Modernization Starts with the Business, and the Tech Follows
July 20, 2022 Alex Woodie
The COVID-19 pandemic sent shockwaves through business, changing the way companies operate and resetting customer expectations. Businesses that can’t keep up with these evolving needs face long-term headwinds in terms of competitiveness. Implementing a modernization strategy is paramount for companies in these situations, but where do you start?
While business closures from COVID-19 were bad, they could have been a lot worse. A 2021 study released by the Federal Reserve concluded that 200,000 establishments closed as a result of the pandemic. That was lower than a study from a year earlier that found 400,000 establishments could close. “Actual exit is likely to have been lower than widespread expectations from early in the pandemic,” the Fed researchers said.
Federal programs, like the Payment Protection Program, helped many businesses stay afloat during the worst of the pandemic. However, such programs do nothing to guarantee the long-term viability of businesses, especially those impacted by evolving business environments and consumer expectations. The world has changed in big ways over the past two-and-a-half years, and having a viable digital presence is undoubtedly a better long-term strategy than expecting the flow of free money to continue from the government.
Many IBM i shops now find themselves in a situation where it’s time to modernize. Their existing business processes were created to match the environments that existed when the businesses were created. If the companies didn’t gradually adapt to change that occurred over years, they may now find themselves quite far behind, especially with the punctuated equilibrium created by COVID. To paraphrase Hemmingway, the technological debt built up gradually, then suddenly.
Navigating these issues isn’t easy, but they are necessary to ensure long-term viability. Chris Koppe, the senior vice president of strategy, transformation, and modernization services at Fresche Solutions, discussed some of these topics in his recent keynote address on digital transformation at the POWERUp conference in New Orleans.
“So what is digital transformation?” Koppe said. “We’ve seen lots of presentations about it. People talk about digital. In the end what does it mean to be digital and why is it important?”
Fresche develops a range of products designed to help IBM i shops modernize their applications. It has Presto, WebSmart, X-Modernize, X-Elevate, and X-Analysis Suite, which all deliver modernization capabilities, along with modernization services (not to mention security tools thanks to the Trinity Guard acquisition).
While Fresche offers a host of technology, Koppe doesn’t recommend that anybody start with technology when beginning a modernization project.
“I wouldn’t focus on the technology side,” he said. “We’re all technologists, and so we tend to focus on technology when it comes to digital. But really, you have to look at this more from the business perspective It’s a lot less about technology and a lot more about making things simpler for organizations, for users, for customers, for yourself, for how users engage with the system that runs the business today. It’s also about how customers, clients, partners all kind of other engage in the organization.”
In a modernization discussion, the first question to ask, Koppe said, is what do you want to modernize? It usually comes down to a new business outcome, a new capability for the organization, or a new feature set, he said.
“It’s never the same answer twice,” Koppe said. “There’s certain themes that certainly do come out. But for some it’s about the front-end of the application, the user interface. Or it could be about mobile or tablet access to a system. For others, it’s about application architecture, addressing agility, database modernization, improving data accessibility, data integrity, data security. And of course, there’s lots of new technologies and new things available — artificial intelligence, robotics, the Internet of Things — lots of flavors of modernization.”
The need for businesses to innovate is a theme that Koppe has touched on before in POWERUp keynotes. Some companies may claim that the way they’ve done things is fine, and they shouldn’t have to change it for the sake of change. They’re whistling past the graveyard, according to Koppe.
“There are some companies that claim they don’t need innovation. They’re stagnant,” he said. “Yes, they can probably run that way for a while. But in the end, we’re seeing in the last five years or more, a lot of disruption in various industries and segments. We’ve seen an explosion of Amazon, from bookstore to what it’s become today. And we see them going into other markets. We see Uber re-inviting how people view taxies and lots of other industries.”
Innovation and modernization come in cycles that impact particular industries. Koppe noted how one business innovating and modernizing its operations can trigger a competitor to take similar actions — especially when company A starts stealing clients from company B.
Besides their competitors, companies can also draw inspiration from what companies in other industries are doing, Koppe said. An innovative idea that works in one market may work in another market, he said. This is due to the horizontal nature of technology, which shouldn’t be the primary driver in a modernization project, but still plays a big role.
“In the beginning, IT was the innovators,” he said. “We’re the ones that automated companies. We changed the way business was being done from paper-based processes to electronic-based processes. We helped fuel organizational growth and optimize and we brought technology and technology ideas. We’re still those people. We can still innovate and bring those innovative ideas and catapult the organization ahead of its competition. We need to think about how we do that.”
Mobile enablement can be a big driver for application modernization. So can putting more business information into the hands of users, consumers, and partners. For some businesses, an even more impactful example may be allowing users to enter business information via mobile interfaces. Robotic automation and artificial intelligence can be fun, Koppe said.
“But what it comes down to [is] what are the major elements?” he concluded. “There is a technical side to modernization — there’s a strategic. Why are we modernizing? Why are we trying to change things? How does it align to the business strategy and business innovation?”
On the technical side of the house, modernization takes on a decidedly different flavor, and is much more process-centric as opposed to application-centric. As Koppe sees it, modernization for IT revolves around topics like cloud enablement, regulatory compliance, and HA/DR. Application and operating system testing processes can also be modernized, as well as monitoring and management of IT systems and backups.
Modernization is a process that’s best worked out with close collaboration between technologists and the business. Without input from the business, a modernization project risks becoming an exercise in technology for technology’s sake. But with a clear view of what challenges and opportunities exist for the business, the IT professional is given the path and mandate to create modern processes that advanced the business agenda, which is the ultimate goal.