Many companies are pursuing digital transformation, but there is not always consensus on the real meaning, and most confuse it with IT modernization. So, how can you tell the difference between digital transformation and IT modernization? Digital transformation is integrating fundamental digital technology into all business areas.
On the other hand, IT modernization refers to managing or moving away from legacy and old solutions. It’s more about consolidating workflows and systems in favor of innovative and automated solutions.
IT modernization
IT modernization is highly preferred in a business over digital transformation. In this case, you are replacing the old solutions with new and great IT solutions latest in the market. Some situations force a company to forego IT modernization, especially when there are higher chances of cyber attacks. Remote working is one of the factors that led to mainframe modernization in most businesses across the world.
IT modernization efforts are critical to enabling cloud adoption, artificial intelligence, improving connectivity, and driving great changes in business management.
There are several types of IT modernization, and they include hybrid cloud, multi-cloud, and cloud migration. The kind of modernization adopted by a business should be in line with the current demands of the business. For most businesses, IT modernization is a journey that must be taken seriously. Below are the successful steps to IT modernization and their benefits.
Align IT and business initiatives
Whenever there is a new startup launch, it’s expected that the owners will align the IT and business initiatives together to create effective business strategies. You have to determine the right initiatives that fit into your overall business strategy.
In this case, there should be an effective collaboration with the CIO, IT leaders, and other senior management. Constant feedback and business metrics should be used to reshape the IT modernization activities.
Simplification of IT process
In every business, there are overly complex systems, which tend to prevent the business from focusing on the overall modernization efforts. In most cases, the aging legacy systems are often costly and detrimental to the quality of the processes carried out in the organization.
As a result, there is a slow pace of change. To optimize the overall costs, the business should implement a technology refresh that will include automation and lean processes. The unused or underused systems should be eliminated, and the business should improve the workload placement.
Modernization applications
Every organization that uses traditional technologies struggles to identify and implement workload placement strategies for the cloud environment. These barriers can either be financial or technical and can be overcome by proving the business use case for all applications.
The application rationalization process helps a lot in deciding where specific applications and data should be stored and how it will best serve the members of the business who use it. To rationalize the application, you need to establish business priorities. As a result, you can modernize the application to increase the speed and agility of the whole system.
Operate hybrid at a scale
If you are dealing with complex processes, you need an operating model to ensure the business responds to market changes. The operating model should also secure a broader ecosystem respective to the growth of cloud resources.
Managing a hybrid architecture can be challenging as you need to scale and integrate different cloud systems with the current business IT environment. Thus, you will have to develop new strategies that will help the business members work in harmony with resources in the data centers, cloud, and on-premises.
Digital transformation
Unlike IT modernization, digital transformation fundamentally changes how a business operates. It involves using digital technologies to modify an existing or create new business culture, processes, and customer experiences that will help meet the changing business and market demands.
Digital transformation transcends traditional roles like marketing, sales, and customer service. If you are starting a small business, there is no need to set up your processes and then transform them later. It’s advisable to future-proof your business from the start. There are several benefits of digital transformation, and they include.
Stronger resource management
With digital transformation, you can consolidate information and resources rather than having dispersed software and databases. This reduces vendor overlap as you can integrate applications, software, and databases into a central repository for business intelligence.
You need to understand that digital transformation is not functional or departmental as it encompasses every area of the business. Stronger resource management leads to process innovation and great efficiency across all units.
Enhanced data collection
Even if your business is collecting large volumes of customer data, the real advantages lie in the optimization of the data for the overall analysis to drive the business forward. Digital transformation helps create a system for gathering the correct data and incorporating the detailed data fully for business intelligence. This creates a new way for disparate functional units to translate raw data into great insights across other processes within the business.
Better customer experience
Digital transformation unlocks various inefficiencies for all members of the organization and delivers more intuitive and seamless experiences for the customers. This ranges from email communications to digital products, user portals, and the cadence through which you reach out to new prospects.
Customers usually expect digital experiences as they are used to endless choices, fast delivery, and low prices. Customer experience is one of the great battlegrounds for different brands.
Increased profits and agility
Like IT modernization, digital modernization leads to increased profits due to efficiency and profitability. Your business will also increase its market share, automatically translating to higher revenue than the respective competitors.
The greater the digital transformation, the more agile the organization becomes. And this will lead to great speed-to-market and easy adoption of Continuous Improvement strategies. As a result, the business will experience faster innovation and adoption and a great improvement pathway.
Conclusion
Are all your digital initiatives for the business just an upgrade or truly transformative? Depending on the business requirements, you can adopt digital transformation or IT modernization. Of the two, IT modernization can play a huge role in increasing the revenue of your business.
