The Tantalizing Promise of Technology Versus the Terror of Modernization

Many firms put aside the tantalizing promise of digital strategies and AI, reluctantly admitting that without modernizing foundational platforms, there is no groundwork for more transformative change.

But all too often, those modernization programs stall because of the scale and timeline of the work. A program to rip and replace the whole kit is too big for short-term budgets, especially if capex ROI calculations require clear return within quarters rather than years.

Moreover, the real benefits of these programs come only after time, so it’s risky for the business to lock in a long-term program when markets and strategic priorities shift more frequently.

And on a more personal level, it’s daunting for an executive to take on massive cost, disruption, and risk when the payoff may come only to his or her successor. But there are strategies that can help.

Break it down

If you start with a pragmatic, holistic view of both the business architecture and then the technology architecture, you may be able to break this deadlock. By decomposing a monolithic program into more manageable components, you can support near-term growth and business changes, minimize organizational disruption, build flexibility into the program, and – in the process – help meet capex ROI targets.

Let’s break it down further.

First, don’t let the emergence of cool or over-hyped technologies obscure the picture. Instead, look at the problem through a strategic business lens rather than a narrow technology view. Start with the technology you know needs modernization, but also consider who operates it. Then include the systems, groups and third parties that interact with the platform. An information-centric view helps: how does information flow through the ecosystem, including decisions and transformations? User journeys can be an easy way to understand the flow and highlight the value. (These can also act as a guide when executing the modernization program).

Second, don’t let critical problems with one system distract from the macro technology architecture. (You could call this, “Listen to your CIO!”) Map that business view to the systems landscape and look for problem patterns: does the core platform force its data structures, unique processing logic or timing onto other systems? This can lead to data sprawl, rigid processes and brittle integrations that don’t scale or adapt to changes in the business.

Look for ways to layer the architecture to achieve goals that will be familiar to any technology leader: encapsulate core processing capabilities with micro-services, create a shared semantic layer across systems, share capabilities through a common API framework (think about your API strategy), and distinguish processing from user experience. The result: you can deliver functionality through a clean, consistent user experience.

With this architecture in hand, you can move to the third step: look back to the user journeys and then set priorities for the program based on business benefit, reducing technical debt, and feasibility. Then you can build the program around these.

Reduce TCC – total cost of change

What is paradoxical here is that what seems like a big investment to create a clean architecture can actually save cost and time and deliver value earlier, more often, and in more manageable chunks.

It can also improve your ability to adjust to changing priorities. You’ll be able to:

• Run and complete distinct technology initiatives on different timelines
• Minimize the impact of the most radical changes to other areas, across the full development lifecycle, from impact assessment and design, to streamlined testing, release management and upgrades
• Allow more flexibility in deployment options, including cloud strategy

Combined, all of these reduce the cost and time related to accommodating changing requirements and priorities, giving you the ability to adapt more quickly and easily to market and business change.

Of course, there is no magic wand. Some technology modernization simply requires enormous development effort. But if you frame the problem in a smart, constructive way, then programs that looked impossibly disruptive and time-consuming become achievable – and in a timeframe that works for you and your business.

And having taken that huge step towards a full digital strategy, you have the tools and information that you need to experiment with the “fun” new technologies and see where they will have the greatest impact.

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Tags: Digital Innovation, Investments, Technology