Making the money work – smart IT modernization

Driving to Digital

In an era of digital transformation, not to mention a lot of economic and regulatory change, for many organizations this means unprecedented pressure to deliver new innovation to remain relevant and competitive. With studies revealing that only 5% of organizations winning at digital transformation, the ever-increasing pace and complexity of change is becoming alarmingly difficult to manage.

With so much to do, little wonder perhaps that there is an ongoing reliance on incumbent, core business system: indeed 90% of the incumbent IT apps will still be in use 5 years from now, according to Gartner.

The IT world needs to find a way to protect what already works while also accelerating the path towards new innovation. That strategy is called Modernization: to modernize what works, to support future needs. And with a reported growth rate of 20% each year, it is increasingly popular.

The trouble with starting from scratch

Modernizing core IT systems to incrementally improve them is a statistically lower risk option compared with ripping the system out and starting all over again. Modernization projects rarely fail, whereas rewriting systems is an eye-watering 70%+ failure rate, according to both Standish Group and Gartner reports. Package replacements aren’t much better.

And IT projects in the financial services sector are not immune. As reported in the press this year alone, UK bank TSB suffered IT difficulties, within its new online and mobile products (reportedly due to a migration from its Lloyds-based system to the Banco Sabadell-based Proteo4 system). Days later, Visa users across Europe apparently struggled to complete transactions both online and in retailers. MasterCard were claimed to have suffered similar issues, as did the Faster Payments facilities at Lloyds and Halifax. These claims could suggest a worrying potential risk to the sector as a result of unforeseen IT issues.

Going Digital without the Drama

The benefit of building upon what’s already there is that the value the system already provides – often a decades-old heritage of functionality – is protected and maintained for the future. And in some cases this heritage works to an organisation’s advantage – differentiating them from competitors. Plus, reusing IT applications to support a digital strategy both reduces the effort involved (what is needed is already in place) and can require a much more modest budget.

Micro Focus sees Modernization as a viable and sensible option for embracing digital transformation while avoiding needless risk: a major FS consideration. The new web page outlines, “Core business applications, often COBOL-based, are the lifeblood of organizations. Thriving in a competitive digital landscape means transforming the systems hosting core business processes. Micro Focus enables this transformation with the lowest cost and risk, through a comprehensive solution across three key pillars of modernization: application, process and infrastructure.”

Beneath those simple statements lies an array of detail and significant supporting technological investment, built and improved over decades of support of thousands of customer successes. So what do we mean by those three pillars?

Modernization can be broken down into its requisite attributes of what, how and where:

The What –the Application itself

• Extending the application code or experience via web, mobile, micro-services and APIs, integrating COBOL based systems into .NET or the Java Virtual Machine

The How – The software development delivery process

• Improving the velocity by which new features are delivered to the customer by establishing a collaborative, secure and modern (DevOps based) development process for all applications

The Where – the underlying infrastructure

• Deploy fit for purpose workloads as aligned to business strategic and cost model and take advantage of the latest technology platforms (Azure, AWS or other Cloud infrastructure, Linux, Containers, etc.) while establishing an industry standard security model designed for the digital enterprise

Smart Consensus

There is a growing alignment around a low-risk, pragmatic approach to IT system evolution. “The industry loves to call it ‘digital transformation’, but let’s just call it modernization,” said a recent IT press article.

Other industry commentators agree. In their report from earlier this year, Gartner Group advocated a “continuous business driven modernization” approach. IDC are seeing a shift to Modernization strategies in much the same way. “…a shift from a “rip and replace” approach towards modernization strategies”. The recent IDC white paper – Modernization: A flexible approach to digital transformation – concludes, “There is an emerging realization that modernization can and needs to take many forms. Micro Focus represents that kind of flexibility with a portfolio of solutions that allow customers to implement the most valuable approach to modernization based on their specific needs.”

Download IDC’s new Modernization white paper here.