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Modernization Is Not Optional

| by Saul Caganoff on Dec 10, 2013. Estimated reading time: 1 minute |

Royal Bank of Scotland, one of the top 10 banks in the world, recently experienced its third major IT systems failure in 18 months. The CEO admitted that "for decades, RBS failed to invest properly in its systems." This incident has prompted David Sprott, founder and CEO of consulting firm Everware-CBDI to write about the neglect of systems modernization which seems endemic to the banking industry.

David writes that the root problem is that many banks and large organizations:

"...have allowed their systems to evolve without good architecture and governance. [Legacy] systems are held together with sticky tape and sealing wax, and modified piecemeal to adjust to new requirements, and the new systems create more and more interfaces and dependencies (including duplicated, hard coded business rules), so that eventually the systems resemble a hair ball."

The problems of increasing complexity and risk then become apparent when changes in processes, software or environment are made without full knowledge of all the implications because of lack of knowledge, documentation or code.

David fears that "modernization" is misunderstood as merely shifting applications to a new platform without addressing the more important architectural or organizational problems. Instead, David asserts that modernization encompasses a broader remit including:

  1. Establishing a lingua franca between business and IT so that modernization issues and implications are genuinely understood by both business and IT management.
  2. Defining a business systems architecture that a) facilitates transformation with low risk and b) progressively develops an inherently agile architecture, that can evolve continuously.
  3. A roadmap for progressively rationalizing the business systems portfolio to comply with the architecture.
  4. Implementing an integrated business and IT organization that owns the business systems.
  5. Implementing knowledge management around business systems that ensures integrity and consistency and ownership of processes, information and rules.
  6. Implementing a continuous Agile modernization and ongoing evolution process in both business and IT.
  7. Establishing coordination, governance and risk management that ensures architectural integrity at all stages of the life cycle.

David points out that this list shows the problem is not limited to the IT department but is a general management problem that can only be addressed if business management and IT can communicate and collaborate effectively. David finishes his article by pointing out that almost all large organizations share these problems and the message he'd like to send is that "modernization is not optional."

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