Much of IT terminology is often misused and misapplied. Modernization and transformation are two such terms. They are often used interchangeably even though they mean different things and have very different connotations. Indeed, it is somewhat safe to assume that in IT any transformative effort is likely to also have a modernizing effect, and thus, we can see these as levels of improvement efforts. However, many businesses are being led to believe if they don’t transform now they risk becoming irrelevant when they would be equally well-off to simply modernize existing IT services saving millions over transformation.

I often witness solution architects using the term transformation with regard to their designs, and upon review I see that the solution doesn’t affect how the IT organization is operating. Ultimately, they have new tools and modern capabilities, but the same “towers” that are there now remain in tact in the to-be architecture. In these cases, I question the architect, “where is the transformation?” The transformation should result in a fundamentally different working organization post-transformation than when it started, otherwise, it’s simply a modernization effort.

To be clear, there’s nothing wrong with a modernization approach if the business is achieving it’s goals with the current IT systems and processes. I’m working with one such client right now that is struggling with service management quality issues. We don’t need to transform the client’s data center environment to succeed, we simply need to modernize and consolidate some of the tools and approaches in order to incorporate more automation and more predictive monitoring. Alternatively, I asked Tim Crawford, CEO, AVOA, and well-respected CIO advisor, to provide an early review of this blog to wit he pointed out that it’s also important not to adopt a mantra of modernize when transformation is required or to avoid the complexity that transformation entails. That is, all too often, IT organizations use modernization as a replacement for undergoing a longer and more expensive transformational effort meanwhile the cycle of deterioration of their systems continues.

A great analogy that captures this home renovations. If the structure of the house is sound, but the style of the home is dated, then modernization efforts will update the look of the home without replacing critical infrastructure. For example, replace carpets with laminates, update kitchen and bath with new appliances and fixtures, and provide a new coat of paint. Essentially, the home space may be more maintainable and support a simplified lifestyle, but the flow and layout are still same.

In contrast, transformation incurs changing the physical structure of the home. Perhaps tearing out a wall to enlarge a living space, adding an extension or finishing an unfinished space. In each of these examples you’re changing the use and flow for how the house is lived in.

There are extreme variation in costs between these two approaches. Modernizing a home can be done for a fraction of the cost for a transformative effort, while still providing great enhancements to the living situation. And, the same is mostly true with regard to delivering IT services. For example, if you provide compute infrastructure on an application-by-application basis and you switch to cloud computing, you are undergoing a transformative approach, however, if you are already using virtualization software and you move to cloud, the way you think about resource management, governance, deployment, etc. all remain fairly similar, but there may be a need to learn new tools to support these processes.

So, when is transformation required over modernization? When change becomes too high of a risk, then modernization is no longer an option. Many businesses are caught in this pattern right now where they’d like to be more agile and responsive to business requirements, however, are limited by a multitude of factors that unknowingly work together to lock IT in this state of immovability. Examples of these factors include:

  • A culture of fear to contribute (or keeping your head down)
  • Failure results in severe penalization
  • Loss of too much tribal knowledge with no documentation
  • Year over year reductions in IT budgets
  • Business stopped paying annual maintenance on software and/or running software versions that are no longer supported by vendor
  • Forced to extend end of life for hardware beyond reasonable limits
  • Little to no investment in training and/or modern IT skilled individuals

While many academically talk about undergoing IT transformation or are one of the small percentage of inspirational success stories, there are tens, if not hundreds, of thousands of businesses that live this existence everyday. To make matters worse, the executives of these businesses are now being told by the market that they need to “digitally transform” or they may be gone in ten years. In turn this pressure to transform is then cast upon the already immovable IT organization.

In these cases, modernization should be considered “putting lipstick on a pig.” The key business processes and underlying systems of record have become so complex and difficult to change that changes are enacted usually only once annually and the period for actual development on these systems is shortened significantly due to the need to ensure thorough testing.

One may wonder, couldn’t these businesses institute a parallel transformation effort? Sure, which is from where recommendations, such as Gartner’s Bi-modal strategy, emanate. However, I view Bi-modal strategies as an approach to take when between a proverbial rock and a hard place. They are required because nothing else will work given the current operating environment. Moreover, it would require that someone be empowered to lead a parallel effort, which is unlikely given the current conditions. Unfortunately, for many of these businesses, they will be required to have a “rock bottom” moment as motivating event to invest in transformation.

3 thoughts on “Modernization or Transformation: Which Is The Right IT Fix For Your Business?”
  1. The article is very straight forward and does a nice separation. I have spent 30+ years helping companies NOT pay $300 and hour to people who have a “grand plan” when quite a few $5 parts have gone missing. My real comment is, How do you evaluate what the success was after a transformation ($$$$) or modernization (fuzzy)? If the total infrastructure benefited from the experience, then I am a fan. If someone’s agenda was realized, but not for the whole, then I am lost.

    1. I believe you can only determine success when you’ve identified appropriate goals up front. I don’t know if there’s a general “success” to be had in transformation. It has to be associated to business goals and initiatives.

  2. When we boil it down, Modernization is changing the “HOW” while Transformation is changing the “WHAT” along with “HOW”. After completing a home renovation, our “WHAT” we do with our home has greatly expanded and changed behaviors. I will use these examples with my customers.

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