Digitalization is in full effect across every sector, and for compelling reasons - it is enabling businesses to create new sources of revenue, transform their business models, and move faster.
But while no one can argue with the need for digitalization, many CIOs looking to modernize their systems and processes are encountering a fundamental challenge: Their legacy systems contain too much useful business logic to simply be thrown away!
I recently spoke with a customer who told me that throwing away existing systems to innovate isn’t the vanguard of digitalization—it’s actually old thinking. Instead, leveraging the valuable systems already in place is the fastest and most cost-effective path to digitalization.
Based on our experience with many companies trying to upgrade their legacy systems, this is spot-on. That’s why leading businesses with a history of success are not taking a rip-and-replace approach, but instead find ways to bring their legacy systems into the digital age.
Indeed, to embrace digitalization by throwing out systems that have been built with decades of institutional knowledge presents two big problems: First, it costs far too much. Throwing enormous amounts of money and resources at efforts to replace existing systems diverts attention and resources from a focus on business innovation. Second, replacing legacy systems and all the business logic they contain takes far too long, leading to capability gaps in IT that affect the business. Throwing away functional legacy systems can actually undercut innovation just when it is needed most, and hold a company back while its competitors are running ahead. As an example, please watch the video about successful IT transformation at AAFMAA.
Why not build on what’s working, and breathe new life into decades-old applications?
If there’s one feature that characterizes digitalization, it is the flexibility and speed that modular components offer. Microservices, created and maintained independently, and exposed through APIs, enable more adaptable, dynamic business capabilities. The challenge—and opportunity—is to bring these capabilities to decades-old legacy applications by combining the strengths of existing, proven systems with the speed and responsiveness of digitalization. Done right, it can deliver the best of both worlds: the core business logic continues to serve the business, while it’s leveraged for business innovation.
Leveraging your existing systems is the fastest, cheapest, and most effective path to digitalization. In my next post, I’ll take a deeper dive into the process of how a business can build on its legacy systems to chart a smart path to digitalization and all the benefits it brings.
We are pleased to offer you complimentary research from Gartner, Use Continuous Modernization to Build Digital Platforms from Legacy Applications, to help you with your journey to digital business transformation.