Notwithstanding the march of digitization, and the opportunities offered by emerging technologies, the pragmatic reality for all but a few organizations is that innovation must be balanced by continuing to modernize and extract value from existing IT investments. To some extent this is the continuation of a well-trodden path, but the closer integration of IT and operational technology (OT), coupled with growth in Internet of Things (IoT)-based solutions, is opening up new approaches to making the business case for modernization initiatives, and changing both the business and technology aspects of this agenda.
ICT capabilities are as likely to be found today embedded in a business asset or as part of a business process, as they are to be sitting in a data center, so the ICT modernization story is often an integral part of a broader business modernization strategy. Typical scenarios include sensors and management capabilities built into high-value assets; geolocation technologies enabling the real-time tracking of physical goods and human participants within a business process; and the sophisticated compute capabilities that are now in the hands of employees, customers, and citizens.
IT functions often find it challenging to justify and communicate the value of modernization, infrastructure refresh, and application maintenance, so there are benefits in viewing these projects as part of broader business renewal and transformation programs. Industry examples of this process include the migration to on-demand operations in the broadcast sector, the renewal of core banking platforms in financial services, and the deployment of smart grids and smart metering in energy and utilities. It is also vital to incorporate these technology components into the business case for new projects – taking a whole lifecycle view of the costs involved, rather than simply the short-term cost of development and delivery.
This integrated approach to modernization will be an important part of the CIO remit over the next few years, as organizations seek to employ technology-enabled platforms for increased automation across major areas of the business. Rather than perceiving legacy systems simply as millstones to be endured, there is value in identifying broader business modernization initiatives, communicating the role that ICT can play in these, and building a unified business case.
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