Enterprise Executive 2017: Issue 2 : Page 52
There are many good reasons to modernize your IT systems but the path is fraught with land mines that could cost you millions, your job and your business. I have seen modernization projects that went on for many years, were over budget and never delivered a single line of code. Some of those companies threw their hands in the air and gave up. Others forced systems into production that were not ready and paid dearly for it. Knowing your options and accurately accessing the risk is important. There is more than one way to accomplish modernization and the path you take may depend on factors unique to your business, what you are specifically trying to accomplish, corporate IT knowledge and your budget. There are many consultants who have a point of view and an area of expertise. Be wary of someone whose experience lies in only one modernization technology. To them, everything looks like a nail. So lets look at some drivers, approaches and challenges around enterprise modernization to help you make an informed decision. Modernization Drivers of the box with lower support pricing. As those vendor products are sunset, the skills pool for those products is reduced. This is especially evident as universities tend to teach newer technologies with little focus on legacy. Programs such as the IBM Academic Initiative are intended to reverse this trend, but there are still too few skills and this is a huge risk for companies trying to maintain older systems. Adopting newer technologies such as mobile, Big Data and real-time analytics are driving companies to spend more to innovate. With both maintenance and new business costs increasing and budgets remaining relatively flat, something has to give. Staying ahead of your competition is not optional so reducing your maintenance spend seems like the only viable alternative. Approaches A 2016 study by Gartner estimated that 70 percent of an IT budget is dedicated to just running the business. This includes operational expenses of maintaining the existing IT systems with no new business services. Companies are being driven by competition to innovate and provide differentiating business services, but have little of the IT budget left. As systems age, they become more brittle and the cost of running the business increases as a percentage of the IT budget. At the same time, older systems are losing support as hardware and software vendors try to stay current and provide capabilities that differentiate them from their competition. As vendor products are sunset, the cost of specialized service contracts to support them skyrockets. By upgrading to newer vendor products, many new features are provided out 52 | E n t e r pr is e E xe cu t i ve | 2017: Issue 2 There are several different approaches you can take to modernize your enterprise. Some offer less cost and risk, but might be just putting lipstick on the pig because the bulk of the legacy system still exists. But even lipstick on a pig might save your bacon since those legacy systems contain the logic that differentiates your business from your competition. If you decide to rewrite your systems, you increase your risk since you have to get it right or your business could fail. Here are four approaches that have different costs and risk associated. The first two are fairly noninvasive, but the last two require you to modify the legacy system. Refacing Refacing an application is the lowest cost and risk of all the options. It does not involve changing the core application but rather just adds a thin layer between the existing application and an updated interface. Many businesses have already done this to web-enable legacy applications using vendor tools that provide much of the automation in creating the interface.