Strategic Guide to Legacy System Modernization and Digital Transformation
Digital Transformation (DX) can offer significant advantages to organizations for customers, employees, and stakeholders. DX requires fully embracing and utilizing digital technology across multiple dimensions. More than mere cloud adoption, one common blocking factor is legacy code: mission-critical client-server desktop applications not only still in use, but providing enduring competitive advantage. Familiar avenues for remediating those applications (“lift and shift,” rewrite) fail to either address the core problems or are risky, expensive, and time consuming.
Digital Transformation Process
As organizations embrace DX, they typically move through several stages. Inventorying all assets--both digital and analog--begins the process by identifying both assets (such as data and source code) as well as intellectual capital, processes, and business rules. Organizations need to determine which analog assets can be quickly converted to digital assets, and which current digital assets can be enhanced, maintained, or replaced to best effect full transformation. Finally, priorities are arrived at and plans are drawn up to begin the journey.
How to Modernize Legacy Systems
Legacy systems can be categorized along two axes: business value and technical quality. Business value measures how critical the application is to the success of the business, from adding no unique value to being a competitive advantage. Technical quality examines the application based on code quality, frequency and severity of defects (bugs), architecture, and currency of the language, components, and frameworks.
Following the categorization exercise, applications can be assigned outcomes such as retire, tolerate, rewrite, migrate, or maintain. The digital transformation framework (see below) will detail plans to achieve these outcomes on an application by application basis.
Legacy Modernization Strategies
Many mature organizations have a portfolio of existing software than can be considered legacy; frequently these applications are preventing or slowing the transformation. Custom/bespoke legacy systems can be artifacts of older software programming languages and platforms; their developers may have aged out of the workforce; and yet they can represent core business value to the organization. Some applications require a full rewrite to bring them into compliance with goals for DX, but many may benefit from automated migration to current languages and platforms. A full analysis of the legacy portfolio is necessary to bucket applications into the appropriate categories.
Digital Transformation Framework
A DX framework is a formal plan to move the organization through the process into a fully transformed entity. A framework must include plans that address customer experience, employees, processes, and IT. In addition, a key element of planning for digital transformation is considering how the supply and or value chain can be improved through digital measures. For example, enabling RESTful API endpoints can allow suppliers and customers to connect critical systems. The digital transformation framework should assign owners to individual areas of responsibility and include representatives of all stakeholder areas, including HR, IT, management, and operations.
How Digital Transformation is Different for Different Industries
Each industrial sector will have unique requirements for full digital transformation. Organizations with direct customer contact (retail, banking, healthcare, P&C insurance) will no doubt place significant emphasis on improving the customer experience. For example, retail banks were early adopters of "online banking" through custom applications that improved the customer experience (bank anytime, anywhere) while allowing cost reductions in reduced branch presence and hours. Similarly, retail quickly enabled online shopping via both custom apps as well as websites, but also connected (via APIs) manufacturers and distributors (supply side) and shipping and payment as well. Companies in B2B sectors (energy exploration, aerospace manufacturing, finance, agriculture, etc) find DX can add value by focusing on automation of process, employees, and external partners.
Download the Digital Transformation Whitepaper
For a complete report on implementing digital transformation while removing blocks due to legacy applications, download the Definitive Guide to Digital Transformation and Unblocking Your DX Journey from Mobilize.Net.