Companies are barely scratching the surface of their digital potential. A study by IDC revealed that by the time 2017 comes to a close, two-thirds of CEOs will have digital transformation at the core of their strategy.
Yet, another study from the same analyst firm shows that 70% of C-level and IT executives believe that implementing digital transformation will not be at a satisfactory pace.
The majority of CIO’s believe that to embark on digital transformation the entire IT system needs to be ripped and replaced. This process of legacy modernisation is a lengthy and expensive exercise.
It isn’t just the cost that is preventing digital transformation. Many organisations are plagued by legacy inertia and in essence are often being held hostage, not just by ageing systems, but also by the CIO’s investment in specific technology which has created the legacy..
The system, usually from the ground up or customised in-house over a long period of time has exceeded the typical lifecycle of an application, which is between five and ten years. In South Africa, approximately 70% of financial services institutions are running on systems that are as much as 20 years old.
Reliance on these legacy systems inhibits adaptation to more flexible governance and compliance to new regulations. Coupled with the perceived high risk and cost, most businesses are behind the curve.
There is a better way of doing it
The option that many decision makers don’t know they have, is the possibility to ringfence their core or legacy applications, stabilise them and then extend their capabilities using a digital platform.
By containing old systems and adding a digital platform on top to expose micro-services, a business is able to unlock the existing value of their legacy process and data, leverage existing skills within an organisation and enhance compliance and governance.
This gives business the opportunity to leverage what works and change what doesn’t.
True bimodal IT is not just about the ability to create new applications, but to interact with existing data logic, processes and change them where necessary. Core systems hold valuable business information and digital transformation can expose customers to new activities, processes, business models and better service at more convenient times.
The current thinking, that an application is digital transformation is a misnomer, it’s about taking advantage of the opportunity to be in the customer’s pocket and using that opportunity to increase share of wallet and to improve the customer’s experience.
By layering a digital platform on top of the existing system, businesses can now start implementing a holistic digital transformation strategy, and the advancements in technology make this a cost effective and speedy process. By doing this a customer is able to engage in a way which they would like, be it an app, web experience or any other medium or channel of convenience that true digital transformation can offer.
Digital transformation is the accelerating transformation of business activities; processes; competencies and models to fully leverage digital modernisation and impact across customers strategically. This enables innovation.
Craig Terblanche, Regional Director, OutSystems