Pay Down Tech Debt While Investing in a Digital Future
The journey to digital transformation isn't just a technology initiative, it's about remaking the business.
If you’ve ever pondered a major remodel or a move after living in the same house for a few decades, you know the feeling of being overwhelmed. Where do you start? How long will it take? What will it look like when you’re done (will it ever be done)? Perhaps most importantly, what do I toss out immediately, what do I need to keep for the near term, and what is necessary for the day-to-day operations of the house?
These are the same feelings CIOs and CTOs face as they begin the journey of transforming their company to adopt a modern, agile digital technology strategy.
Most mature, successful organizations have experienced many technology-fueled paradigm shifts. What’s interesting about the shift we’re currently experiencing is that it is accelerating and becoming predictable. What I mean by predictable is that we are now at a point where it is clear that we are not going through a single, monolithic change, as with past waves such as client-server, web or mobile, but rather continuous waves of innovation. The implications are that CIOs and CTOs now need to design their digital transformation to re-tool their technology organization for agility and nimbleness to keep pace with the market.
A company that has been successful for decades has a legacy estate that reflects the accomplishments and scars of navigating these prior waves of change in support of the evolution of their business – new products, channels, markets, partners, M&A, etc. This footprint represents the totality of the technology decisions and debt amassed throughout their journey.
The complexity of these journeys will be far greater than those of a digital native, born in the age of digital technologies and strategies that provide competitive advantage in the market. These technologies have been well chronicled: a flexible cloud-based computing platform, agile, iterative techniques for delivering new apps and services, powered by automation, such as DevOps. These environments include integrated analytics and machine learning to leverage the treasure trove of data exhaust that digitally engaged environments create. For legacy IT, which has been focused on developing faster, more efficient systems of record, the digital future is about building more responsive and intelligent systems of engagement.
The elements of a digital strategy and infrastructure are the same regardless of the age or type of business. Where you start this journey; what you intend to achieve; and how you balance the immediate and long-range needs of your business and customers is the challenge, and one that has taught us a great deal in the process of helping hundreds of companies across many industries.
Be clear on the reason and goals for your digital transition
Whether you’re a 50- or a 10-year old company, systemic change is costly in terms of capital, productivity, talent and lost market opportunity. Executives need to strike the right balance across the immediate needs of enabling systems of engagement and modernizing systems of record.
You need to do the math and make sure your digital transformation strategy adds up. You’re undertaking a digital transformation to gain a competitive advantage but if you run out of resources midway or the process unduly hampers your company, you need to consider a more moderate path.
There are three basic reasons companies embark on this journey:
Reduce costs. Maintaining legacy technology is increasingly expensive and reduces your resources available to move to a more efficient cloud-based infrastructure with applications delivered as a service.
Improve agility. Not only is technology changing rapidly, so are businesses. Market leaders can be disrupted and made irrelevant in a few years, so it is essential to have a technology organization that is agile with the capability to respond to shifting customer and market needs.
Accelerate innovation. Most organizations do not feel that innovation is embedded in their ways of working. The ability to innovate is more important to its survival and growth than ever. With the availability of increasingly inexpensive compute, storage, connectivity and sensor technologies, giants as well as start-ups are innovating at a rate we have never before experienced. A foundational element of an organization’s innovation strategy is the ability to exploit the vast investments of their ecosystem. Efficiently experimenting creating new products and services will require leveraging these investments in concert with an organization’s own internal creativity.
Have a holistic strategy
Too often the focus is on the technology, which in our experience is not the most challenging part of this journey. Developing a holistic strategy is the first step and should cover these key elements:
Establish policy that directs future spending. To start, we deliberately direct the new on the new. Embrace a strategy of establishing cloud-based, light-weight, modular, service-based architectures for all new development. Pivot from monolithic applications and embrace service-orientated platforms in an effort to assure new systems can quickly evolve to meet future needs over time. Take full advantage of the R&D spent by technology giants who offer discrete services that can be quickly provisioned and retired. Couple these new platforms with reference architectures and policies that proactively drive the broader organization to this new strategy to avoid further accumulation of debt from past decisions.
Legacy estate modernization. Most organizations spend the clear majority of their internal technical resources on maintenance of increasingly costly legacy applications. Rationalizing these portfolios to systematically retire, freeze investment, modernize or replace these applications is critical. Abstracting large, monolithic applications with an API or microservices layer can buy time on the roadmap for replacement.
Operate at velocity. In this market where velocity and nimbleness are a priority to evolve to the latest, disruptive wave, how organizations deliver technology is as important as what they deliver. Embracing new IT delivery concepts, such as Agile, DevSecOps, automation, analytics and AI requires new methods, tools and processes. To make this type of change sustaining, operating models, retraining and culture must be foundational elements of any journey.
The advantages of modern digital infrastructures and technologies are profound. It’s a competitive imperative that companies must embrace no matter how overwhelming or painful. But it’s not simply a technology problem; it’s a journey to remake your business so it operates at an accelerated pace, with much greater market and customer insight and with the ability to respond and address these insights rapidly.
These are strategic and organizational issues that cannot be addressed by your IT department alone. They require an examination of where your business is today, what you need to keep your revenue and profits flowing, what your market will look like in three to five years, and what you need to do to stay ahead of that curve. Technology is the enabler of this change, the engine if you will, but the road map requires a deep understanding of your industry and your company and a high degree of thoughtful planning and preparation.
John Crosthwait, Accenture
John Crosthwait is Global Technology Consulting Lead for Accenture's Communications, Technology and Media Operating Group, looking after the Technology Advisory and Applications & Architecture Advisory Business Practices.
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2017 State of IT ReportIn today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.