General Manager and Editorial Director,
Techstrong Group

In theory, the simplest thing to do when driving a digital business transformation initiative would be to replace legacy systems with more modern platforms that are easier to automate. In reality, there are very few organizations that can afford to replace every IT platform they have in place. Simple economics dictate that over time new platforms and services are adopted in a way that extends the value of IT investments previously made while continuously reducing the technical debt that accrues over time.

Much of that technical debt, however, can be kept to a minimum as long as organizations remember to continuously modernize the systems they have in place versus constantly adding cloud platforms and services that, in many cases, are often redundant to the capabilities an organization already has.

Unfortunately, not nearly enough Digital CxOs have a deep appreciation for the total cost of IT. There’s a tendency to want to fund the adoption of new platforms simply because the previous generation of IT systems are cumbersome to employ. The issue that is not recognized is many of those platforms were products of a different time. Assumptions about how those platforms were to be employed were fundamentally different. That does not mean, however, those platforms can’t be modernized by adding, for example, application programming interfaces (APIs) that make it possible for developers to programmatically invoke existing functions within the context of a larger DevOps workflow.

There may come a day when an existing application or platform may be retired in favor of another application, but the rate at which that transition occurs is still measured in years. The better part of economic valor is almost always going to be to extend the life of a legacy application as much as possible to make more budget dollars available for applications and platforms that drive a truly net new capability for the business.

If, for example, an organization already has a mainframe in place running a high-performance transaction processing application, it doesn’t make much sense to invest in an alternative that runs slower on another platform when it’s less expensive to make that application more widely accessible via an API call. More often than not, it takes less time to add that API than it does to re-engineer an entire existing process. That doesn’t mean that legacy platforms are capable of supporting every new class of digital process being invented, but Digital CxOs need to carefully consider what capabilities the business needs may actually require.

The real challenge going forward is figuring out how to manage IT in a way that keeps the business moving forward without breaking the budget. Like it or not, every company is now a technology company, notes Andy Youniss, executive chairman for Rocket Software, a provider of tools for modernizing a range of legacy platforms. IT is more integrated into the business than ever. As such, tradeoffs have to be made based on returns on investment, because it’s simply not financially feasible to rip and replace every platform, says Youniss.

Digital CxOs are naturally in a hurry to make good on transformation promises that have been made. The challenge is organizations are being asked to accelerate those transformations at a time when the economic outlook remains far from certain. Organizations clearly need to place bets on which initiatives will provide the biggest return for every dollar invested. The issue Digital CxOs need to come to terms with is to what degree are those investments simply duplicating an existing capability that is not being as well utilized as it might, versus actually surfacing a capability that provides a truly differentiated value to customers the business serves. Unfortunately, in far too many instances the economic facts on the ground don’t always justify the cost of the proverbial IT castles being constructed in the cloud.