Technology) and Abhijit Bharadwaj (Senior Manager, Cognizant Digital Systems & Technology) contributed to this blog post.
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