Steps towards modernizing company’s technology

The life cycle of information technology is becoming shorter every year. New competitors are disrupting industries by leveraging state-of-the-moment digital practices and processes. Customer expectations are constantly evolving in an accelerating race for the most advanced, hyperconnected, seamless experiences. IT functions are under unrelenting pressure to support leading-edge capabilities such as data analytics, cybersecurity, automated processing, and integration with third-party systems. The easiest way to do this is through platforms that connect everyone to the same cloud-based cross-industry digital infrastructure. In this context, your company’s legacy IT system, which seemed so capable a few years ago, is rapidly becoming obsolete. The systems modernization you need today is more than an upgrade; you’re playing a new game with new rules, in which you modernize not just the tools and functions, but the way you do IT. The vendors are largely the same, but the options and principles of the past no longer apply. Hardware no longer stands alone. Sensors and Internet connections are embedded in practically every tool, including those that used to be purely mechanical. Software is no longer sold as a package to install. It is offered as a platform, by subscription from the cloud, is automatically upgraded, and is programmed in new ways.

Put Customer Value First:
Although any number of factors may trigger a decision to modernize IT, one explicit goal is paramount: to deliver value. Every investment in technology should amplify the benefits for end customers, whether through better experiences, higher product quality, or operating efficiencies that reduce prices and add value. Start by developing a solid business case for the modernization effort, showing expected value and innovation. Explicitly include (and agree upon) the most important outcomes for customers. Articulate, with clarity and precision, how each facet of the new IT system will contribute. You should be able to point to measurable improvements in key metrics — for example, customer retention, user experience, sales, productivity, and recruiting.

Simplify Your Architecture:
As organizations have evolved over the past 10 years, the underlying architecture of information technology has tended to evolve with them, often in a haphazard and as-needed fashion. A single organization might have had IT systems based on a variety of coding languages, data structures, integration requirements, and support arrangements. The result was often a complex network of technologies: fit for purpose in each individual application, but difficult to adapt, refresh, and integrate. It often required significant effort to make changes, or even to understand the implications of changes on stakeholder needs and business performance. Modern modular platforms have changed all that. Standardization of software code and integration standards have enabled systems to interact more fully without requiring bespoke designs. Tools such as application programming interfaces (APIs) allow companies to develop interoperable components that fit together in standard ways and interact seamlessly. Formerly separate systems, such as those for payments or customer relationship management (CRM), can now be linked to a single, configurable platform, with the ability to share data across the enterprise.

Design for Flexibility and Speed:
Modern organizations have a constant need to adapt within an ever-changing environment, requiring continuous innovation in products, services, and practices. Their systems must also have the flexibility to keep up. The technology systems of the past competed on functionality. They were designed to do one or two things very well, and the organization adapted to focus on those one or two activities. When the enterprise needed to change its focus, the structures and processes of the system held it back. To assess the fitness of new IT systems or upgrades, adopt a minimum viable product (MVP) approach. This approach consists of a “bare-bones” installation, covering the few features that are absolutely necessary to demonstrate the system’s value. Release an MVP to a small group of employees or customers, and ask those early adopters for responses — or better yet, observe them using the system. You will learn what features customers care about, what features they don’t, and what features are missing.

Engage with Your Workforce and Culture:
IT modernization is often seen solely as a matter of changing technology. But changes in technology sustain themselves only if people accept and embrace them. You must therefore align your new systems with the company’s culture — starting with a clear recognition of the new habits that people will need to adopt. An evolution in technology architecture may well involve a significant cultural shift, with a new structure and new competencies. Consider where the stumbling blocks may be. For example, do employees understand how to analyze the data your company collects while protecting your privacy? Do they have the operational skills to coordinate with external partners? Do they have concerns or qualms that have not been addressed? Armed with that information, your company’s leadership can determine what types of training, support, recruitment, and workforce changes are needed.

Adopt a Services Mind-Set:
The traditional approach to technology treats systems as assets that a company owns and operates. A modern approach treats technology as a set of services that a company can consume and integrate as needed, without necessarily owning the systems at all. Companies can then select and combine services from a range of best-in-class providers, within an overall framework that suits the organization’s unique needs. This approach redefines the IT function. Where once you hosted and managed systems internally, now you oversee a more open platform. Services are outsourced and dynamically managed; when a service component is not effective, you can adapt or replace it. You no longer care as much about the source of a service; you care about how well it serves your needs and creates value. You judge its financial performance in operational terms — productivity and results measured against cost — rather than by return on asset costs and the costs of maintenance.