Explaining how to reduce maintenance costs and promote DX through modernization

What is modernization?

Modernization is a word that literally means “modernization,” but especially in the context of IT, it refers to updating the infrastructure environment such as the hardware and software of outdated business systems to maintain and strengthen a company’s competitiveness. It represents an initiative.

Modernization is an effort to update so-called “legacy systems” and develop efficient systems with the latest architecture. Legacy systems tend to have high maintenance costs, and often have architectures that lack mobility, such as requiring time to modify.

Operating and maintaining legacy systems is a huge burden for companies. In recent years, the issue of companies being overwhelmed with maintaining legacy systems and unable to secure financial and human resources for new investments has become an issue.

Background of the need for modernization

Why is modernization needed now? Below, I will summarize two points: cost and mobility.

Reduce IT maintenance costs

The first example is in the context of reducing IT maintenance costs. As pointed out in the Ministry of Economy, Trade and Industry’s DX Report*, approximately 80% of the IT costs paid by companies are spent on continuing existing business. Currently, this cost is a heavy burden for companies.

As the costs required for so-called run-the-business operations remain high, many companies do not have the capacity to invest in new investments, which is hindering Japanese companies from increasing their international competitiveness.

Ensuring mobility for DX promotion

Modernization is also necessary in the context of promoting DX. In order to promote DX, it is necessary to link data from existing systems and add functions to the system, but in general, the cost of renovating legacy systems is high and it takes time.

This is due to the complexity of legacy systems that have been operated and modified over many years. Even with simple fixes, there are various problems, such as the scope of impact being large, the cost of verification being high, and the lack of human resources capable of grasping the contents of complex systems.

Data utilization is also important in promoting DX, but in companies with a long history, useful data is often already hidden in legacy systems. On the other hand, data in legacy systems is not sufficiently standardized and requires name matching, and data formats and coding systems vary depending on the system. Modernization will also be an effective method for utilizing this data.

Against the backdrop of these challenges, the current situation is that companies are placing an emphasis on modernization.

How to proceed with modernization

So how should we proceed with modernization? Here, we will introduce the following four steps.

• Concept formulation
• Target system/priority analysis
• Choosing a migration method
• Architecture selection

Concept formulation

Modernizing individual systems individually will not lead to overall optimization. When implementing modernization, the first point is to create an overall concept.

Specifically, an enterprise-wide IT architecture needs to be defined. For example, one idea might be to use the cloud as a common platform to build an authentication environment, DWH, data lake, etc., while defining the contents of individual business applications for each system.

Utilizing data is the most important point in promoting DX. It is necessary to take full advantage of data governance when modernizing each system, taking into account so-called data governance aspects such as centralized data management methods and security aspects.

Target system/priority analysis

Modernization requires a certain amount of investment. It is not practical to migrate all of your company’s systems to the latest architecture. Therefore, it is necessary to prioritize the existing systems and then assemble the implementation order.

The key to setting priorities is to set and organize your considerations. For example, by analyzing existing systems on the axis of “frequency of use” and “frequency of modification,” the degree of importance can be determined.

Systems that are “infrequently used and infrequently modified” have a low priority for modernization, and in some cases, you may want to consider abolishing them. Additionally, for systems that are “frequently used but infrequently repaired,” you can choose to extend their lifespan as much as possible. On the other hand, for systems that are frequently used and repaired, early modernization can significantly reduce maintenance costs.

In addition, if there are areas that you would like to prioritize as part of your business strategy or processes that you would like to implement DX, we will take those into consideration in your priorities. Although it is not used often at present, if it is an area that you want to focus on as a business in the future, it will be a high priority.

Choosing a migration method

There are various options for migrating existing systems. Specifically, the details are as follows.

From these options, it is effective to categorize them into patterns based on the usage status of the existing system, whether there are any issues, business conditions, etc. For example, if the system is scheduled to be reviewed or reformed to promote DX, etc., choose rearchitecture or repurchase. On the other hand, for systems that are not frequently repaired and are of low importance, a temporary lift and shift may be an option.

Architecture selection

Especially when updating an existing system through re-architecture, it is necessary to consider the architecture after the update. For efficient modernization, it is effective to use cloud services such as SaaS and PaaS. By utilizing these, it is possible to develop quickly to keep up with the business environment and new initiatives of competitors.

As a cloud-first, one idea is to set criteria for making decisions, such as choosing SaaS first if SaaS is available, using IaaS if it is not available, and using on-premises only if it is absolutely necessary to build an on-premises environment.

For applications that are a source of competitive advantage or a differentiating factor, we will also consider developing modern architectures on IaaS. On the other hand, for functions that have similar needs in each system, such as workflow, authentication, and archive functions, it is an option to use them as common services as described above.

Points to note when modernizing

Here are some things to keep in mind when modernizing.

Introducing a common platform is important

A key point in modernization initiatives is the consideration of common infrastructure. Traditionally, system development has often been individually optimized, leading to various problems such as frequent system coordination, suboptimal function placement, and duplication of functions and data.

By standardizing systems as much as possible on a common basis, a company can aim for an overall optimal system. As we have introduced so far, building a common cloud environment and providing common functions are also effective methods. Other possibilities include standardizing company-wide operations by introducing ERP, building a common data infrastructure by introducing DWH/data lake, and providing an environment that users can use such as BI, RPA, and low-code development platforms.

Additionally, it would be effective to introduce a common platform for system operations, such as a centralized operation monitoring tool and DR platform.

Review of business operations was also carried out in parallel.

When modernizing, there are many cases where system-side responses alone are insufficient. In particular, when introducing a system using SaaS or packages, it is essential to review your business operations. If you force customization without reviewing your business, the issue of “maintenance costs remaining high” will not be resolved.

In parallel with modernization, business operations should also be reviewed.

Beware of operational complexity during transition period

Due to cost and resource considerations, it is difficult to modernize all systems in one step. Therefore, companies will have to deal with a transition period.

Particular attention should be paid to the complexity of operational management. In addition to operational management of existing on-premises systems, it is also necessary to support operational management of newly added cloud environment systems.

In this way, there is a problem in that during transition periods, the burden on the operational department tends to increase. In order to respond to this situation, you should consider automating operational tasks, utilizing AIOps, and introducing operational management tools that are compatible with both on-premises and cloud computing as operational DX.

What is LogicMonitor that realizes operational DX?

In the transition period of modernization and the standardization of company-wide IT infrastructure, an integrated IT operations management tool that is compatible with all environments is required in order to efficiently proceed with operations management operations.

LogicMonitor is a SaaS-type IT integrated operation monitoring service. Centrally realizes operational monitoring of various systems, whether on-premises or in the cloud. 3,000 types of monitoring templates are available, covering various IT layers such as servers, networks, storage, OS, and containers.

LogicMonitor can be used as a tool to promote modernization and streamline increasingly complex operational tasks. LogicMonitor will be an effective option for proceeding with operational DX.

summary

In this article, we provided an overview of modernization and how to proceed with it. Although promoting modernization is necessary for companies, it is also necessary to consider the complexity of operations during the transition period. As you move forward with modernization, you should also consider operational improvements.