We’ve all heard the buzz around IT modernization and how it supports digital business transformation. But what does IT modernization really mean? The IT modernization definition will certainly vary across businesses, industries, and personas, but it ultimately means leveraging technology to meet expanding business goals. It means aligning IT and business units to compete in today’s digital economy. It means digitizing and improving the customer experience to improve service levels and create market differentiation.
While it can be all or some of those things, it’s become increasingly clear that the likes of Amazon and Google have made modernization mandatory for organizations to increase agility and meet expanding customer demands. Let’s dive into a few of the reasons companies decide to modernize IT infrastructure and some common examples of IT modernization.
What is IT Modernization?
Consider how much telephone technology has evolved since 1876. Connecting processes began with manual switchboard exchanges and have evolved dramatically with direct dialing and Voice over Internet Protocol (VoIP). Designs and utility have gone from a two-piece handle/cradle combination to today’s internet-equipped mini-computers that fit right into our pockets.
Every step of the way, advances in phone technology (and of course, semiconductor technology) have transformed how we communicate. Embracing new technologies and processes (imagine if we still used AOL dial-up modems to connect to the internet) to modernize how communication occurs also transforms how business happens.
In much the same way, business IT modernization is the process of managing or moving away from aging software and hardware solutions and often involves consolidating systems and workflows in favor of more automated, innovative solutions. With phones, it might be taking the premise of two-way radio and modeling it into a mobile telephone.
In business, it might be the journey of how companies integrate customer order and fulfillment data. Gone (or mostly gone) are the days of taking fax, email, or over-the-phone orders and manually entering data into a back-end ERP system, and then having that system spit out acknowledgments, invoices, and shipping documents that we have to print out and fax or email back. Modern B2B integration software technologies, like EDI, automate this and speed up these order-to-cash processes.
IT modernization also means embracing cloud, cloud-first, and data center approach, where much of the hardware and software is hosted by a third party while your business consumes as much or as little as needed. But while IT modernization often is the generic term for upgrading technologies, it also means upgrading skillsets. Modernization projects often entail applications, systems, and migrations that require IT skill current staffers may not have. To account for these resource and skills gaps, modernization might then happen in the form of managed service and as-a-service offerings.
In short, it’s about survival. The modern company must develop new processes to handle omnichannel approaches (thanks to the “Amazon Effect”) and gain the agility to reduce time to market. Too many businesses are held hostage by their homegrown and legacy solutions, and cannot efficiently onboard new partners and new sources of revenue. This limits their ability to scale and grow.
Organizations with the bigger company picture in mind modernize IT systems end-to-end to better achieve goals and compete in today’s business ecosystem. What we mean by “end-to-end” is integrating all inbound and outbound data flows to enable the visibility to effectively track the entire order life cycle, automate workflows, proactively troubleshoot problems, and meet customer SLAs.
Such IT modernization, with the secure data movement and data transformation capabilities that enable all manner of application and EDI software integrations, vastly improves important revenue-generating processes, including order to cash, load tender to invoice, and procure to pay.
Examples of IT Modernization
Today’s businesses can modernize in a variety of ways and for a variety of reasons. Some of the most common in 2018 include:
► ERP replacement: Electronic Resource Planning systems are the information backbone of most companies, and upgrading to a new solution (whether cloud-based or on-premise) is increasingly common as more ERP products that better align to a company’s vision hit the market.
► AS/400 decommissioning: The IBM iSeries AS/400 has been a highly dependable software solution across industries for decades, but a lack of product knowledge and integration capabilities has many companies phasing it out in favor of a more modern, user-friendly platform.
► Mergers and acquisitions/divestitures: When businesses merge, a whole bunch of systems and processes come together under one proverbial roof, and the business often chooses to consolidate many of them onto a single integration platform. Conversely, when a divestiture happens, one or more of the divested organizations may be left without a proper EDI technology (and its associated resources), for example, and have to procure and implement a managed-service solution.
► Replacing a legacy EDI solution: The standardized EDI format and digital file transfer transformed B2B communications when it replaced paper documents, and EDI still very much drives global commerce today. But many aging EDI solutions, including EDI VANs, cannot deliver the modern governance, visibility, and integration capabilities in a cost-effective way that supports such important revenue-generating data flows.
► Migrating homegrown integration tools: The custom-built solutions that facilitate your data flows are too often pieced together by layers of hand code that is development-intensive, hinders partner onboarding, and limits scalability and growth. Modern B2B integration platforms provide out-of-the-box functionality so you spend less time managing the data minutiae and more time managing your core business functions.
Best Practices for IT Modernization
When modernizing IT systems, organizations are looking to replace or improve upon existing functionality via a more simplified workflow. And, thus, it’s critically important to thoroughly understand the source system in order to properly implement the new one. Only then can businesses properly evaluate project and business needs, and lay out the goals, timeline, and overall vision for the modernization initiative.
Once these are fully understood and the migration roadmap becomes clear, organizations can carve out time and resources to:
► Develop new processes that fit your company’s current business patterns and culture
► Consult with partners and thoroughly scope the extent of map development
► Go through multiple development iterations and testing cycles to ensure a successful go-live
Services Teams for IT Modernization
Before any IT modernization happens, a host of expertise is needed to understand existing data flows and the downstream effects of any application upgrade. Some organizations may have internal resources who best understand specific data movement patterns and others may lack those resources. Either way, modernization and system migration are no small undertakings, and most organizations require at least some help.
Professional services teams are integration experts have vast experience with all type of IT modernization. Such resources are invaluable to the overall modernization effort and will help expedite the process. Professional services teams are extremely beneficial, for instance, when:
► Legacy system specs are outdated and require a lot of interpretation.
► The project requires additional development cycles because the organization is constantly “finding” new requirements.
► Customers lack knowledge of existing processes and need assistance with analysis.
These experts also are highly capable of advising on best practices and implementing process improvements, and their advice could be the difference between a direct, seamless ERP integration instead of indirect integration with intermediate tables.
Modernize Your Business
IT modernization helps drive business growth and strategy across various departments, and it frees up internal IT resources to focus on the bigger picture – the company’s core service. But IT modernization is difficult and encompasses a number of technologies, people, and processes that make the business run.
The very definition of a legacy application, as defined by Gartner, is “an information system that may be based on outdated technologies, but is critical to day-to-day operations.” But because such solutions are so critical to the enterprise, companies often put up with the hefty time, maintenance, and support costs rather than modernize for fear of business disruption, often to the detriment of the business.
Still, you don’t want to be the business carrying the proverbial pager while everyone else has a smartphone. When the time is right for IT modernization, confiding in a professional services team will help understand your needs, simplify the effort, and accelerate the process.