Published on October 29, 2023, 8:53 pm
Application Modernisation Services: Driving Business Change and Innovation
In today’s rapidly evolving technological landscape, businesses are constantly looking for ways to stay ahead of the competition and drive growth. One key area of focus is application modernisation services, which involve migrating legacy systems to new platforms and integrating new functionalities to support the latest business needs.
Gartner, a leading research and advisory company, emphasises that application modernisation encompasses various options such as re-platforming, re-hosting, recoding, rearchitecting, re-engineering, interoperability, replacement, and retirement. These options allow organisations to make informed decisions about their application architecture based on their specific requirements.
To help navigate this complex process successfully, Gartner advises application and software engineering leaders to take charge of reshaping their strategies, tactics, and cultures. By doing so, they can effectively drive business change, foster digital innovation, and deliver tangible value to their organisations.
It is crucial for businesses to recognise that driving business value entails delivering software that aligns with functional, operational, and economic needs. To achieve this goal successfully requires building the skills necessary to leverage technology advancements rather than being overwhelmed by them.
Let’s explore how these principles specifically apply within the financial services sector. In this industry, businesses cater to customers ranging from 14-15-year-olds all the way up to 75-80-year-olds. To meet the diverse needs of this customer base effectively, financial institutions must provide banking and insurance services in a manner that each age group feels comfortable with.
The COVID-19 pandemic significantly impacted customer preferences in this sector. Older customers who previously preferred in-person branch visits were forced to adopt digital communication methods due to lockdowns. However, even when restrictions eased up and things returned to normalcy, some customers still preferred updating their passbooks in person.
According to Praveen Kumar from Rocket Software Asia Pacific,vthis shift highlighted the importance of adaptability in meeting customer expectations. However, it also brought to light the challenges that the financial services sector faces in driving modernisation efforts effectively.
Kumar highlights a survey indicating that around 30% of modernisation efforts are wasted because many businesses initially approach modernisation as a rip-and-replace process. He cautions against underestimating the complexity and integration challenges that arise when migrating legacy systems to distributed environments. Merely moving applications without addressing underlying complexity can hinder progress and fail to deliver desired outcomes.
The ideal approach, Kumar suggests, is managing the entire product landscape on the distributed side while overcoming key challenges associated with legacy systems – skills, cost, and speed to market. This holistic perspective enables businesses to create a more seamless and consistent customer experience across different channels and platforms.
Additionally, financial services face other significant challenges, including growing competition and talent retention. CIOs often have budget constraints when it comes to modernisation initiatives or attracting top tech talent who may receive better compensation offers elsewhere.
To address these issues successfully, CIOs need to adopt new strategies for modernising their IT infrastructure. The traditional rip-and-replace approach is no longer effective due to the rapidly changing technology landscape. Instead, they should focus on transitioning to a smoother approach where backend solutions can handle complexity efficiently while allowing flexibility in front-end technology choices.
Furthermore, there is increasing pressure on CIOs to demonstrate return on investment (ROI) for IT investments. Amidst this pressure, heads of technology need to take a sensible approach by identifying business value drivers and aligning IT investment decisions accordingly. This strategic approach ensures that digital-driven improvements are reflected in enterprise financials as expected by senior leadership.
In conclusion, application modernisation services play a vital role in enabling organisations across industries—particularly within financial services—to thrive amidst constant technological advancements. By adopting well-informed strategies guided by industry experts like Gartner and embracing adaptability throughout the transformation journey, businesses can drive innovation, deliver seamless customer experiences, and achieve sustainable growth in the years ahead.