Many believe that 2020 will be a watershed year for digital transformation. The primary business driver of these initiatives often varies (e.g., automating key processes, responding more quickly, evolving more effectively to increasing complexity) but the fundamental reality is constant. Each organization needs to change to stay relevant. How one approaches this transformation could be the difference between ongoing frustration and lasting success.
For most organizations, core business systems such as the mainframe have been a cornerstone of their success. Many of these systems of record have been in use for dozens of years, and they are the repository of intellectual property and complex transactional and operational rules and policies that define the organization. Moreover, additional IP and processes often have been built around them over time, making these systems even more complex and mission-critical. This is likely why senior IT executives say 85 percent of these applications are expected to be classified as strategic over the long run.
Because these systems are strategic, they are also a regular focal point for ongoing improvements. In the mainframe example, shortening application delivery cycles with DevOps principles may be the primary objective. But there is much more that can be accomplished at the same time, including:
- Lowering costs by leveraging less-expensive storage
- Boosting user productivity
- Increasing throughput
- Strengthening mainframe application access and data security
- Accessing data that has been locked away for a long time
- Making such data more broadly accessible to advanced analytics
Typically, to achieve these objectives, organizations must choose between two distinct options: modernization or rip-and-replace.
Starting from scratch, with a largely new set of technologies, may initially be appealing because there are a number of perceived benefits to this strategy — such as access to cutting-edge technologies and new ways of thinking and solving problems. But once theory is confronted by reality, most find the net result to be added risk, downtime, complexity, re-education and resource drain. This is why a prominent industry analyst reported in 2018: “IDC is seeing a shift from a ‘rip-and-replace’ approach toward modernization strategies that are aimed at gaining significant business value in the form of agility, new business capabilities and a reduction in TCO and risk.”
The alternative path forward is to digitally transform through modernization. By bridging the old and the new, senior IT executives have reported they are able to evolve more quickly and at less cost by averaging previous investments and utilizing in-place resources. Importantly, they report doing so while also exposing the enterprise to less risk. Because these systems are often the first to be negatively affected by new initiatives — given their underlying complexity, and given the critical nature of the information contained therein that can inadvertently become a target of a breach or compliance misstep during a changeover — protecting current processes and IP naturally represents a lower-risk opportunity.
In the final analysis, many CIOs elect to move forward with a plan that allows them to run and transform the business at the same time, via modernization. While it can at first seem appealing to start from scratch, often this approach will break down processes, compromise security measures and put revenue at risk. By instead moving forward in a fiscally responsible and methodical manner they find they can future-proof investments in core systems, drive new value and put their organization in a position for long-term prosperity.