Change is the new normal, and with a rapidly advancing digital landscape, application modernisation is a reality that we cannot escape from. Global research consultancy firm Gartner defines application modernisation as the migration of legacy IT systems to new applications or platforms, including the integration of new functionality to align more closely with business needs.
"Organisations today are looking to achieve three main goals from application modernisation: improving operation efficiency, engaging customers better and growing revenue,” said Ms Tay Siow Yen, Head of NEXT Solutions, NCS.
But application modernisation is not as simple as moving existing apps to the cloud—also known as the “lift-and-shift” approach. “The kind of assets that can be moved to the cloud will vary across organisations, depending on the nature of the business and the risk appetite of those involved,” she said.
Confidentiality, cost and competitiveness
Security is often cited as an area of concern for organisations that are contemplating cloud adoption. In the case of investment banks, for instance, on-premise servers are more suitable for storing sensitive information such as investment data, Ms Tay said. But with the current advancements in cloud technology, storing the assets in-house may not necessarily be safer than putting them on the cloud, she noted.
“Cloud vendors are prioritising security in their services, especially since it directly impacts consumer trust and brand reputation. They want to prove to companies that going cloud is actually safer than staying at home,” Ms Tay said. “Moreover, building in-house security parameters is a costly operation. Not every organisation can afford the expensive security cost or even find suitable talent to do so.”
In the past, when companies needed to create tools for their operations, they had to build their own capabilities using bespoke and purpose-built apps. But now, these capabilities are easily available as API functions or value-added services by the ecosystem of maturing cloud providers, said Ms Tay, who cited the example of a Software-as-a-Service (SaaS) with human resource (HR) functionality.
“Emerging areas of technology such as data analytics and artificial intelligence are increasingly being used in HR processes. Individual companies may not have the resources to continuously invest in these advanced HR tools and may lose out to competitors leveraging SaaS,” she pointed out.
No one-size-fits-all strategy
Before organisations embark on a cloud journey, there are difficult questions that they have to think through before they can even start defining their strategy, Ms Tay said.
First and foremost, they have to review the company’s portfolio and risk appetite to determine how aggressively the company can move to the cloud. For this reason, Ms Tay emphasised that there is no one-size-fits-all cloud strategy that can meet the needs of every company. “It really depends on the nature of the business, the critical assets of the organisation and the business strategy on the whole,” she said.
Working through the personalisation process, as difficult as it may be, is necessary because a lift-and-shift approach to cloud adoption will only deliver limited results, Ms Tay cautioned. “The optimal scenario would be for the company to leverage cloud-native capabilities for their digital transformation. Processes such as automation—using DevOps and adopting emerging tools and features—will enable them to reap the maximum benefits of cloud.”
Alongside the benefits, there are also certain drawbacks to moving to the cloud. Inevitably, moving to a cloud platform entails losing a certain degree of visibility and control. For instance, the system downtime will depend on the service provider, and there is a possibility it could occur at an inconvenient time, Ms Tay shared.
Change management is, therefore, a difficult issue to grapple with when an organisation adopts the cloud. “The technical aspect can be pretty straightforward because vendors will take care of it for you. But generally, people tend to be resistant to changes and to losing control, so this mindset is not easy to overcome,” Ms Tay said.
Management mandate and support are therefore crucial on this journey, she said, because cloud processes and changes could cut across traditional departmental borders and may even require completely different skillsets to execute.
Co-creating a digital transformation
One way to address the challenge of change management is to break down the technology adoption process into phases, Ms Tay suggested. This is as opposed to using a Big Bang approach, in which all users associated with a particular system migrate to a new one en masse at a specific point in time.
Using NCS’ CODE-X model as an example, Ms Tay described how NCS takes customers through a design thinking workshop where they co-create solutions with their customers for their problem statements and pain points. The ideas are then put to test using proof of concepts (POCs), where test runs of the applications are carried out on CODE-X, a safe environment with various toolsets made available. Only when the POCs are successful are the apps rolled out into production.
Highlighting the advantages of co-development, Ms Tay explained that breaking down adoption processes into POCs allows customers to experience how things work in bite-sized pieces. Customers also come to understand how the new tools can enhance their workflow, and learn how to identify and address challenges at an earlier stage.
“We like to encourage co-creation with our customers because we understand that many of them want to take the opportunity to transform themselves and we are happy to provide the expertise. The whole intent of setting up CODE-X is to support their digital transformation plans by offering the domain knowledge we have, and to embrace this journey together with them,” Ms Tay said.