IT modernization

Why your business needs to modernize its IT

Your company's legacy shouldn't be its outdated IT infrastructure.

While no company wants to be known for having antiquated technology, it's also true that many have not taken the steps to modernize their IT infrastructure. The cause for this disconnect are perceived and actual roadblocks that include feeling that it's an overwhelming task, not having sufficient budget, uncertainties over the ROI, or not having the expertise to handle the increasingly complex technical aspects. Or, perhaps all of the above!

Many companies keep legacy systems — tech defined by Gartner as “an information system that may be based on outdated technologies, but is critical to day-to-day operations" — in place for these reasons. But, modernizing IT infrastructure is no longer a luxury, or even an option; it is becoming necessary for day-to-day operations, business continuity, and data security. Additionally, as the customer journey has increasingly moved from in-person to digital transactions, updating a company's tech infrastructure is now also directly linked to a company's ability to provide the seamless, omnichannel customer experiences that are in-demand by today's consumers. Overall, having a strategy to update IT infrastructure will result in increased agility and efficiency while reducing risk and better securing data on a sustainable basis.

The ROI of modernizing your company's IT

Not updating or replacing complex legacy technology can stand in the way of digital transformation, which in turn compromises a company's ability to deliver frictionless digital customer experiences. Modernizing IT infrastructure better aligns a company with omnichannel needs and better positions the brand to meet its business goals. Of course, a major roadblock to updating a company's legacy technology is how its ROI is understood by stakeholders.

Areas where revamping IT can showcase clear financial benefits include:

  • Enhanced customer experience which can lead to increased loyalty and spending, since legacy technology often struggles with the demands of the personalized, seamless, cross-channel customer engagement that is expected today;
  • Long-term financial value in aligning the company's technology with today's ubiquitous cloud-first applications, as brands continue shifting towards a culture of collaborative productivity.

In terms of ROI, companies should consider the "technology debt" they are incurring - the total costs and risks, such as a lack of rapid product development capabilities and limited opportunities for growth, that they are actively accruing by not moving away from legacy technologies. According to a report by Deloitte regarding IT infrastructure modernization, "This liability prevents many organizations from advancing and supporting analytics, real-time transactions and a digital experience."

Brands should then note that many legacy systems have poor interoperability with modern IT, which can prevent them from adopting more current and cost-effective solutions within hybrid (in-house/outsourced) IT models. Moreover, shifting away from legacy applications reduces maintenance and operational costs, and key savings can be found in moving software from on-premise to the cloud, improve the ease of backups and make upgrading automatic.

Modernization also brings better security. Implementing a new operating system is a good way to address vulnerabilities. That's because updated systems can increase visibility of security threats across the entire network, allowing an organization to potentially detect malicious code hiding in encrypted data and to block malware before it can enter the company's network.

Given the proprietary secrets and personal information that is typically held by businesses in today's digital age, reducing the risk of a security breach by modernizing IT is paramount.

Reasons Why Some Businesses Delay Modernizing IT

A popular misconception around modernizing IT is that it entails a complete overhaul of the current system structure, which isn't necessarily true. It can certainly feel like an overwhelmingly large undertaking, but in many instances it does not require a complete re-architecture.

While some organizations may choose to materially alter their current IT to shift it to a new application architecture, there are multiple options available when deciding to upgrade a system. Gartner lists seven options that companies have with IT modernization, listing options such as re-platforming ("migrate to a new runtime platform, making minimal changes to the code, but not the code structure, features or functions") and re-factoring ("restructure and optimize the existing code to remove technical debt and improve nonfunctional attributes") as easier options than re-architecture, rebuilding or replacing the IT infrastructure.

Another major impediment to modernization is that the process entails technical challenges and new skillsets a company may not have in-house. In these circumstances, companies can choose to seek a managed services provider, which allows them to quickly gain the necessary knowledge and expertise, as well as benefit more immediately from the resulting efficiencies and improved security features. This is also a way to shift the burden of maintaining critical IT systems to an external partner, which can free up a company's IT resources while offering greater agility.

Finally, timing and short-term inconvenience can be another roadblock to tackling IT upgrades. It can often seem easier to maintain the status quo of an inefficient and risky — but functional — legacy IT system than to disrupt operations.

For many businesses, that choice was put to the test by the pandemic. COVID-19 has dramatically altered the typical work environment, shifting away from offices tied to dedicated on-premise IT, to a primarily remote scenario that relies on the cloud. Many businesses with outdated systems struggled to properly equip team members in a timely manner, and were then forced to confront their inefficient systems at a breakneck pace. That makeshift approach to digital transformation certainly isn't ideal.

While it may seem counter-intuitive to make structural changes during a time of upheaval, our current reality has provided businesses across the board a rare opportunity to improve in-house IT. The pandemic created a more level 'digital playing field' in many respects, and no one could have anticipated its far-reaching impacts.

At the end of the day, choosing not to make a decision or act when it comes to technology upgrades is still a decision and one that could have far-reaching effects on your business. A company's IT infrastructure should be the foundation upon which it innovates, evolves and grows. Modernization is essential to truly entering the digital age, managing risk and being more agile. Luckily there are multiple ways businesses can approach overcoming the hurdles that may be holding them back and helping them move toward a successful IT transformation.

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