Tuesday, October 13, 2015

Two ways to modernize IT systems for the digital era by McKinsey

This is a very well structured article from McKinsey that outlines how to deliver agile customer facing solutions while maintaining the robust services needed from your back end systems to provide the underlying data and process reliability that is expected of all on-line businesses today.  The outlined approach requires the business to separate the back-end application development cycle to make sure they are being maintained for internal processing, while at the same time allowing more rapid release cycles and experimentation with the front-end applications-- where there is so much dynamic demand for modifying applications to satisfy the new digital customer.

If you are in an on-line business, this is a good example of differentiating applications by their impact to your business so you can focus the right amount of resources on those business functions that are strategic imperatives based on a new competitive environment.  Furthermore, it would be very beneficial to make sure that your on-line application is a platform that enables you to manage a rapidly change via configuration and integration rather than a lot of coding changes.


Two ways to modernize IT systems for the digital era

Originally posted by Juan Garcia Avedillo, Duarte Begonha, and Andrea Peyracchia of Mckinsey

Outdated IT systems are often the biggest Achilles' heel for established companies seeking to compete successfully against upstarts. Every executive knows the problem. Established companies try to get as much as they can from their investments in legacy systems. When they come up against the systems' limitations, they devise patches or work-arounds. While useful in the short term, over time these remedies can create incompatibilities among discrete layers of the technology stack and among applications within a layer. Companies may find that they are actually increasing their operating costs in the long run and missing opportunities to embrace more efficient and more innovative ways of working through digitization.

By contrast, newer online competitors - unburdened by legacy IT systems - benefit from agile product-development cycles and delivery systems, digital operating models, and lower operating costs. They can experiment and test software releases frequently with users to respond quickly to market shifts. They can pursue hypertargeted marketing strategies, learning as they go from the consumer data they collect. Such companies have been able to accelerate their time to market with new products and improve customers' experiences.

To realize similar advantages, established companies will need to simplify their core IT systems while still keeping the lights on. That’s what one European utility did: by eliminating the operational drag from its legacy IT system, it was able to shave its costs of providing customer service by 15 percent... Continue Reading

About the Author
Nathan Claridy is an executive consultant to companies with broad IT challenges in enterprise architecture, system simplification, mergers / acquisitions / divestitures, cost transformation, and cloud adoption. He has been working as an Enterprise Architecture consultant with Griffin Solutions Group for two years; prior to that, he was the Enterprise Architect for Motorola Mobility for almost 4 years. Nathan has over 20 years of experience in Supply Chain Operations and Information Technology at Motorola and Harris corporations...

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