Pay It Forward: Maximize Value From Your Legacy IT Estate

Few organizations can flip a switch to a modern IT infrastructure and data landscape. Yet instead of viewing the legacy environment as a burden, imagine maximizing the value of existing data and IT assets. What’s key: make them an essential pillar of a modern enterprise with the right partner and platform.

Companies have doled out trillions of dollars on IT products and services over the last decade, but research indicates that about three-quarters of that investment is directed to operating and maintaining existing IT systems. In addition, at least $2.5 trillion was spent on replacing legacy IT systems, of which an estimated $720 billion was wasted on failed efforts.

Regardless, a smart modernization strategy is table stakes in today’s digital business world. A survey by management consulting company Avanade found that IT leaders tie effective IT modernization to the ability to boost annual revenue by over 14% while reducing operating costs by 13%. In fact, 65% of those surveyed said the conventional systems in use today are not aligned with what’s required for digital business, and 80% believe not modernizing IT systems will negatively impact long-term growth.

If modernization is key but wholesale replacement of the IT estate improbable, how can companies move forward and optimize results? The answer lies in orchestrating a phased approach to modernization with a partner and a platform that provide the benefits of a cloud experience wherever data and key IT assets reside. This enables organizations to pinpoint the workloads and legacy systems most in need of transformation while maximizing the value and performance of those that are still delivering for critical KPIs and intended business outcomes.

“Companies need to move ahead quickly, but they don’t need to modernize everything all at once,” notes Edward Faichtyger, managing practice principal for the HPE Global SAP practice. “Anytime you modernize, it is a huge cost undertaking, from consulting to hardware and software licensing. It’s really about doing a pinpoint approach versus a big bang approach, especially as you get into regulated industries that need to take careful steps as they move forward.”

A Blueprint for Modernization

To maximize the value of legacy IT assets, a phased approach to IT modernization should encompass the following steps:

• Take stock of the current landscape. Too many companies don’t take this very basic first step to IT modernization. Without analyzing the current environment, organizations lack a clear picture of what IT assets are in play and how well those assets are performing to achieve intended business goals.

As part of a formal assessment and blueprint analysis, organizations should evaluate the entire legacy estate through the lens of core business KPIs. Working with the right partner, organizations identify critical pain points, map out what the workloads and data are and where they reside, and correlate which systems are crucial to advancing core business strategy.

“We look at what our customers are doing today to help them drive decisions for tomorrow,” Faichtyger says. “We examine how they currently operate, how many staff they have working remotely, how much custom code they have, and/or whether they’re partial to an OpEx or a CapEx model. All of this plays into deciding where workloads should run in the future.”

• Determine modernization priorities. HPE consultants leverage a formal assessment to determine IT modernization priorities, based on strategy and need. Some infrastructure equipment may still carry depreciation or be under warranty. Some legacy applications still work as needed so they can be slated into the latter-stage modernization road map.

For example, in today’s business climate, supply chain issues and remote work are top of mind, which makes it more likely for logistics systems and HR applications to be among the first to be transformed. In contrast, in light of ongoing travel restrictions, legacy travel applications can likely remain as is for the foreseeable future, Faichtyger explains.

Because legacy data and the IT estate are interconnected, it’s important to think through all the interfacing applications as part of the prioritization road map. For instance, when modernizing financial processes, it’s not just the core system but also auxiliary capabilities such as payroll, order to cash, and AP/AR. “You have to evaluate holistically and look at workloads and all their dependencies,” Faichtyger says. “You can’t leave that out of the mix as you modernize.”

The Bottom Line

The ability to deliver the modern constructs of IT without actually migrating everything to the cloud addresses many of the needs and concerns of today’s IT and business leaders. In the Avanade study, 89% of the respondents indicated that modern software engineering approaches and process automation technologies (92%) are key to addressing digital business requirements. At the same time, only 33% of the respondents have modernized systems and technologies, due to the challenges.

With HPE as a trusted advisor and the HPE GreenLake platform to usher in cloud capabilities where needed at scale, organizations can set their own pace for data-first modernization and align the journey with their specific business strategy and goals.

To find out more about how HPE consulting services can ease the legacy transition and how HPE GreenLake cloud services bring the cloud to where your apps and data are, visit https://www.hpe.com/us/en/greenlake/cloud-adoption-framework.html.