Technology choices

1. Force-fitting technology solutions: Are you choosing technology out of context?

Watch out when technology decisions do not attract business scrutiny beyond cost and a cursory discussion of “scalability/strategic alignment.” For instance, we hear in many organizations about a “microservice-first” approach. While microservices are a critical component of many IT modernization journeys, they don’t fit the bill in all circumstances.

At one major corporation, the architects of the transformation suggested an approach that built microservices for a client-side application. But microservices is fundamentally a server-side architecture. The architects were simply responding to an organizational push to become technologically modern, but since installation and management of a client-side application was much more cumbersome due to the multiple independent components that would need to work together seamlessly, the approach would have resulted in significant cost and complexity with no additional benefit.

Recommendation: Leaders need to raise their hands to ask “silly” questions to fully understand the rationale and purported benefit of the recommended technology choices. In the preceding example, an executive’s simple series of questions, starting with, “Explain microservices to me as if I were an eight-year old,” could have saved the company millions of dollars!

2. Adopting cutting-edge tech that’s not fully mature: Are you adopting new technology that seems promising but doesn’t have a proven track record?

With stability and scalability as two core elements of any IT organization’s focus, very careful due diligence and decision making are needed to avoid adopting technologies that haven’t fully matured. Leaders should be cautious about any technology recommendation that is pitched primarily because it is in vogue or promises to attract new talent.

A leading bank launched a major redesign for its customer-facing application, using the latest web front-end framework as the software solution stack. It was touted as “future-proof” technology that would attract new talent. The project suffered serious setbacks and cost overruns because staff didn’t have the right capabilities to support it, resulting in time and money to upskill them. It was finally delivered after two years—18 months behind schedule.

Another major bank decided to rewrite its core accounting systems, which were more than 20 years old. While the systems were clean and extensible, the bank wanted to use the latest data-store technology. The project was shelved after an investment of more than €100 million because the new technology was not stable and the architecture created to support it had several fatal flaws.

Recommendation: Choose simple, proven technologies with which your people are familiar.

3. Building out your own cloud infrastructure without sufficient capabilities: Have you let security and regulation block your adoption of public cloud?

Companies are looking to take advantage of new infrastructure platforms and technologies such as container orchestrators, serverless platforms, and analytics solutions. These are complex pieces of technology that major cloud providers are constantly evolving, both in terms of capabilities and reduction in price point, to win the market.

If providing cloud-based infrastructure is not your core business, it will be impossible for you to match the cloud providers on the talent needed to build and run these platforms in a scalable, efficient, and secure way. Moreover, your (digital) competitors will be using these providers to enable them to operate at a completely different price point. At one major financial-services company, we identified more than four different private-cloud initiatives—converged infrastructure, OpenShift, Mesos/Marathon, and OpenStack—each struggling to achieve scale and competing for talent. After many months, the company halted those programs and rightly focused on public-cloud solutions. This is just one of more than 50 examples of private-cloud initiatives that have failed to deliver, often after the investment of millions of euros.

Recommendation: Focus your IT-for-IT investments in public cloud. Start by adopting only one of the major public-cloud providers for running your application workloads. Do not pursue a multicloud approach at first, as all major platforms differ significantly in setup and usage and require inordinate effort and investment for a similarly customized setup. For IT tooling, leverage SaaS solutions, such as workflow systems, source-code management, continuous integration, and collaboration platforms, as much as possible. For the workloads that you need to keep on the premises, use infrastructure patterns that you know and can operate safely and securely at scale.

Technology road map

4. Initiating big-system-replacement programs: Are you focusing on system replacement rather than improving existing systems in a way that is faster and more cost-effective?

System-replacement projects are fundamentally complex, cost intensive, and inherently risky. They also distract the organization from building customer-centric capabilities and features in the short-to-medium term. Consequently, big-system-replacement projects should be avoided unless all other paths have proven not to be viable.

A major bank considered a core-banking-system replacement primarily because it was running an old Unix-based system on legacy hardware. But very quickly into the replacement project, the bank realized that its existing system was readily portable to new platforms, including public cloud. Additionally, updating the original monolithic code would entail substantially less cost, effort, and risk than replacing the entire system. Hence, after initial exploration, the bank chose to achieve the target business outcome by gradually modernizing the existing system at a fraction of the estimated big-system-replacement cost.

Recommendation: Before embarking on big-system replacement, ask the following:

• Can you incrementally improve the old system instead of replacing it?
• If you need to build a new system, will it deliver incremental value to your customers as it scales up over time?
• Can you gradually phase out the old system?