Revolutionizing Enterprise App Landscapes: Pioneering an industry-centric modernization approach
By Anand Iyer
As enterprises evolve in the digital age, application modernization long viewed as the process of updating legacy systems to meet technological requirements has transformed into a strategic catalyst for business success. Today, it is reshaping the way enterprises operate and deliver value with a focus on elevating not only Customer Experience (CX), but also Employee Experience (EX) and Operational Experience (OX). Summarizing this trend, McKinsey says, `IT is poised to play a new, more strategic role in companies, one that moves beyond support to create business value through technology-based business innovation and digital initiatives’.
There are several reasons for this shift:
Evolving Competition: The landscape has transformed from sector-focused rivalry to competition emerging from digital players. In sectors like banking, dominance is no longer solely about major players but involves smaller digital banks and retailers entering the field. McKinsey says that digitally native brands (DNBs) are growing, on average, at triple the rate of overall e-commerce, while the fastest growing among them have scaled from $50 million in revenues to $1 billion in four to eight years. Established businesses are now emphasizing business differentiation to maintain dominance, focusing on customer experience beyond technical shifts.
Tech Stack Integration: With the advent of the cloud and widespread interoperability, the initial decision is no longer about a specific technology stack. Modern businesses prioritize defining their objectives first and then selecting products across the entire lifecycle that best align with their outcomes. This results in a mixed stack tailored to meet their business needs and budget, such as integrating SAP, D365, and Power Platforms strategically. Forrester say that the tech stack is a corporate asset that requires governance and refinement. It further states that throughout the leadership journey, retention, re-platforming, and reimagining decisions will be a business priority.
Cost Consideration: In today’s resource-constrained environment, business decisions on investments are more prevalent than ever. Determining where to allocate resources for the highest returns is now a business-driven choice, diverging from solely technology-driven decisions. For today’s CIO, the focus is on building a strong business case that justifies the benefits from technology transformations that can be used as a competitive advantage.
Persona-Based Approach: The one-size-fits-all model is outdated. For instance, front-line workers have specific demands, requiring solutions that align with industry-specific business needs. Industries heavily reliant on front-line work prioritize solutions that address the unique demands of their workforce. By tailoring solutions to their specific needs, such as real-time data access, mobility, and task-specific functionalities, businesses can significantly enhance the efficiency and effectiveness of their front-line workforce.
Industry-First Modernization – The Way Forward for Business Success
Industry-first modernization offers the leverage that businesses require, tailoring efforts to align with specific needs, regulations, and trends. For example, in healthcare, the focus is on transforming Electronic Health Records (EHR) to be patient centric. This initiative involves redesigning interfaces for enhanced patient engagement, prioritizing interoperability for seamless collaboration, integrating telehealth capabilities, utilizing advanced data analytics for predictive healthcare insights, and ensuring healthcare compliance.
Secondly, industry-specific modernization not only caters to immediate needs but also focuses on long-term operational resilience. By addressing specific pain points and challenges, these tailored solutions contribute to the overall continuity of operations, minimizing disruptions and bolstering the organization’s ability to adapt to unforeseen challenges. Industry specific modernization for the banking sector would entail addressing specific challenges such as transaction speed, digital integration, cybersecurity, scalability, and compliance, to ensure long term operational resilience.
Industry-specific application modernization places a strong emphasis on improving user experiences. By understanding the specific needs and workflows of users within that domain, the modernization process can incorporate intuitive interfaces, streamlined workflows, and user-centric features. In the retail sector, domain-centric application modernization is exemplified through the transformation of customer engagement platforms introducing personalized features, seamlessly integrating omnichannel experiences, optimizing inventory management, ensuring mobile-friendly interfaces, and leveraging data analytics to provide valuable insights for informed merchandising decisions.
The Dual Embrace of Domain Expertise and Technical Proficiency in Application Modernization
The paradigm shift towards industry-specific application modernization necessitates a fundamental restructuring of project models and a recalibration of service providers and teams. Top-tier service providers are undergoing a strategic evolution in their staffing models, moving beyond a singular focus on technical skills. These providers have established specialized streams dedicated to consulting and domain experts. This proactive adjustment enables them to lead in defining project requirements and actively engage in client discussions, with a sharp focus on domain-centric modernization.
Concurrently, there’s a notable push for individuals to evolve into techno-functional experts, emphasizing the importance of being adept not only in technical aspects but also in understanding the functional nuances of specific industries. This shift is crucial for effective customer interactions.
To summarize, for businesses today, any strategy for modernization should harmonize profound vertical expertise with a solution-oriented methodology tailored to address distinct business requirements.
(The author is Anand Iyer, Assistant Vice President & Global Delivery Head – Microsoft Business Applications & Modern Workplace, and the views expressed in this article are his own)
