A Strategic Guide to Modernization and Cost Savings

Setting the Stage

As technological advances are being embraced by an increasing number of organizations, the need to adopt innovative solutions is essential for businesses to maintain an edge in any industry. In an ultra-competitive landscape where businesses operations are realizing the value of adopting modern technology to support and improve their core functions, industry leaders are finding success in changing the way they think, with IT-led modernization priorities aimed at improving workforce productivity and collaboration.

While the urgency to modernize legacy workloads and infrastructure, reduce costs, and exceed customer expectations continues, success hinges on properly adopting the right technology with an experienced modernization partner. This strategy ensures businesses stay relevant and harness a culture of agility and innovation. One that breaks down barriers between traditionally siloed teams and workflows to enhance the digital ecosystem as a whole. Not only does this lead to increased productivity levels, but in a time of evolving consumer preferences, a tightly integrated team with the ability to adjust, communicate, and transfer knowledge on the fly leads to faster and more efficient processes supported by cloud-based solutions.

From inception to implementation, working with a collaborative and experienced modernization partner can help mitigate risk, navigate challenges, and increase productivity to accelerate positive business outcomes. A partner with the agility and innovative mindset to move beyond the hasty IT transformations and bolt-on solutions of the past – transitioning from misaligned priorities, overburdened staff, and poor results to a new world of improved operational efficiency, optimization, and cost savings. In this spirit, successful modernization aims to exceed customer expectations, outperform the competition, and help your business prepare for future disruption.

Driving Forces Behind Modernization and Digital Transformation

Beyond the need to fundamentally evolve workforce productivity to save costs, there are an increasing number of compelling forces fueling modernization. Market leaders, or those defined by their keen ability to predict and adapt to the changing landscape, consider modernizing legacy applications and proactively mitigating risk as their top priorities.

With several areas primed for optimization, market leaders continue to benefit from the increased cost governance features of long-term solutions aligned to business challenges and high-priority outcomes. Solutions with the proper controls to monitor, report, and alert on performance utilization and spend help agile organizations predict, adapt, and respond to unforeseen market challenges, resolve inefficiencies, and act on improvement opportunities, all while creating new revenue streams.

53% of organizations report they feel untested in the wake of digital challenges, making their digital transformation readiness uncertain.

Gartner’s IT Roadmap for Digital Business Transformation

Inversely, market laggers and organizations delaying their modernization and digital transformation projects are suffering. For the late majority, “the transformation journey is taking at least twice as long and costing twice as much as they originally anticipated.” (Gartner’s IT Roadmap for Digital Business Transformation). Organizations that modernize sooner rather than later save time and money while making strides to surpass the competition and prepare for future disruption.

Dangerously, in an age of rapid innovation — 53% of organizations report they feel untested in the wake of digital challenges, making their digital transformation readiness uncertain (Gartner’s IT Roadmap for Digital Business Transformation). With untested assumptions leading to lingering uncertainty, now is the time to increase visibility and harness the forces of modernization. Unfortunately, history has an awful pattern of repeating itself for those who delay the inevitable.

Embracing Inevitable Change: Lessons in Time

Take the classic story of Blockbuster and Netflix. In this case of leader vs. lagger, Blockbuster dominated the video rental space for decades until a failure to prioritize modernization sealed their eventual fate and colossal decline.

When Blockbuster was faced with the choice to modernize, they chose the familiar and, until then, successful brick-and-mortar business model. Opting for stagnation instead of proactively mitigating the risks of new technology and changing consumer preferences, they could have worked to eliminate the competition and invest in the future with new adaptive angles. Instead, they fell victim to modernization. As reported by Forbes:

“The irony is that Blockbuster failed because its leadership had built a well-oiled operational machine. It was a very tight network that could execute with extreme efficiency but poorly suited to let in new information.”

Their inability to welcome new information, keep a pulse on advancing technology, and evolve consumer needs led to reactive failure. A perfect storm of poor decisions led by an understated sense of urgency and lack of visibility opened the door for new competition.

When Blockbuster was faced with the choice to modernize, they chose the familiar and, until then, successful brick-and-mortar business model.

With a culture of modernization and the technology to support them, Netflix quickly capitalized on introducing online platforms for video streaming and swept the marketplace. Fast forward – A day late and a dollar short, Blockbuster spent $400 million in a reactive effort to modernize and create their own streaming subscription service (CNET – Blockbuster Goes On-Demand). Unsurprisingly, this effort failed, leading to their eventual bankruptcy and downfall in the following short years to come.

While simple, the underlying lesson in this tale of leaders vs. laggers is to avoid the dangerous assumption that the “way we do things now works and will never change.”

The Truth About Modernization: Overcoming Barriers to Adoption

Bolt-on modernization strategies of the past simply circled around “adopting” new technologies, leading organizations from one technical barrier to another. Issues of data control leading to expensive regulatory and security risks only complicated legacy programs and productivity challenges – the exact opposite of their intended adoption.

At Effectual, we continue to elevate and enhance modernization strategies with the technology to enhance operational processes and create a culture of innovation that truly drives both organizational and digital transformations. This systematic approach involves working with customers to develop a deep understanding of their business challenges, creating long- and short-term technical solutions, validating proof of concepts, and developing and executing effective migration plans to ensure seamless connectivity and coordination.

With a proven methodology and decisions based on analysis and understanding of future-state goals, customer solutions are designed and built to use native AWS and third-party tools to avoid pitfalls and reduce complexity.

This level of transparency and shared understanding removes assumptions and the challenges tied to existing opinions, setting the stage for fresh, innovative, and truly adaptive solutions. Synthesizing these insights into proposed solutions guarantees their feasibility and functionality, with final validations to ensure they are executed successfully. This process allows business leaders to optimize costs while focusing on core business functions and projects as the transformation from legacy to new programs and solutions unfolds.

For example, with modernization and cloud migration, Effectual eliminates any question of time, skills, and vision to achieve success by streamlining operations for a 40-50% reduction in the total cost of ownership (TCO). Not to mention added reliability and performance powered by automated security and operations.

Your Partner for Modernization

As evident in the aforementioned examples, unlocking the power of modernization requires a partner best suited to streamline, simplify, and support successful configuration and adoption. One with a suite of modernization tools and demonstrated experience to realize the full potential of a modernization engagement through concrete cost-savings.

Effectual is a leader in AWS services and holds the HashiCorp Infrastructure Competency. We can help customers understand the tools and modernization paths required to extract the most value from their IT spending and maximize cloud infrastructure today.

Learn more about our IT Cost Optimization and Cloud Migration and Modernization Services.