Modern innovation is how companies differentiate, and AI is the prime example
In a world where technology evolves at breakneck speed, it’s astonishing to realize that many businesses still rely on systems built decades ago. Imagine this: 220 billion lines of COBOL code are still running in production today, powering critical operations in industries ranging from finance to government. These systems, often maintained by developers who are now in retirement homes, underscore a stark reality—our modern economy is deeply intertwined with aged technology. This reliance on legacy systems poses significant risks and challenges, yet it also highlights the resilience and longevity of COBOL. As we forge ahead into the future, the question remains: how long can we sustain this dependence on the past?
Innovations like generative AI are quickly becoming the baseline for how organizations differentiate. From companies like the Volvo Group using Microsoft Azure AI and Microsoft Azure AI Document Intelligence to streamline their invoice and claims process (saving Volvo employees about 850 hours a month) to Medigold Health using Azure OpenAI Service to automate administrative tasks for clinicians giving them time to focus on patient care.
Organizations are sensing that if they don’t truly transform, they risk being left behind and missing the AI wave. “AI is redefining work and it’s clear we need new playbooks,” said Ryan Roslansky, CEO of LinkedIn. “It’s the leaders who build for agility instead of stability and invest in skill building internally that will give their organizations a competitive advantage and create more efficient, engaged, and equitable teams.”
Accelerate app and data estate readiness for AI innovation with Microsoft Azure
Innovation requires transformation and modernization of your business across people, process, and technology
Setting a strong cloud foundation is paramount for organizations striving to achieve superior differentiation. However, migrating to the cloud isn’t the end point, it is merely the starting point and a pathway to further improvements. Continuous cloud migration and modernization make it significantly easier for organizations to deliver successful transformation initiatives and be future-ready.
In fact a 2024 Forrester study states that, “Organizations must increasingly adopt a mindset of continuous modernization to keep pace with shifting customer expectations, drive innovation, and fuel profitable growth. Just moving to the cloud is not enough: Modernization, incorporating advances like generative AI (GenAI), is playing a critical role in driving competitive advantage.”1
Continuous modernization is an ongoing process that features a clear technology strategy built around innovation and employee training, integrated key metrics tied to business outcomes, and upgrades to your technology stack powered by the right strategic partnerships.
But there are challenges and requirements standing in the way of continuous modernization
Many businesses recognize the need to take this sort of approach to modernization: according to a 2023 Forrester survey, 89% of decision-makers said their firm plans to increase or at least maintain their current application modernization investments over the next year to achieve key business priorities and address modernization gaps. However, only one in five respondents said their firm has already begun to overcome foundational barriers in its application modernization journey to bring critical value back to the business.
Why? For one, many legacy systems can’t support the requirements of modern tech like AI-powered applications, leading to excessive manual processes and clunky stopgap measures. In fact, 53% of business decision makers (BDMs) say that operations are simply too slow at their firms to take the next step in their application modernization journey according to the Forrester survey.
Once organizations get to the implementation phase of modernization, 48% of survey respondents say that they lack required IT skills, which can make it difficult to to plan and execute holistic modernization, and they also have a hard time filling employee tech skill gaps.
So how can businesses best position themselves to mitigate these challenges and achieve modernization success? Earlier, I mentioned that continuous modernization is an ongoing process that features a clear technology strategy built around innovation and employee training, integrated key metrics tied to business outcomes, and upgrades to your technology stack powered by the right strategic partnerships.
How to think about modernization
Modernizing applications is a transformative journey that requires careful planning and strategic decision-making to balance immediate operational needs with long-term goals.
Organizations must begin by thoroughly assessing their current technical landscape, business objectives, industry trends, and internal capabilities before selecting the most appropriate modernization path—whether that’s using managed platform as a service (PaaS) services for maximum cloud benefits, containerizing applications with Azure Kubernetes Services, reimagining applications as cloud-native services, or using Azure’s hybrid capabilities to evolve at your own pace. The right approach depends on your specific circumstances and constraints, with options ranging from incremental improvements for established systems to comprehensive application refactoring for organizations seeking full cloud advantages.
Ultimately, a well-executed Azure modernization strategy does more than just update technology, it liberates IT teams from routine maintenance tasks, allowing them to focus on innovative initiatives that drive competitive advantage and business growth in an increasingly digital marketplace.
Azure can support your continuous modernization process at each step along the journey
We understand that navigating any transformation project can be daunting, but Azure helps companies modernize every day by offering comprehensive guidance, expert help, cost-saving strategies and tools, and more. Embracing Azure’s managed app and data PaaS lets you automate manual tasks and streamline and standardize development processes—empowering your developers and IT teams to be more productive and focused on innovative solutions for your customers.
Understanding the state of your IT estate
Any cloud migration and modernization project starts with getting a consolidated view of app, data, and infrastructure to understand your IT estate.
This can be a daunting first step, with applications siloed in different parts of your organization that are hard to understand together. Through our Solution Assessment Program, we provide a robust set of resources that enable you to run a comprehensive assessment of your IT estate. By streamlining your first steps, you can focus on creating a cohesive strategy and commencing your modernization projects.
Use outcome-aligned technical skilling to help your employees operate with new paradigms
By equipping teams with the right skills, businesses can unlock the full potential of modernized applications, ensuring successful transformations that drive measurable business outcomes. Azure offers extensive skilling workshops and tools for IT pros, developers, technical managers, and others that teach employees at every level of your organization how new technologies impact them and their work.
These role- and scenario-based trainings are easy to use for busy IT and developer teams and allow them to quickly understand and use their new tools to build AI-powered modernized apps. Skilling can be the difference between transformative, modernized applications and partially implemented, ineffective initiatives.
Working with Azure to modernize means factors that often lead to success are built into the process, allowing you and your team to focus on innovating.
“I think it has been a very well-rounded partnership. We’ve learned how to work in lockstep and be productive as we work together,” says Sahil Gupta, NBA Senior Vice President and Head of Application Development. “We’ve learned how to better utilize Microsoft Cloud and the resources and data systems that exist at Microsoft. We are committed to staying current with innovative technology like Web 3.0 and metaverse—bringing that knowledge into the NBA has been paramount.”
Wherever you are on your digital transformation journey, we want to help you take the next step
Whether you’ve already begun your cloud journey or are planning to commence soon, Azure can help you actualize your transformation vision regardless of your cloud approach—whether hybrid, single, or multi-cloud.
Microsoft has a robust partner ecosystem of Azure specialized partners that support organizations in their continuous modernization efforts.
Modernize for AI Innovation
Accelerate app and data estate readiness for AI Innovation with Microsoft Azure.
1 “Checklist: Steps To Operationalize AI Innovation Through Application Modernization,” Forrester, June 2024
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