IT modernization: as exciting as artificial intelligence?

  • Posted on April 5, 2017

In a world of IT where phrases like “artificial intelligence”, “IOT” and “wearables” seem to be prerequisites to any conversation related to “the next big thing IT needs to think about”, you wouldn’t expect “IT modernization” to rate that highly  [CLICK TO TWEET].

But at the risk of oversimplifying, or perhaps under dramatizing, IT modernization is very much the next big thing IT leaders need to think about. The reason? Well, if your business does want to do more with “artificial intelligence”, “IOT” and “wearables” other than just include them in a sentence, you will need modernized IT to use them. Not just the technologies, but also the approaches.

Today’s conventional systems and approaches are not fit for purpose

That’s the view of 800 senior IT decision makers from around the world, according to research Avanade recently sponsored. In fact, nearly two thirds of them (65%) believe that the conventional systems and approaches typically in use today are not fit for purpose for solving the emerging requirements of the digital business.

That’s a pretty telling statement, but of course, it makes sense if you think about it. When we talk about an application being multi-channel, we no longer just mean can you access it on a tablet, mobile and traditional web browser. The new digital channels are wearables, IOT and AI (think Microsoft’s Cortana or Amazon’s Alexa).

To meet digital business needs, the majority (93%) agree that both a predictable approach (to optimize core systems) and an exploratory approach (to innovate the business) are needed. They also believe that modern software engineering approaches (89%) and process automation technologies (92%) are key to addressing emerging digital business requirements.

The benefits are huge. So why isn’t everyone doing it?

Given that on average, senior IT decision makers believe IT modernization has the potential to boost annual revenue by over 14% – an increase of more than $1 billion a year plus reduce business operating costs by over 13% a year, it’s clear there are huge benefits to be had. So why isn’t everyone doing it?

  • The business case disconnect – there’s nothing new about needing to make a clear business case for an IT project. There’s also nothing new in business execs not always fully appreciating the business impact of IT projects. But what is new is the increasing IT budget that business execs hold, which CIO’s need to pay for big IT modernization projects. The research throws some light on this disconnect.
  • A cloud-first approach is necessary for a hybrid world – The research shows that whilst more business application are moving to PaaS, which is where the business value of cloud starts to kick in, the wholesale move to public cloud isn’t happening anytime soon. So in this hybrid world you can see, as the research shows, why implementing vendor-provided cloud stacks (such as Microsoft Azure Stack) are in the future plans of so many respondents.
  • You don’t have the time to do it all in-house – whilst it’s clear there is a need to invest in people and systems, it doesn’t make sense to do it all in-house; there’s just too much to be done and time isn’t on your side. The research identifies the key areas senior IT leaders think they need help with.

So whilst IT modernization clearly isn’t a business goal in itself and may (or may not) be as exciting as artificial intelligence, this research makes it pretty clear that if you don’t modernize your IT systems and approaches, you will not be able to address the emerging needs of the digital business i.e. your business won’t be able to use all the ‘new digital stuff’. That’s fine, until your competition do…

Take a look at the research report if you want to know more.

Vimlesh Rai

Artificial intelligence is really a game change in IT industry. And research shared by you is really great.

June 18, 2017

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