{"id":51433,"date":"2024-04-10T07:29:13","date_gmt":"2024-04-10T11:29:13","guid":{"rendered":"https:\/\/centricconsulting.com\/?p=51433"},"modified":"2024-04-10T07:34:34","modified_gmt":"2024-04-10T11:34:34","slug":"3-questions-to-guide-cost-effective-technology-modernization","status":"publish","type":"post","link":"https:\/\/centricconsulting.com\/blog\/3-questions-to-guide-cost-effective-technology-modernization\/","title":{"rendered":"3 Questions To Guide Cost-Effective Technology Modernization"},"content":{"rendered":"
New technology is debuting at breakneck speed, and many companies struggle to keep up. Especially mid-size companies, which must balance the necessity of modernization \u2014 which often comes with a hefty price tag and major organizational disruption \u2014 with constrained budgets. How can these companies modernize cost-effectively?<\/p>\n
It\u2019s a puzzle many organizations still haven\u2019t solved. According to the 2024 Gartner CIO and Technology Executive Survey<\/a>, on average, only about 40 percent of organizations\u2019 processes have been digitally optimized.\u202f<\/strong><\/p>\n Yet legacy application modernization is critical for business success in 2024 and beyond. This isn\u2019t simply about getting the latest tools and systems. Organizations that keep pace with modern technology can make more informed decisions more rapidly, offer a better customer and employee experience, and more deftly navigate the quickly changing business world. Organizations that fail to modernize their legacy systems, on the other hand, will be left behind.<\/p>\n Companies struggle with many facets of legacy modernization. For one, companies have trouble aligning on what modernization efforts to chase. When you\u2019re still operating on legacy systems but there\u2019re also AI and other emerging technologies to consider, there\u2019re too many competing opportunities.<\/p>\n Another issue is the standard way of replacing outdated technology: through costly, disruptive projects that take months to over a year to deliver any value.<\/strong> The timeline is too long, too many things change along the way, and nothing is accomplished. It\u2019s too high-risk, too-late reward.<\/p>\n Finally, many companies also approach their modernization strategy from a severely limited lens, thinking only in terms of applying the latest technology to their systems, says Faisal Hoque<\/a>, award-winning technology entrepreneur and No. 1 Wall Street Journal bestselling author of “Reinvent: Navigating Business Transformation in a Hyperdigital Era<\/a>.”<\/p>\n Hoque suggests that companies instead need to anchor all technology modernization efforts in how the technology will serve and improve the larger business strategy. He says leaders need to differentiate between modernization that keeps systems up to date and modernization that impacts the entire business model \u2014 and chase both types.<\/p>\n \u201cA lot of people look at modernization solely from the technology migration point of view,\u201d he says. \u201cI would instead look at what can you add on that will tie into and modernize your overall business strategy. How can you revamp your business model to cut costs or produce goods faster or service customers better? The successful CIOs<\/a> are very much focused on business model modernization and business model change versus technology modernization.\u201d<\/p>\n For example, when a company implements a chatbot to interact with customers, that\u2019s modernization that sustains your organization, keeping it up to date with modern business practices.<\/strong> When you take the technology one step further and use that chatbot to collect valuable customer insights, that\u2019s modernization that leads to digital transformation.<\/p>\n Mid-size companies need a phased, iterative approach to find creative ways to modernize with lower cost, lower risk, and lower organizational disruption. Use these three questions to guide the way in creating a technology modernization strategy:<\/p>\n First, analyze the values that are most important to the organization. Is it gaining efficiencies for customers? Attracting and retaining more top talent? Better insights into the customer journey? This exercise will help define the business cases around modernization, help prioritize what to tackle in what order and ensure your modernization strategy is anchored in your larger business strategy<\/a>.<\/p>\n Once you\u2019ve mapped out priorities and defined business cases, start executing on a now, next, later approach.<\/strong> Plan out 90 days at a time rather than everything at once. Be creative \u2014 what can be done in three months, and how will that advance your capabilities?<\/p>\n This approach results in a nimble plan that starts delivering value right away rather than a big, clunky initiative that\u2019s going to cost millions and take months to complete. It also gives you room to easily respond to changes in business demands and course correct along the way.<\/p>\nThe Problem With Technology Modernization Projects<\/h2>\n
A Better Technology Modernization Approach For Business<\/h2>\n
What modernization benefit is most important?<\/h3>\n
What can be done in 90 days to move the needle?<\/h3>\n
Can AI speed up the modernization process?<\/h3>\n