Overcoming Key Challenges of Application Modernization
Although most IT executives see the value of application modernization, fewer say they are making progress.
According to IBM, “83% of executives agree that modernizing applications and data is central to the business strategy of their organizations. But fewer than 30% have modernized workflows, including the related applications, systems, and data. Three in four executives say they still have disparate systems using traditional technologies and tools in their organizations — and most are still in the planning or preliminary stages of modernization.”
IT executives told IBM that the biggest challenge to modernization is financial. Technical, expertise and cultural challenges are also in play. To address the biggest financial hurdle, IBM recommends that organizations do the following:
- Understand the true impact of staying with legacy systems by capturing all costs, including market competitiveness, customer satisfaction and employee retention.
- Broaden their view of financial success to include all the direct and indirect ways that modernization will pay for itself.
- Track the costs and value realization of modernization in phases to show incremental improvements, adjust as needed, and justify the expenses and effort.
DISCOVER: Realize the benefits of your organization’s hybrid cloud environment.
Three Reasons Why Financial Institutions Should Modernize Apps
Modernizing legacy applications will allow financial services organizations to unlock the full potential of the hybrid cloud. Here’s how it can help organizations be more scalable, secure and compliant.
Scalability: One of the biggest limitations of legacy systems is their inflexibility. Traditional on-premises infrastructures often require substantial hardware investments, making it difficult to scale up or down based on business needs.
Modernizing applications to run on cloud or hybrid cloud platforms leverages the cloud’s infrastructure, which is easily scalable. Resources can be adjusted dynamically based on transaction volume, for example, and digital tools such as AI and advanced analytics can be integrated into the workflow without significant redevelopment.
Security: Many legacy systems can actually introduce new vulnerabilities. “Since older tools were never designed to work with web-based services, they lack the security required to keep data safe,” CDW’s Hiemstra writes.
Modern applications have the latest security features, such as end-to-end encryption, advanced identity management, automated threat detection and consistent updates, to defend against cyberthreats and secure sensitive customer data.
Compliance: Financial services are highly regulated, and because legacy systems struggle to keep up with an evolving regulatory environment, organizations that rely on these older systems can be exposed to risks.
When financial institutions modernize their applications to operate on cloud platforms, they can also take advantage of built-in features that support compliance with regulations such as the Sarbanes-Oxley Act, the Gramm-Leach-Bliley Act and the Payment Card Industry Data Security Standard.
Modernized applications also give organizations better visibility into their data, which makes it easier to maintain audit trails and demonstrate overall compliance.
