Banks face three major roadblocks when executing an application migration strategy
Lack of agility
Outdated waterfall processes and multiple layers of decision-making can impact an organization's ability to adapt and respond quickly to change. While banks often rely on traditional waterfall methodologies to approach change, these can slow down cloud migration and other digital transformation projects with long lead times, delays, and inefficiencies. The old way of doing things doesn't align with the new and innovative capabilities offered by the cloud's modern technology tools and platforms.
“The larger the scale—if you're talking about hundreds or even thousands of enterprise applications—the bigger the impact a lack of agility will have,” says Iryna Aliakseyeva, Business Analysis and Quality Assurance Manager at BDO.
What's the solution? Banks must be deliberate in adopting a more flexible approach that allows them to adapt to change effectively. This means having the right people, processes, and technology in place to help drive innovation forward, and change course when absolutely necessary.
Legacy technologies and high technical debt
How much legacy technology debt is your organization carrying? Every bank has aging technology infrastructure and disconnected systems deployed over time—often customized, upgraded, and patched through years of expansion and organizational change, and frequently supported with poor documentation.
To add to the problem, the original business and technical owners may have moved on to other roles or organizations. Critical information about the application's architecture, functionality, design, and source code is often limited or even lost entirely.
What's the solution? Reverse engineering of the logic and functionality can determine an application's intended purpose and how it works, but that alone doesn't complete the picture. In many situations, banks need to combine reverse engineering with a top-down approach that prioritizes new business requirements and capabilities, as well as identifies applications that are no longer needed.
Performing an options analysis can also determine the best cost- and value-efficient scenario for an application, whether it's repurchasing a software as a service (SaaS) solution to replace it, developing a modernization/refactoring plan, etc.
Applications and their owners frequently operate in silos, with limited standardization when it comes to processes and methodology. As a result, the modernization and cloud migration process is difficult and overly complicated.
“Systems often duplicate tasks,” says Kedar Kulkarni, a Practice Leader with BDO's Data and Analytics Advisory team. This duplication leaves banks with considerable overlap in some areas and gaps in others. “The same task is performed by one or more applications, but then there's a lack of certain activities being performed as well. The organization needs to take a holistic view to ensure all these systems are aligned.”
What's the solution? Perform a detailed application assessment and rationalization exercise. Having inventoried and categorized your portfolio of applications during the envision stage of your cloud journey, the next step is conducting a more detailed assessment that includes mapping applications to enterprise capability models. This clears the path to perform the detailed options analysis mentioned above, which will prepare the organization for large-scale application migration to the cloud.
By addressing the challenges above and incorporating them into your strategy from the beginning, your organization will be better positioned for a successful cloud migration.
Successfully executing a large-scale cloud migration strategy
“Transforming the entire ecosystem all at once is too ambitious,” says Kulkarni. The strategy that makes sense for banks, he explains, is to focus on quick wins and pilot projects, which will help garner support for subsequent phases of migration.
Executing a successful application migration includes the following steps: