Thoroughly Modern: Digital Modernization, But Not At Any Cost
May 11, 2020 Daniel Crépeau
(Sponsored Content) There is a lot of discussion around digital transformation, and for good reason: Digital companies are typically 26 percent more profitable than those that don’t have digitized and transformation management capability. However, according to a recent study conducted by Harvard Business Review, even though businesses spent $1.3 trillion on digital transformation last year, 70 percent of those investments went to waste.
Organizations don’t have the resources or budget to take on large-scale transformation projects that are doomed to fail. In most cases, resources are limited even though the very future of these companies depends on the success of these initiatives. With the need to modernize more pressing than ever, how do you move forward efficiently so your company can continue to grow and compete with the world’s disrupters? How do you take advantage of the opportunities that digital technologies present in a smart, cost-effective way? How do you improve business processes, operations and align key stakeholders while maintaining day to day business?
At Fresche, we set out to answer these questions in a new executive summary, Why Smart Modernization Is the Path to Successful IBM i Digital Transformation. In the report, we look at why one-time market leaders such as Kodak, Yahoo, and JCPenney failed to innovate and faced the consequences. We also examine the elements that lead to the most successful outcomes. And finally, we offer a way forward.
Business transformation is driven by a necessity to adapt to an ever-changing environment. Organizations must execute on business transformation at a pace that maximizes the probability of success and survival. All disrupters, in any industry, are IT intensive, more agile and more nimble than traditional enterprises. At the very least, if disrupters don’t knock incumbents out, they may hurt the revenue and profit lines of incumbents who do not act fast enough on their journeys to modernize their applications and change the way they interact with their customers.
At this point in history, it is adapt or disappear – just as it was when electricity was first introduced to industry in a world of steam power in the 1880s and 1890s. This was also when punch-card computing first started and eventually evolved into the tabulating era of the 1950s, then the mainframe era of the 1960s and the minicomputer era of the 1970s and 1980s. Each wave of innovation and disruption has been a barrier and an opportunity.
One thing that many organizations that run IBM i applications have in common are resource shortages as they look to digitally transform monolithic, mission-critical applications and databases. They have to wrangle for budgets. They struggle to find and keep good technical staff and management. They have thousands or tens of thousands of applications and dozens to hundreds of databases, and it’s often difficult to know where to start.
This is where “smart modernization” comes in. Smart modernization leverages existing IT assets and accelerates digital transformation through automation. It’s a low-risk, phased approach that is giving companies new ability to digitally innovate, improve operational processes and better position themselves for the future. Modernizing and innovating enables businesses to capitalize on the opportunity for business growth while addressing the technical and organizational debt that they have incurred by neglecting to invest in improving business processes and infrastructure over the years.
Modernization is deeply personalized to the business and digital transformation is not so much about the desired end state or even where a company is starting from. It’s about shifting focus from the technology to the customer experience and the problems that you are trying to solve as a business. It’s about aligning business strategy with the technology that supports business processes and make companies more efficient.
According to Forrester, “the most successful digital transformation is customer-obsessed. Forrester’s research has shown that companies that are customer experience leaders grow revenue faster and enjoy greater brand preference than their peers. Digital transformation is key to delivering on these customer expectations, which are evolving at a rapid pace.” Organizations must leverage their existing IT assets by modernizing to engage customers and provide effective digital experiences.
At Fresche, we start by understanding our clients’ business, understanding their vision, and then we design a solution that will support that vision. Automation accelerates the technical portion of this process and it is a vital component because companies need to modernize in a reasonable timeframe with the least amount of disruption to the business. In addition, flexible financial models that determine the perfect blend of CapEx/OpEx required to support the initiatives and overall business needs.
From a technical standpoint, companies will often start by modernizing the programming language, the architecture, and the database. When you modernize the programming language, you don’t disrupt the business because your business processes remain the same. But suddenly you have access to a larger pool of resources because you are not developing in an older language. When you modernize the architecture, you have access to emerging technology like microservices. And when you modernize the database, you go from a cryptic database to something that opens the door to business intelligence, artificial intelligence and machine learning, and all those innovations that seem unattainable when you are working with legacy applications.
Ultimately, it’s important to remember that digital transformation it is not modernization at all costs. In a world where digital transformation projects often take twice as long and cost twice as much as anticipated, IBM i shops need smart modernization at a smart cost. Smart modernization is available to every company of every size and at every starting point. It is not just for large enterprises with deep pockets, and it cannot be done through brute force. It must be done with the customer and the business top-of-mind, using automation and always with the goal to minimize business disruption while maximizing constructive and creative change.
To learn more about what is driving digital transformation and how to move forward in the smartest way possible, I encourage you to read our new report. Download the report here.
You can also book a virtual whiteboard session with Fresche’s Client Advisory team to discuss your digital transformation options. Contact us here.
Daniel Crépeau is president and chief executive officer at Fresche Solutions.