A practical approach for IT modernization
In a recent study by Harvard Business Review, a notable 89% of global companies embracing digital and AI transformation reported a 31% increase in expected revenue and 25% in cost savings. The banking sector’s success, with digital leaders achieving an 8.1% annual total shareholder return compared to 4.9%, highlights the significance of revenue growth and expense control.
Background: Evolution of aging platforms
The digitization of assets and process automation, initiated in the ’90s, has evolved in response to changing business conditions and innovation, especially in sectors like banking, healthcare, and insurance. Unfortunately, this evolution has led to the development of complex and outdated platforms.
Reviewing various efforts in transformation and modernization, the top five reasons for setbacks become apparent even within large institutions. Despite successful transformations fostering digital business, these challenges persist, often overlooked but undeniably real in sizable organizations.
- Lack of holistic approach: Rushing into specific areas without considering the big picture.
- Inadequate evaluation of current platform state: Neglecting factors like traffic patterns, maintainability, and usage. Right sizing and modeling are critical.
- Incorrect technology choices: Influenced by internal/external factors or incorrect information.
- Short-term focus: Prioritizing quick gains without considering negative side effects.
- Resistance to change: Allowing applications to grow to a state where change becomes undesirable.
Notably, this list excludes non-starters such as lack of business priority, funding issues, poor execution, and team skill deficits.
Doing it right: A Blueprint
While every case is unique, our experience has shown that adhering to certain guidelines is crucial:
- Methodical approach: Deeply evaluate business and technology.
- Comprehensive evaluation: Leave no element unexplored; avoid shortcuts.
- Reality check: Go beyond documentation; understand the actual system’s current state.
- Long-term perspective: Challenge deviations impacting timelines, costs, or outcomes.
- Holistic approach: Avoid piecemeal strategies; understand the entire system.
- Informed choices: Compare multiple options for technology decisions; enforce criteria.
- Adaptive design: Demonstrate architectural patterns that counter “too big to fail” concerns.
- Right sizing: Tailor services appropriately; even a monolith can be a valid choice.
- Proven accelerators: Utilize and customize industry-proven accelerators.
- Automation: Implement full automation at every stage, from infrastructure to deployment.
- Security first: Define security and compliance from the outset.
Digital Business Methodology – A practitioner’s mantra
Success requires a methodical approach. Our DBM (Digital Business Methodology) provides insight into the “What” that shapes your approach, with the “How” contingent on tools, ecosystem, leadership support, and team skill set.
The primary objective is to uncover authentic context and challenges during this 4 to 12-week phase, depending on the size of the platform and team dynamics.
- Conduct brainstorming sessions involving both business and technology teams.
- Assess current state maturity, ecosystem optimization, infrastructure readiness, application and data assessment, backward compatibility needs, and team skill sets.
- Define the target state, prioritizing incremental outcomes.
Lasting 1 to 6 months, this phase focuses on creating an optimized ecosystem. Specialized expertise is crucial in ensuring an accurate setup. We employ accelerators like pre-defined templates, scripts, and AI tools tailored to each platform’s unique characteristics.
Construction and deployment of authentic business features onto the modernized platform occur, with a select group of pilot users exposed to these features. While considering refinements and advanced capabilities for the ecosystem, these aspects are better addressed in Phase-2. Neglecting meticulous foundation preparation could potentially jeopardize the entire undertaking.
The focus of this phase is on achieving tangible outcomes within a reasonable two-year timeframe, instead of a potential five-year timeline.
- Alongside achieving bite-sized goals, it is vital to assess the team’s burn-rate, considering potential business repercussions such as customer loss or missed opportunities.
- Development practices, code generation tools, reusable logic, and common utilities play pivotal roles in expediting the transformation process.
Transformation setbacks provide invaluable lessons that shape the path forward. Sustaining an up-to-date platform is an ongoing, dynamic process that demands constant evaluation and execution within a Digital Business organization.
The primary architectural goal for achieving a transformed state is the meticulous design of a system where elements can be upgraded and transformed independently. Success in this journey hinges on our unwavering ability to adapt continuously. As we navigate the swift evolution of technology, the critical question remains: Are we truly equipped for this transformative journey, or do we risk falling behind in the dynamic realm of innovation?