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Software Modernization

The need for businesses to drive competitive advantage and innovation through rapid, technology-driven transformation and software modernization has never been greater.  This imperative has moved the CTO role and enterprise IT from a supporting department to a critical C-level function.  Daniel Burrus, a leading technology advisor to Fortune 500 companies, eloquently summed this up in a Harvard Business Review article:

The CTO will need to oversee the transformation of every business process, including how you sell, market, communicate, collaborate, and innovate. That means the CTO’s role will shift from aligning technology to applying technology to accelerate business strategy, from communicating technology plans to the executive team to integrating a transformation imperative and applying the process to all executive-level planning. That’s a huge shift


To accomplish this, CTO’s and enterprise IT’s strategic/execution plans and budgets must satisfy an ever growing list of competing and sometimes conflicting objectives.  Clever strategy innovation, cross-department collaboration, software modernization and development is needed to successfully meet these technology objectives:

  • Enable and support corporate strategy and goals
  • Support and accelerate growth
  • React fast to competitor moves
  • Innovate and outcompete your competition
  • Sustain existing system functionality and user adoption at lower cost
  • Reduce IT, infrastructure and operations costs
  • Meet regulatory/compliance needs and minimize risk

In this blogpost, we will discuss why software modernization should be an integral part of the business strategy and how different parts of IT such as infrastructure, software, and data should be managed from modernization standpoint.


Innovation, Productivity, and Flexibility

Burden of LegacyThe word ‘legacy’ used to have largely positive connotations of wealth. Since the Internet Revolution it has become more of a burden. If you search on “burden of legacy” in Google Ngram Viewer you will see a dramatic spike in usage after 1995. It is now more frequent than ever. The earlier spikes occurred during the American Civil War, World War I, and the Cold War.


Innovation, productivity, and flexibility are mainstay business priorities for most companies and most organizations experience increasing pressure to move faster and faster in all three dimensions. IT has always played a key role in productivity improvement, but now IT is also the main source of innovation. Unfortunately, IT is frequently also an important contributor to lack of flexibility. Successful companies manage to leverage IT for innovation and productivity leadership while avoiding being trapped into yesterday’s business models by rigid IT legacy systems.  IT automates (parts of) business processes to generate productivity gains. In doing so it often freezes business processes to best practice at the time of implementation. As new business opportunities or competitors emerge, it is imperative that IT be able to quickly adapt by being as flexible as possible to ruthlessly modernize IT systems that have become counterproductive and stale.  Businesses history is filled with examples of companies and industries that have been steamrolled by more nimble competitors.


Software modernization is often neither an easy task technically nor an easy business case to make as ROI calculations must factor in many parameters that carry alot of assumptions and uncertainty.  How often have we heard CFO’s ask for hard numbers to the question: “If we update our software systems, how much will sales increase in 3-5 years”.   Because these are difficult questions to answer with certainty, many organizations find themselves addressing other priorities while continuing to wrestle with burdensome IT systems that hinder innovation and competitiveness.  In addition, the business process can become increasingly expensive to operate as data quality and completeness can degrade and/or users need to implement inefficient ‘workarounds’ to do their job.   However, the awareness of this problem is rapidly growing (see sidebar “Burden of Legacy”) and modernization of IT is now a hot topic everywhere.


Modernizing Your IT “Stack”

Leading companies like Citigroup and JP Morgan Chase have publicly declared Cloud as a critical part of their IT strategy.  A 2016 McKinsey survey of 800 CIO’s and IT executives across multiple industries found that enterprises are increasingly adopting cloud technology as IT shifts to public, hyperscale cloud-service providers like Amazon, Google, Microsoft and Rackspace or private clouds.

IT systems consist of hardware, system software, applications, and data. Through most of computer history, hardware (networks, servers, and storage) were physical assets owned by the company that used them. This was a tremendous impediment to change. Cloud technology has changed that.

Cloud service providers offer compute, storage, and networking with availability, performance, and security at costs very few internal IT departments can compete with.  Cloud used to be a difficult proposition for companies with high security or compliance requirements. That has largely changed with new Cloud technology and service providers.   It is very likely that there are no companies that cannot benefit from Cloud and many will be able to use it exclusively. As there is little differentiation opportunity in the hardware, companies should look to accelerate their move to the Cloud as fast as possible.

System software (e.g. operating systems, data stores, middleware frameworks, etc.) is also to a high extent best Cloud based. System software has also benefitted from the Open Source movement. Today, some of the most advanced system software is either developed as Open Source projects of turned into Open Source by the company that initially developed it. For IT departments, this means that complete “platforms” comprising state-of-the-art hardware, operating systems, data stores, development tools, and management tools can be Cloud based and consumed on demand. This offers unprecedented flexibility, productivity, and cost savings. Both Cloud and Open Source represent commoditization but it is noteworthy that these commodities are high-quality and high-performance commodities that meet the needs of almost any company. This is one of the reasons that start-up costs are a fraction of costs only ten years ago, and newer companies increasingly give traditional companies a ‘run for their money’ as the startup is unburdened by legacy technology, software debt and ‘hidden’, undocumented data that often resides in older legacy, siloed or acquired systems.

Applications can create competitive advantage but not all applications should be treated in the same way. Again, Cloud in the form of Software-as-a-Service (SaaS) should be part of any modernization strategy for applications that offer little differentiation (e.g. HR and Accounting applications). Applications that differentiate the company should be the main domain for internal IT development and it is of essence that internally written applications are written with flexibility in mind. Usage of Cloud based platforms, modern service oriented architectures like micro-services, and methodologies like Lean, DevOps, and Agile go a long way to ensure applications that can cope with rapidly changing requirements on an ongoing basis.

Finally, data is the ultimate reason we have IT. The exchange, refinement, and analysis of data is the core of any business process and at the heart of any company’s value creation. Data is also the smallest and most ubiquitous “IT-item” and therefore hard to manage. Advances in analytical techniques like Machine Learning, Prediction, and Artificial Intelligence enables value creation at a scale and magnitude previously unheard of. But a pre-requisite for the data driven value opportunity is to know and organize your data.

Unfortunately, many companies have done a poor job in implementing and enforcing their Information and Data Management (IDM) policies and procedures to ensure that their data is documented, understandable, trusted, visible, accessible, optimized for use, and interoperable.  Our research has shown that companies often don’t have visibility or understand up to 60-80% of their enterprise data.  Data discovery, enforcement of data policies/procedures and modernization should be a top priority for every company.

Finding and Understanding Your Company’s Data and Data Relationships Is Critical For Software Modernization

Understanding all your company’s data elements and data relationships is a necessary step for software modernization.  This is not a trivial task, and historically companies have had to resort to expensive manual work to accomplish this.  To help address this, a company called ROKITT has developed a product called ROKITT ASTRA that performs automated data discovery and data flow across an enterprise using machine learning.  ROKITT ASTRA goes well beyond the information found at the metadata level of a company’s databases, and can discover the ‘hidden’, undocumented data that can make up to 80% of a company’s data assets that often resides in older legacy, siloed or undocumented systems.

Summary and Next Steps

Businesses are under increasing pressure to drive competitive advantage and innovation through rapid, technology-driven transformation.  Thus, the role of the CTO and enterprise IT has moved to a critical C-level function from a supporting role.   Software modernization is a critical component to meeting your numerous technology objective, starting with enabling and supporting your executive team’s corporate strategy and goals.  Finding all your company data elements and data relationships is one of the first necessary steps for software modernization, and can be a highly manual, slow and costly process.  Products like ROKITT ASTRA have been developed to cost effectively automate this data discovery process using machine learning techniques.