I've had a lot of conversations with CIOs over the years about modernization. What's been clear throughout is modernization cannot be the end goal for a project or initiative. Instead, anything IT does always needs a business outcome attached. But what happens when an organization lacks the process and technological maturity and needs to modernize to innovate? This was the question I posed recently to CIOs.

Do Organizations Need to Modernize Before Innovating?

The consensus was it's common to need to modernize before innovating. "I have yet to see a place where modernizing isn't needed. You need the tools and the culture to drive innovation. But to be clear, modernization is a journey, not a destination,” said CIO Deb Gildersleeve. CIO Martin Davis agreed, saying “it is fairly common, outdated apps, lots of tech debt, modernizing can provide increased efficiency, and this can then lead to innovation opportunities.”

For CIOs Carrie Shumaker and David Seidl, however, both often have to happen concurrently. According to Shumaker, “You can’t do everything, but you need to get to innovation. For this reason, it helps to pick one main area of focus to modernize and innovate.” Seidl agreed: “You often have to do both at once and they're very hard to separate. Modernization can also look like innovation in many contexts.”

Modernization and innovation go hand in hand — a point that at times gets lost in strategic planning. "I think too many CIOs get caught up with just catching up and haven't gone through the strategy of modernizing. For this reason, innovation gets slowed down because of the need to modernize networks, platforms, architectures, staffing, and sourcing," said former CIO Tim McBreen. Taking it a step further, Hurwitz & Associates analyst Dan Kirsch said, "The goal isn't to modernize, go to the cloud or move to microservices. Those are just ways to support innovation. Continuous delivery and the release of new features is what will make customers happy."

Related Article: How CIOs Can Create the Engagement Innovation Demands

Typical Issues Organizations Face When Modernizing to Innovate

Organizations face common issues when faced with the need to modernize to innovate, including:

  • Technical debt.
  • Outdated systems and applications.
  • Organizational inertia.
  • Resource contention.
  • Lack of sponsorship and support.
  • Point solutions versus re-usability and agility.
  • No coherent sourcing strategy.
  • Inefficient processes and manual workarounds.
  • Lack of automated or repeatable processes.
  • Lack of technology investment.
  • Weak controls and processes.

Gildersleeve shared her take on the main culprit: “Outdated systems, used inconsistently and sporadically throughout the organization, and overall, not enough staff and a lack of rigor on projects taken on by IT. There’s a reason why there’s an IT backlog across industries.” Without question, people and processes are always more difficult than the technology itself. For this reason, Kirsch suggested “skills, culture, and processes are difficult to overcome when you look to modernize or innovate. Technology and tools that can enhance what teams are doing versus change everything are important. And, I'm sure those outdated systems and apps are well documented and well understood .... All of the dependencies are perfectly mapped out! Especially because you cannot replace everyone, nor should you. There is a reason poor processes are in place and employees that understand the business are important."

Modernization cannot be a one and done effort. As Shumaker put it: "modernization is a cycle that never ends." CIO Melissa Woo added, "sadly, yes modernization does happen. It's much more interesting, however, to fund something new and exciting than fund the continuing operations of what was once new and exciting."

Related Article: Modernizing Legacy Tech: Big Bang or Piecemeal?

Biggest Remaining Modernization Challenges for Mature Organizations

Mature organizations face their own, unique challenges in the quest for modernization. Seidl said, “the mature often tend towards stolid and less capable of change over time. We build processes and eventually must blow them up. So, a key challenge is realizing that you modernized and need to do it again.” Gildersleeve noted, “Even with mature IT organizations, there is always at least one big system that has always been there that nobody has made the case to upgrade or retire. Generally, this system takes resources in small blocks that is a distraction."

For this reason, Kirsch said “Mature IT organizations need to reward those who take risks. The path for creating an agile organization that supports DevOps and continuous delivery doesn't have a you've arrived sign at the end.” In terms of what needs to be consider for change, Davis said, “it’s probably the normal suspects, cloud, DevOps, agile, digital transformation, but to be a little contrary I would throw in, properly supporting the business and being nimble.”

Learning Opportunities

Related Article: The Elephant in the Digital Transformation Room: The Long Tail of Legacy Tech

What Role Can Cloud Play in Modernization and Innovating?

A move to the cloud is at times billed as a sure-fire step on the road to modernization. But it isn't as simple as that, as the CIOs agreed. As Gildersleeve said, "It depends. If you are just taking existing systems and moving them to the cloud that is not really an accelerant. If you are re-architecting systems for the cloud to be able to take advantage of all the technology available, then yes." Davis agreed, suggesting an alternative approach: "I wouldn’t advocate for a lift and shift approach. It is far better to replace with a SaaS type solution running that latest version and avoid future tech debt opportunities. You should use cloud as an opportunity break the cycle of tech debt which can be a great accelerator for the future.”

"Cloud and other service/infrastructure providers are an opportunity to stay as current as possible. They allow you quickly jump start moving to new world versus having to do it yourself. Basically, you get a new world in a box almost immediately,” said McBreen. With this Seidl said, “cloud can, but it shouldn't be the driver. It can allow you to adopt tools and services more easily, but your organization still must do the modernization work and people change management to get there."

The final word came from Kirsch, who stressed, "It's important for leadership to understand that the cloud isn't a panacea. There just is not a business case to move all workloads and data to the cloud. The cloud should not be feared or thought of as competition for a smart CIO and seasoned IT organization. Biggest challenges when thinking about cloud migration are:

  • Cloud security and compliance.
  • Understanding cloud costs.
  • Deciding on a plan (modernize and then move, or move and modernize later).
  • Determining what apps and data make business and technology sense in the cloud.

With this said, "automation is a huge part of enabling modernization to support innovation. Automate the boring so that your team can focus on creativity and challenging problems."

Where Has Work From Home Exposed Modernization Challenges?

The work from home movement of the last 15 months brought to light areas for improvement throughout organizations. Seidl said he “keeps seeing processes that are predicated upon a physical location. Human resources forms and processes, onboarding procedures, and a host of other things. There are many other areas, but processes are a big thing.” Davis agreed, stating it includes “outdated security models, inability to access key apps or data remotely, problems connecting, and the list goes on.”

For McBreen, this is “pretty much everywhere for most companies. Ranging from processes to toolkits to networks to infrastructure and all supporting processes, security, etc. that apply. Even people themselves.” Gildersleeve added, “it is becoming clear very quick where there are challenges. Across the board there were some issues with accessing the VPN remotely when they had not before, accessing files, etc." Kirsch stressed the part strong leaders play in this area: “WFH has changed modernization, but shown that well-led teams can adapt.”

Are CIOs Up for the Challenge?

While many organizations need to modernize to innovate, smart CIOs look for the opportunity to include innovation in their modernization efforts. Yet many things still hold organizations back. Opportunities can be found in these challenges, if CIOs take the time to fix and innovate in areas like the cloud and working from home. The question is how many CIOs are ready for this challenge?

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