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Modernising legacy systems can cut operating costs by up to 80%. Here’s how you can achieve it.

It can be a daunting task to modernise legacy systems for offices still using legacy systems. This roadmap offers concrete steps to ease the transition to digital

02 December 2021

Modernising legacy systems can be a daunting task for offices using legacy systems. This roadmap offers concrete steps to ease the transition to digital

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Digital technologies were essential in helping entire industries weather the past two years’ upheavals. Today, digital transformation is more than just about cost-cutting; it helps drive significant business value. 

Organisations that are going digital by modernising legacy systems or moving to the cloud are already seeing results. For instance, a Deloitte survey found that the cloud helped 80% of respondents better prepare for future challenges and innovate faster, and allowed 70% of organisations to rapidly scale up or down.

But digitalisation can be a daunting task. IT leaders who responded to a 2021 survey said they faced the following challenges when they moved their legacy systems onto a cloud-based infrastructure:

  • Security and compliance issues
  • Migrations take too long
  • Migrations can be expensive—ranging from USD100,000 to USD250,000
  • They lack in-house skills—specifically, database integration experience, experience with their chosen cloud platform, previous experience with migration, and testing and validation

A Q4 2020 survey by Statista echoes these findings, with 81% of respondents saying security concerns were the most significant barrier to cloud adoption, followed by managing cloud spend, a lack of expertise and resources, and governance issues.

Adding complexity to modernisation is the fact that it doesn’t always mean abandoning legacy systems. Enterprises can still derive value from older databases, for instance; these just need to be brought up to date.

The good news is, there are systematic ways to make IT modernisation manageable. 

But first things first: why must businesses modernise legacy systems in the first place, and how can they plan for it?

Why you need to modernise your IT infrastructure today

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The quick answer: organisations must be able to keep pace with today’s rapidly changing business environment, and harness growth opportunities in the post-pandemic world.

Modernising IT infrastructure will not only help your organisation face upcoming challenges; it could also address some common IT pain points that many have just learned to accept, including:

  • Having business intelligence locked in data silos
  • Ageing IT systems that serve critical functions reaching the end of their service life
  • Working with infrastructure that isn’t agile enough to allow the business to adapt to fast-changing markets
  • The need to reduce operating costs

In Asia-Pacific, the cloud is emerging as a key ingredient in most enterprises’ modernisation roadmaps. Spending on IT for both cloud-based and traditional managed services reached record highs in the second quarter of 2021, surpassing USD 3 billion, according to the Asia-Pacific ISG Index. Worldwide, 74% of IT decision-makers believe that 95% of all workloads will run in the cloud by 2025.

Research by Deloitte highlights how the cloud can help organisations in Asia-Pacific unlock massive opportunities and address operational challenges. In our own experience with data historisation, we also learned that storing legacy data and records in the cloud could cut organisations’ operating costs by 80%.

But, as mentioned, modernisation approaches can incorporate a mix of legacy and newer technology. The key to keeping things running smoothly is a good technical change management strategy.

Planning your digital transformation: a step-by-step

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Before embarking on a digital transformation journey, it’s important to have a strategy with a clear view of the risks and the rewards. 

Gartner recommends a three-step evaluation process:

Step 1: Evaluate your legacy systems from both a business perspective and an IT perspective

To see if the way your legacy systems are set up still makes business sense, ask yourself the following questions:

  • Does it meet the new requirements that a digital business demands?
  • Is it agile enough to accommodate emerging challenges from increasingly digital operations?

If you answered no to these questions, it may be time to modernise your IT systems or face increased costs and risk vulnerability.

To evaluate the system from an IT perspective, ask these questions:

  • Is the cost of ownership too high?
  • Is the technology too complex?
  • Is it compromising security, compliance, support, and scalability?

If you answered yes to these, your system needs an upgrade.

The best modernisation approaches are those with multiple drivers from both business and IT perspectives. 

Step 2: Evaluate available modernisation approaches

There are seven common approaches, ranked by ease of implementation:

  • Encapsulate — encapsulate application data and functions to extend their features and make them available via an API
  • Rehost — keep an application as-is but redeploy it to be hosted on another physical, cloud, or virtual infrastructure
  • Replatform — make minimal changes to an application’s code (but not its structure, functions, or features) and migrate it to a new runtime platform
  • Refactor — improve non-functional attributes by restructuring and optimising an application’s existing code (but not its external behaviour)
  • Rearchitect — optimise an application by altering its code and shifting it to a new architecture
  • Rebuild — keep an application’s scope and specifications but rewrite it from scratch
  • Replace — abandon the old application, look at your new requirements, and build a new application altogether

Step 3: Choose the approach that will deliver the most value and impact 

Look at each option in terms of how it will affect your technology, functionality, architecture, risk, and costs. Which option will best help you reach the objectives behind your modernisation initiative? Aim for an approach that can drive maximum impact with minimum effort.

Case study: Mitra Keluarga

Indonesian private hospital operator Mitra Keluarga (MIKA) had an on-premise data centre that suffered frequent downtimes. The infrastructure could not scale well, and despite acknowledging that there was a need to modernise it, the organisation lacked the necessary in-house IT skills to undertake the digital transformation.

MIKA turned to T-Systems, which proposed a “lift & shift” approach, migrating business-critical applications to the AWS Cloud. T-Systems developed the blueprint and migrated SAP and non-SAP systems to AWS. The solution included a network set-up, a secure access concept using multi-factor authentication, password policies, and centralised identity and access management. The migration was done in just three months and without any disruptions to MIKA’s operations.

Through this modernisation effort, MIKA now has a more reliable, stable, scalable, and always-available infrastructure. It also no longer needs to maintain in-house infrastructure.

A segmented, secure, and comprehensive approach to modernisation

Modernising legacy systems is a major undertaking but is a must in today’s volatile business environment. There are a number of different approaches, so careful evaluation and planning is crucial.

If you think it’s time for an update, give your legacy infrastructure an honest look and don’t let them hold you back. But if some components still bring value to the business, consider keeping them around and exploring how best to integrate them with digital technologies.

For organisations looking to modernise their legacy infrastructure through a segmented, secure, and comprehensive approach, there’s T-System’s Future IT Transformation (FITT) Suite

FIIT is designed to help enterprises digitally transform with minimal risks and zero disruptions to critical business applications. It addresses all architecture layers, enables monolith to microservice transformation through a segmented transition, allows for mainframe migration to the cloud, and uncovers opportunities for “quick wins” for a faster return on investment. Our segmented approach also mitigates risk and minimises outages.

Reach out to us for more information.

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