Modern Thinking

Continued

Modernization Challenges

If the whole modernization process sounds complex, that's because it can be. Inadequate assessments of application portfolios, lack of employee adoption of new systems, unsuccessful integrations, or even a simple drying up of funding can all negatively impact modernization projects. And even successful modernization projects require substantial investment.

But in almost every case, efforts to avoid or postpone the effort of modernization will come back to bite IT management. The risks of not modernizing are significant. Aging legacy technologies are expensive to operate and maintain, draining IT departments of precious dollars that could be spent on systems that help generate additional revenue. Their complex design based on legacy concepts makes it difficult to implement changes, thus increasing the challenge of responding to shifts in the market, and they require skills that are in short supply as the programmers with knowledge of languages and systems such as Natural, COBOL, Virtual Storage Access Method (VSAM), and PowerBuilder approach retirement. Furthermore, legacy systems typically don't track business processes well enough to satisfy the compliance requirements of today's rigorous regulatory landscape, a limitation that could put a company's executives in serious jeopardy.

Even so, many companies allow fear of the unknown to prevent them from proactively diving into modernizing systems that, admittedly, are still doing the job. What they fail to grasp is that they're just trading in one type of pain for another, potentially worse alternative.

"There is an inherent cost of doing nothing," says Lance Knowlton, vice president of modernization solutions at Oracle. "Many customers look at their legacy environment and are in a state of denial. The systems haven't fallen down, and they know that it can be expensive for them to take the systems and move them forward. But we know that at some point, these systems are going to cause problems."

Getting Open

Take, for example, the insurance industry, where the mounting challenges posed by legacy environments made the need to modernize apparent several years ago. Many insurance companies began looking for packaged applications to replace core legacy systems that handled claims processing, but their searches failed to identify anything that met their needs, so they stopped looking.

"Five, seven, eight years later, their applications have declined, and they're back to thinking, 'Now I need to go ahead and do something about them, but now I'm eight years closer to the retirement of all of the skill sets that I've got,'" says Dale Vecchio, research vice president, Gartner.

That is precisely the scenario that Oracle—with the help of a bevy of partners such as Accenture, CSC, EDS, HP, Perot Systems, and Unisys—is trying to prevent. While Microsoft tries to convince large companies to move to its .NET architecture and IBM attempts to keep its customers on its proprietary mainframe platform, Oracle has opted to help customers formulate a strategy for getting from point A to point B. In other words, as long as customers take the initial step of migrating to open architectures, there will be opportunities to promote a whole universe of standards-based applications, middleware, and supporting infrastructures.

That approach has been packaged in a no-cost service dubbed Oracle Modernization Insight, in which a team of Oracle modernization experts works with a customer to formulate a realistic strategy for establishing a standards-based, process-driven SOA environment and determine a road map to get there. Naturally, in its role as modernization consultant, Oracle educates customers on its applications and technology stack for implementing modernized applications—from its suite of service-enabled applications to Oracle Fusion Middleware, Oracle Database, and third-party hot-pluggable SOA-based products—and makes sure they understand that the Oracle products can support even the most demanding business processes.

"A lot of customers believe that the horsepower that exists on their mainframe cannot be reproduced in an Oracle environment, and that is just simply not true," says Knowlton.