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Digital technologies are having an irrefutable impact on working lives. Mobile, social media, cloud and big data technologies have been ushered into the enterprise to enable more flexible working practices for employees, more convenient access for customers and greater agility for the deployment of new services. However, it isn’t enough to simply layer these new technologies on top of an existing IT infrastructure.
Legacy applications and technology platforms must go through a process of modernisation to ensure they can be seamlessly integrated with the new digital systems being introduced. Business models must also be redefined; as the traditional designs based on processes become redundant in favour of new approaches built around the customer experience.
As a result, organisations must go through a major transformational shift as they move towards a digital future. This is no easy feat; it requires a significant investment of both time and resources since the IT department can’t just jettison its entire legacy IT infrastructure and start again. Instead, it must reengineer existing applications and redefine the IT ecosystem. The scale of this task has caused some industries to be late in embracing the digital switchover.
Unsurprisingly, these delays are most apparent in sectors such as financial services, where more established firms have a heavy reliance on legacy IT systems. For example, Forrester recently warned that European insurance firms are not being responsive enough to the forces of digital disruption. Unfortunately, those that fail to react quickly enough to the digital disruption risk being phased out of the market by newer digital start-ups that are more agile and responsive to customer demands. Indeed, Gartner issued the sobering warning that digital incompetence will lead a quarter of organisations to lose market position.
Overcoming the legacy burden
For established organisations, the major barrier they must overcome is in transforming their existing legacy IT ecosystem so that it is able to integrate seamlessly with new digital technologies. In order to do this successfully, they must go through the process of modernising their application environment. Historically, this has been about standardising applications across the enterprise and migrating away from aging legacy systems in order to reduce costs.
However, digitalisation has redirected the process to focus on developing future-proof platforms that are ready for the cloud and the integration of the entire business ecosystem; enabling seamless interaction between employees, suppliers and customers. There are three key steps critical to undergoing this process successfully:
- Platforms in the cloud – a cloud-based application platform is critical to success in the digital era. This model enables organisations to easily innovate with low capital expenditure by developing and deploying new services using application programming interfaces (APIs) or software-as-a-service (SaaS) solutions such as Salesforce.
- Application migration – once the platform has been established, organisations should be looking to transfer their existing applications into the cloud in order to reduce the costs of supporting them. Concerns over security and compliance with sensitive applications can be addressed through the use of a hybrid cloud model, combining public and private cloud environments.
- Integration of assets – even with a hybrid cloud model, it may not be possible to migrate all of the organisation’s existing applications into the cloud due to technical, legal or business constraints. As such, it will be critical to integrate these applications that remain on the legacy IT infrastructure with the newly digitalised services running in the cloud in order to create an agile IT environment that supports the business effectively.
The fast-paced evolution of digital technologies also means that this process must be continuous. It’s therefore important that businesses don’t look at application modernisation as an end state; they must be content with innovating through continuous change and regularly reassessing the IT ecosystem to ensure that it is able to meet the needs of the business and its customers.
The complexities and potential pitfalls involved in implementing this process are leading many to look to bring in technology partners to gain access to application and digital design expertise that may not exist internally. However, bearing in mind the speed of change and the need for technology to deliver a competitive advantage, it is essential that businesses demand flexibility from their partners.
With a modernised application landscape at the heart of their operating environment, businesses will be in a far stronger position to embark on the road to digitalisation. The future-proofed IT environment will enable firms to introduce new digital services incrementally, phasing out legacy systems gradually to minimise disruption and ensure they are seamlessly integrated with the broader ecosystem. In this way, established organisations can come out fighting against the rising tides of digital disruption; putting themselves firmly back on the map with a lasting competitive edge.
IBM has launched a new hybrid cloud system that could make application building a lot quicker for enterprises – without compromising security. The system, Bluemix Local, is designed to build apps across public, private and on-premises environments.