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The need to attain faster time-to-market; the necessity to overcome legacy challenges; the scarcity of relevant talents – some of the drivers for modernising a business. In fact, over the next five years, 90% of legacy applications are expected to be modernised, according to a recent Infosys survey.
The haste to modernise is justified. As per recent statistics, when a mission-critical legacy system goes offline for just one hour, the average cost of business loss is US$300,000. Apart from such financial aspects, changing customer demands and the growing prominence of digital-native opponents are compelling organisations to move away from legacy systems to modernised ones.
Why modernisation should be more strategic than discretionary
While it is clear that modernisation is a necessity, not all modernisation attempts are deemed equally successful. How it contributes to organisational growth and sustainability depends on how strategic one’s modernisation initiative is. A strategic modernisation is more than fixing visible issues; it is about being ready for the unforeseeable future by following a roadmap optimised for pacing, planning, and persistence.
Apart from helping in better articulation of the commercial outcomes and undisrupted achievement of the business objectives, there are a few long-term benefits to this approach, too. When strategic modernisation becomes a continuous practice, it makes an organisation resilient towards unpredictable macroeconomic events, responsive in the fast-paced business environment, and relevant in the ever-changing technology landscape and customer demand.
Infosys has observed while surveying 1,500 senior technology leaders that most future-thinking organizations are looking at modernisation’s strategic importance. They are building roadmaps weighed with defined ROIs, continuous planning and perseverance. So, it is time we look at modernisation from a strategic angle to create a sustainable organisation that remains resilient, responsive and relevant for the present and future.
Modernise to be resilient
In today’s business environment, being resilient means not just bouncing back from any drawback but also moving a step ahead from where one had started. But it is easier said than done. Fostering such organizational resiliency is difficult when the existing IT system is diverse, aged, and complex—added to that, when multiple external disruptions batter the business ecosystem at once, modernisation seems to be the best way out.
According to a 2021 Digital Transformation Executive Survey, the more modernised an organisation is, the more resilient and better able it is to navigate rapid change and perform better financially. In fact, becoming resilient is one of the top five reasons organisations are modernising with digital technologies.
Hence, it makes sense for organisations to modernise by leveraging various NextGen technologies, open-source ecosystems, and cloud-first strategies. While choosing the right modernisation approach, organizations should strategically evaluate different approaches based on their risk-taking appetite, time availability, and the degree of transformation needed to be resilient.
Modernise to be responsive
What makes an organisation responsive is its ability to scale and descale on the fly in any specific scenario with a focus on business continuity. But, monolithic applications and legacy data systems often hinder an enterprise’s ability to respond faster to customer demands. Additionally, in a legacy environment, business teams are rarely aligned with the IT teams on their requirements. As a result, the ability to deliver quickly gets crippled. But when modernisation is taken up as a strategic initiative, it helps bridge the gap.
Strategic modernisation makes organisational operations faster and more responsive by finding different ways to harness organisational data, resources, and emerging technologies. Re-architecting the monolithic application to microservices makes the application highly scalable and always available, resulting in accelerated responsiveness. Moving to modern NoSQL data systems and building event-driven and connected systems, organisations can significantly improve their ability to respond to customers and new business opportunities.
Modernise to be relevant
Change in customer demand is disrupting many industries. For example, payment innovations through the POS system, mobile wallets, and more, are getting standardised. Factories are being operated with robot workers with minimal human intervention. Essentials are being delivered to the doorstep in the blink of an eye. Car manufacturers and insurers are collaborating to bring OEM-branded insurance propositions to customers. More and more such organisations that leverage digital capabilities are popping up across industries challenging the age-old supply chain and dethroning many established but laggard incumbents.
Now, organizations are needed to reinvent their operations and business models to remain relevant and in line with the trends. In this context also, modernisation has become imperative to remain relevant in a market full of new-age, born-in-the-cloud companies. With technologies like data analytics, AI/ML, IoT, and Blockchain, modernisation seems to be the right strategic move for many organizations to achieve relevancy.
In short, the strategic importance of modernisation lies in its ability to improve an organisation’s resiliency, relevancy, and responsiveness. When change is the only constant in a digital era, there’s no shortcut to success apart from continuously evolving through modernisation and innovation. Which is why, it always needs to be on top of the organisation’s strategic agenda offering a full and clear sight of the future.
Gautam Khanna is the Vice President and Head of Modernisation Practice at Infosys
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