This is the first part of a two-part series looking at application modernization. You can read the second part听here.听
听
Senior IT executives are anxious. A jaw-dropping 95% of them admit their business is falling behind. They鈥檙e being outpaced by an elite set of competitors鈥攐nes that have already transformed their IT dependent business operations鈥攖hat have. These transformed companies are powerhouses: 96% of them exceeded revenue targets last year, and they鈥檙e more than twice as likely to meet revenue goals.
听
These companies听: they complete more IT projects on or ahead of schedule, and on or under budget, and their overall IT spending is lower. Digital organizations with highly evolved听, leading to more secure and security proactive organizations.
听
As a result, the 5% Transformed Elite are accelerating away from their competitors, perhaps permanently.
听
In this article, we鈥檒l explore steps and techniques that allow companies to transform and modernize their applications, what it looks like when you get there, and the implications that has.
听
The Transformed Elite don鈥檛 have some kind of exclusive license or access to digital technology, market-responsive behavior or customer intel. Their secrets aren鈥檛 branding or marketing, but selected innovations and characteristics that were purposefully identified and built.听
听
Everyone鈥檚 heard of Amazon鈥檚 鈥渢wo pizza鈥 teams, and that鈥檚 an important part of its collaboration strategy, but what鈥檚 more important is the capability those teams give to the business: Jeff Bezos has said that Amazon鈥檚 success is proportional to the number of experiments it can run in its business, every hour, every day.
听
Part of Amazon鈥檚 success comes from not being hindered by legacy systems. While this legacy has enabled other businesses to compete up until today, it won鈥檛 help them in the future: legacy estate reduces profits, eats up the operational budget and stifles your ability to innovate fast鈥攜our innovation cycle time is measured in months, if not years. What鈥檚 more, it impedes your ability to transform: in the competition for tech talent, nobody wants to work for a digital dinosaur.听
听
Application modernization is fundamental to your ability to transform, your ability to deploy innovations in customer engagement or supply chain management, to deliver automated and flexible operations. And to use data to drive future growth.听
听
Look at where the Transformed Elite standout. It鈥檚 their ability to harness innovative technology and make it a part of their business fabric. You can see this happening all around. Companies, such as听, are using machine learning to improve the handling of inbound emails and drive up customer satisfaction. Or at tire maker听, who has created a trucking service offering by deploying IoT sensors in its products.
听
During our work with the Transformed Elites, we鈥檝e identified a common set of characteristics that they all exhibit. These digital business characteristics are essential to create new digital revenue, attract and retain talent, respond rapidly to marketplace changes, and expand one鈥檚 ability to commercially operate in new channels and markets.
听
The essential digital business characteristics of the Transformed Elite are:
- The customer at the center鈥攁bility to create meaningful and lasting customer experiences across multiple channels.听
- Business outcome orientation鈥攁ligned investment around clear business outcomes. The pursuit of net-new revenue streams, products, services, and business models.
- Responsive to business shifts鈥攃an change direction and respond at the pace of the market, responds to business shifts using continuous innovation and rapid responses. Works in smaller chunks, with faster feedback and decisions.
- Test-and-learn culture鈥攅xperimentation mindset and frictionless execution mechanisms. Makes knowledge-based and data-driven decisions. Uses 鈥渢est and learn鈥 culture to acquire knowledge before making major investments along the transformation journey.
- Technology as a core capability鈥 alignment that technology is a key strategic unfair competitive advantage. Understanding of the benefit that technology brings to the organization. 鈥淭echnology in the boardroom.鈥
- Strategic use of data as part of business strategy鈥攄ecision making, product and customer interactions are driven by data. 鈥淒ata in the boardroom.鈥澨淒ata in the basement.鈥 Data to infuse decisions at every level in real time.
Figure 1: Four-step change process
听
听
1. Assess
Assess your current businesses needs, outcomes and processes and relate it the current technology and architecture you have. Identify what new business needs you to have and what processes and journeys must be implemented to build the unfair competitive advantages you desire. Identify customer needs and standards against which all decisions will be evaluated. This defines where you are and where you want to go.
听
2. Map
Map the technology required to transform from the current phase to the desired target phase, to create unfair competitive advantages. Use modern software risk management, assessment methods, and tools to deeply understand the risks introduced or affected by the decisions being made. Make conscious decisions to improve resiliency, availability, security, accessibility, and reliability and develop a live risk profile to ensure resources are focused on the right things. Ensure the business thrives within its target and future market for its expanding customer base.
听
3. Build
Use specific technical patterns pertinent to your legacy architecture. Adopt platform thinking and API ecosystem architecture, microservices as appropriate, and evolutionary architecture strategy to evolve your enterprise architecture to be future ready. Feedback learnings and knowledge from delivery and verification testing to confirm performance against key outcomes and targets. Adjust the live risk profile to help prioritize build effort.
听
4. Evaluate
Evaluate progress in developing and maturing your essential digital business characteristics. Measure whether you鈥檙e affecting or improving your operational risk profile, identify characteristic noise factors that contribute to risk, and continually prioritize the next highest risks for mitigation. Use your KPIs to ensure your digital revenue and other digital business goals are being met.
听
Real world application modernization
听
This type of process-led change is helping organizations ready themselves to compete in today鈥檚 fast-changing digital world. For instance, UK-based ticketing company听听is a prime example of how that process can be used to great success. It was struggling to meet customer and regulatory demand because of high costs and a legacy platform that it was unable to scale effectively.
听
With 魅影直播鈥 distributed agile approach, Trainline was able to modernize and scale its platform while using continuous delivery and automation throughout their technology organisation. As a result of our distributed partnership, Trainline has accelerated its development to an average of 10 releases a day. Its average time-to-market for applications has shrunk from five months to six to 12 weeks. It鈥檚 implemented automated testing approaches that have reduced testing times to half overall development time. Lastly, its application modernization program has delivered bottom line results too, with an 80% increase in booking conversion.
听
The largest logistics company in China was a victim of its own success. Its fleet covers 65,000 vans across 250 cities, making it a hugely complex operation. Could it continue to grow traffic and still increase shipping speed? Yes, and it began by integrating 18 separate systems for domestic and international customers. The project enabled 130,000 of its couriers to make real-time decisions and saw a 200% increase in web traffic growth鈥攁long with an increase in digital revenue.
听
Summary
听
The business argument for application modernization is clear鈥攎odernization allows transformed companies to exceed their revenue goals. But it鈥檚 important to realize that application modernization can be a difficult undertaking: we all know that moving to 鈥渢he cloud鈥 is important, but how should you choose between public, private and hybrid clouds? You know that data is important, but should you build a data pipeline, data lake, or just fix up your existing data warehouse? Security and consumer trust are critical, but is a private data centre actually more secure than cloud hosting backed by a global-3 cloud provider?
听
In the next article in this series, we鈥檒l explore these technical considerations in greater detail, and highlight methods for modernizing your legacy estate that increase your chances of success.
锘