Building An Informed Future State
- May 05, 2023
In a recent panel discussion with Brent Ellis, senior analyst at Forrester, and Glen Foley, VP of Application Modernization at NTT DATA, we dove into the current state of application modernization. Many businesses think modernization is buying ‘cutting-edge’ tools or applications and swapping them for old systems. But this oversimplification can impede many businesses from achieving their optimal modernized state.
How?
The concept of a modernized state varies from one business to another. There's no unified definition of the state of modernization; it's defined by the industry a business operates in, the digital experience they want to craft for employees and clients, and the operational regulations or compliance protocols they follow. Businesses must also factor in their domain of expertise, legacy IT infrastructure and clients.
These factors ultimately define an enterprise’s maturity level, and different stakeholder personas across the business have mandates that dictate their ideal modernized state. Reconciling competing or complementary technology modernization interests across business units or service lines is no easy feat. It takes a savvy, cross-functional team to sort through the modernization backlog and prioritize items that drive revenue growth and CX.
Fig 1: Different personas sponsoring modernization journeys have varied priorities
Translate technical upgrades into business outcomes
A discussion about modernization is futile without focusing on the current tech stack. But translating IT expenses into qualitative business objectives is where it becomes challenging. For many organizations, mapping the technical benefits of an application modernization initiative — at any scale — to business use cases is tricky yet crucial. Will migrating to the cloud enable business resiliency? What will the business impact of using DevOps containerization or composable SaaS be? Is enabling digital human-centric experience your most important priority? If yes, what scale of application portfolio modernization is required to make it happen? We can categorize these questions into four broad buckets of expected outcomes — business resiliency, digital experiences, data-driven BI and workplace modernization. And interestingly, a business’s desired outcome varies from time to time, depending on the market trends. So why should the ideal state of an application be the same for every company? What organizations need is composability: a tech stack that can satisfy diverse stakeholder personas and provide continuous business improvement.
In IT services delivery, we often talk about building the plane while flying it. However, another vehicular analogy is topical to modernization efforts — the ‘Ship of Theseus.’ The fable recounts a crew opting against repairing the battle-torn ship all at once. Instead, the wise folks repaired only the most damaged parts with new wood and reinforcement. This helped them keep the repairing cost of such a monumental ship at a bare minimum while still maintaining successful operations. This metaphor serves as a topical comparison of a big-bang evolution strategy versus a staggered, phased approach.
Leveraging an incremental, continuous modernization approach can turn IT spending into observable value streams associated with quick and tangible ROIs. This approach can also work for businesses with a global footprint, wherein they implement their modernization strategy at one location and scale from there. These phased approaches offer businesses a lot of breathing room regarding cost sensitivity. Savings-driven modernization in this period of financial austerity is critical for establishing sustainable funding sources to drive digital transformation.
However, as businesses adapt to a continuous modernization approach, it won’t be uncommon to become hyper-focused on an incremental modernization drive and lose sight of other less explicit but crucial aspects of the operational flow. Here, an experienced technical partner can guide them through this journey and shine a light on the often-overlooked areas of modernization. These aspects include:
Fig 2: The commonly overlooked areas of digitalization
Collaborating with a technical partner will allow businesses to tackle these underserved areas of modernization more efficiently and balance their overall progress.
Level technical debts by managing IT backlogs
Usually, IT backlogs and technical debt are synonymous. Businesses incur technical debt the moment they adopt any particular technology stack. But debt isn't necessarily a bad thing. The best move forward is finding the tipping point when technical efforts start losing value and readdressing them early on. This will help companies reduce or extend their technical debt and cover budget shortfalls as opposed to the templated ‘big bang’ approach to modernization. wherein every aspect of a business is digitalized in one go. Once again, knowledgeable technical partners can help enterprises find the sweet spot between maintaining, improving and replacing an aging piece of technology. It all depends on how you approach technical debt. In the real world, businesses leverage financial debts to invest, acquire new companies or supercharge their operations. In the world of application modernization, we can replicate the same idea. A technical partner can help businesses assess the lifespan and impact of every new technology augmentation. Based on that information, businesses can map their tech investments to current and future projects. This will allow them to manage IT backlogs and stop the technical debt from becoming a ‘toxic technical debt.’
This practice of portfolio optimization, incremental improvement, and future state road mapping is something that NTT DATA has a broad range of expertise with. Whether you are doing an in-depth discovery and analysis of your IT footprint or a more tactically focused modernization effort that requires rolling, flexible APR capabilities. we can ensure a best-fit strategy for your organization.
Let the broth decide the cook(s)
It's essential to let the stakeholder coalition decide on modernization initiatives from an organizational and product or service level. This will help in determining the scope to scale modernization in each iteration. For instance, client relationship managers can explain how a modernization drive will help them reach out to more customers in a timely and efficient manner. The Chief Client Officer (CCO) can determine the branch with maximum client volume for the pilot project. The CCO or their peer executives can also focus on the cost and larger rollout upon the success of the modernization initiative. As a result, businesses can inherently focus on a more holistic and cost-effective modernization strategy. They can also pick technical partners according to the scope and scale of each project and manage their technical debts better. The larger the transformation effort, the more important a strong buying coalition is, and broadly reaching business unit and portfolio leader sponsorship correlates with higher success rates for modernization outcomes.
Ultimately, it boils down to the route that businesses take
There's no doubt that continuous modernization is a priority business imperative. You can no longer implement system changes through an unstructured, piecemeal approach, where you must backtrack and reengineer to correct for uncoordinated modernization efforts. The need of the hour is to crystalize the business persona and expected outcome before greenlighting any modernization effort. Rather than following a templated digitalization approach, now is the time to evaluate your individual and organizational needs. A knowledgeable technical partner can guide you through the fast-changing digital innovation landscape to help bring the most critical upgrades salient to driving your business forward. NTT DATA can be your trusted partner on a digital evolution journey, helping you evaluate vendors, platforms, architectures and forward-looking strategies. And you don’t have to take our words for it. Watch the first part of our panel discussion for a deeper understanding of how we envision the informed future state of application modernization.
