Unlocking A Successful Modernisation Program
In the customer-centric modern era, digitalisation has become a business imperative, which is pushing enterprises to modernise their business processes and technology ecosystems. But legacy is still pervasive in many enterprises. Infosys Modernization Radar 2022 shows that 88 per cent of current technology assets are legacy. And more than half of this legacy (52 per cent) is core to the business. These legacy systems come with their own set of challenges. For example, they often house essential data and processes that are difficult to manage and expensive to upgrade. They also lack software support, as the people who developed them are retiring (or have already retired). These unsupported core systems present security risks due to a lack of publisher-produced patches to repair vulnerabilities. Legacy enterprises are not ready for the new age customers or the hybrid workplace. They are unable to compete with digital natives and achieve business resiliency.
Hence, enterprises are modernizing their legacy landscape aggressively. 90 per cent of the existing legacy systems will be modernised in the next five years, with almost 50 per cent modernized in the next two years. Enterprises are modernizing to
Enterprises that aspire to modernise are held back due to a variety of reasons
The modernisation journey is wrought with various challenges such as the risk of business disruption, lack of right skills and talent, and cost and time management issues.
The key stumbling block is ‘fear of business disruption’. More than half (52 per cent) of the current legacy systems are core to the business, and even a small downtime in mission-critical systems can be catastrophic. Gartner estimates that just one hour of downtime can cost an enterprise USD 300,000. And rightly so, 27 per cent of business and IT executives from our survey believe similarly. Enterprises kicking their modernisation journey expect to run this race without disrupting the core operations or risking brand reputation.
Finding the right talent and skills is another crucial pain point. Many core applications are or were supported by aging teams of developers with hard-to-find skills. It isn't easy to find new talents who have knowledge of legacy systems and processes. This is evident from the fact that many survey respondents worry about the lack of the right talent (22 per cent) and skills (29 per cent), among other vital deterrents, for modernization initiatives. Many experts believe niche skills such as “rules externalisation”, database modernisation, and the ability to reengineer apps to open source are necessary to truly transform the business.
Another prevalent bottleneck is the cost and time factor of modernising legacy systems. Many projects take over two years and millions of dollars to finalise. As per the survey data from the Modernization Radar, 24 per cent cite cost as one of the critical challenges. The cost associated with different factors of modernisation, such as reskilling costs, new resource costs, and buying state-of-the-art modernization technologies, can upward the total cost of the modernization project.
The ingredients for successful modernisation
Modernisation is not a one-size-fits-all initiative. Different enterprises need different strategies to realise modernisation’s business benefits. However, every modernisation strategy should encompass people, processes, and technology. Enterprises can take four steps for a smoother modernization journey.
Set a clear vision and roadmap for results-oriented business outcomes: Concentrating on the business outcome is cricital. A clear modernisation roadmap with defined commercial outcomes is the cornerstone of any modernisation initiative. Almost 63 per cent of our survey respondents believed these factors were important. A defined roadmap in place, a focus on employee experience, and a clearly defined business process can lead to successful modernisation.
Cross-pollinate Agile teams with deep technical expertise: A successful modernisation can only be achieved with a team that has an agile mindset and uses agile toolsets. Hence, employees should be upskilled to work with exponential technologies such as AI, microservices, and containers. Enterprises should also focus on product-centric value delivery with autonomous, cross-functional teams of technical practitioners, design thinkers, and business experts.
Use a zero-disruption modernisation method: There are three patterns that enterprises can use to achieve a modernised architecture- strangler or phased, coexistent, and big-bang. A big-bang approach is viable if applications are small and can be easily replaced. If the IT landscape requires a full-scale change, phased and coexistent methods might be better. The point is that the approach should be chosen with a clear risk-reward analysis and by assessing the complexity of the existing system. Enterprises should follow a zero disruption method while carefully measuring their risk appetite with proper program management and utilising microservices to address modernisation-driven disruption.
Start small and start now with a modernisation expert: Microchange management is highly recommended. Instead of making changes at once, big modernisation projects can be broken down into small components. Modernised applications can be piloted by leveraging a partner’s expertise and then can be used to refine and scale across the enterprise. Our study suggests that once modernisation projects reach 80 per cent adoption and 80 per cent of the realised features and functions are in use, they are considered assimilated to the enterprise and its culture.
Change is inevitable. Those that don’t modernise will be uncompetitive. Those that do will be future-ready to match the evolving customer demands. But to realize the true value of modernisation, enterprises should follow the right modernisation strategy, which is holistic, cloud-centric, automated, business-aligned, and causes zero disruption to user experience.
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