Do you know the word “modernization”? To put it simply, modernization is a series of efforts to renovate a company’s IT system and prepare a business system that suits the present age.
IT systems used by domestic companies are often so-called legacy, and if left unrenovated, “business execution will be inefficient” and “know-how sharing regarding operation and management will be difficult”. There will be disadvantages.
To promote DX (organizational digital reform) in the future, it is indispensable to carry out modernization.
What does modernization mean this time? How can I carry out modernization? I will explain in detail such a question.
Table of contents
- 1. What does “modernization” mean?
- 2. Why modernization is so important in modern times
- 3. What is the difference between modernization and migration?
- 4. What are the methods of modernization?
- 5. What are the specific steps to implement modernization?
- 6. Can modernization be outsourced to an outside company?
What does “modernization” mean?
If you are familiar with English, you may find that modernization is related to the word “modern”. As the name implies, modernization means “modernization” or “modernization.” In business, it means “updating the infrastructure” such as IT systems and devices used in business. Keep in mind that it is sometimes called “IT modernization” because it is used especially in the IT field.
IT systems used in business, such as core systems and business management systems, are
- software
- hardware
- Accumulated data
Each element such as is working in cooperation. The point of modernization is to update the system contents while utilizing the above factors and make adjustments to suit the business.
Why modernization is so important in modern times
Did you know that the Ministry of Economy, Trade, and Industry has gathered experts to hold a meeting and published a report entitled ” DX Report-Overcoming the IT System” Cliff in 2025 “and Full-scale Deployment of DX- “? To briefly summarize the contents of the report, “If a company cannot realize DX conversion including system renewal by 2025, an economic loss of up to 12 trillion yen will occur in Japan.”
As mentioned at the beginning, DX is the digital transformation of the organization, but the existing IT system is a major obstacle to the DX conversion of this company. IT systems become less suitable for business as time goes by after the release. For example,
- System contents and data are divided for each business division
- Makeshift system refurbishment makes system operation difficult for non-specific members
- Extra code is being executed and the system is slowing down
If you continue to operate the system while having such disadvantages, not only will the operability slow down and your business will become inefficient, but you will also carry the risk of leaving security holes unattended. If you have software or equipment that your company has been using for many years, we recommend that you consider modernization and move to a modern system. By modernizing the system by each company, DX conversion will be promoted, and the possibility of avoiding the “cliff of 2025” will increase.
What is the difference between modernization and migration?
- Modernization: Create a new system while diverting the IT assets of the existing system
- Migration: Reproduce the existing system structure with a new system
An initiative that is often confused with modernization is “migration.”
Migration means “migration,” and in business, it represents an effort to migrate an existing system to a new one. This sounds like modernization, but be aware that modernization and migration have different approaches to the system.
In modernization, we will create a new system while diverting the IT assets of the existing system. On the other hand, in the case of migration, instead of modifying the system structure, we will migrate the data to it while reproducing the existing system structure on another system.
Therefore, it is possible to use the system by “using the existing system and the system created by migration together”. Migration, also known as “legacy migration,” has been undertaken by businesses even before modernization was called for.
However, it is often the case that the system becomes legacy again some time after migration. Stay alert just because you’ve been migrating before, and modernize if necessary to break away from legacy. You can read more about this legacy system and migration on the following pages.
■ What is a legacy system? Benefits of migration and openness
What are the methods of modernization?
| The main methods of modernization | |
|---|---|
| Method | Overview |
| Document | How to document and visualize system information collected from stakeholders |
| Refactor | How to optimize the internal structure of the system to accommodate the current situation |
| Rehost | How to migrate only the platform hardware |
| rewrite | How to revamp the development language (base code) of IT systems |
| replace | How to migrate from an existing system to new packaged software |
There are the above methods for modernization. Since the characteristics are different, we will introduce the differences between them.
● Document
The document is a technique that can be used when you want to share the know-how of an existing system within the company. It refers to a method of collecting information such as basic specifications and construction methods of IT systems from related parties and documenting and visualizing them. It doesn’t change the IT system, so it’s easier to implement than other methods. In addition, by sharing the document contents among the parties concerned, it is also an advantage to prevent the situation where only the specified members know the outline and operation method of the system.
However, the disadvantage is that the risk of legacy remains as it is because the existing system is not modified. Also, be aware that the system content is already difficult to understand in the first place, and documentation may not proceed well.
● Refactor
Refactoring is also known as “refactoring.” It refers to approaching the application code and optimizing the internal structure for the current situation. Refactoring has the advantage of eliminating unnecessary code reading, organizing the code content, and renewing it so that anyone can easily understand it.
Instead, it doesn’t involve work such as eliminating code glitches or adding features, so it’s not a good technique if your code content has become legacy and has more flaws. The refactor is to simplify the internal structure without changing the behavior of the system.
● Rehost
The act of constructing the basic infrastructure of an IT system such as an OS in a new environment and migrating elements such as applications and data to another environment is called “rehosting”. It is attractive that it can be executed speedily because it creates an open environment and migrates without much modification to the existing system. However, since the existing system remains, there is a risk that the flexibility of the system will be reduced and the effect of improving work efficiency will be limited.
● Rewrite
It is a method to modify the development language (base code) of the IT system. Specifically, the point is to move the language of the existing system to a new development language while utilizing code conversion software, etc., and renew the language structure to make it easier to use.
By converting the old programming language to the new language, you can get the effects of improving security and speeding up the operation.
However, this method also inherits the basic structure of the legacy system as it is, so even if the programming language is renewed, the structure itself is not necessarily optimized. In addition, it requires skilled personnel who are familiar with fields such as programming languages.
● Replacement
Replacing an existing system with new packaged software is a method that can be used to fundamentally review the business structure and promote DX conversion. Since the system is not only newly constructed but also migrated while putting a scalpel into the business structure itself, there is an advantage that the system can be utilized to the maximum while optimizing the business process. On the other hand, the disadvantage is that it is costly and time-consuming because it is necessary to radically change the assets of the IT system and the business process itself. There is also the risk of receiving backlash from the field due to major changes.
What are the specific steps to implement modernization?
From here, we will introduce the flow of modernization for companies that are considering modernization.
- Determine what to modernize
- Weigh the replacement system
- Calculate the budget, personnel, etc. required to implement modernization
Specifically, we will do it in these three steps. Let’s take a closer look.
● Determine the target for modernization
There are various targets for modernization, such as business systems and core systems. For example, a policy such as “The existing system is becoming more legacy and the structure must be reviewed, but only measures such as refactoring and documenting” will not solve the problem. After organizing what kind of issues your company has, it is necessary to clearly define what should be modernized.
Methods such as renewing only a part of the business system or radically reviewing the core system itself to reform the business can be considered. The wider the target, the longer it will take to work, but the greater the effect you will get.
However, the difficulty of modernization also depends on how the program is organized. The more parts of your company’s original structure, the easier it will be to work, so please understand the system requirements and calmly carry out modernization so that trouble does not occur.
● Compare and examine the replacement system
Next, we will compare and examine the replacement system. For example, if you want to open an existing system and reproduce it, we recommend a cloud system. In terms of cost, cloud systems can be easily introduced even by small and medium-sized enterprises, and members can easily share data while working, which is useful for promoting telework.
However, it is also true that voices are saying, “There are concerns about security in cloud systems …”. It costs more than the cloud if you place importance on performing business while ensuring security, but it is also good to build a system on-premises. Regardless of which system is introduced, the focus will be on “whether it is possible to achieve higher operational efficiency and cost reduction compared to the current system.” Remember the purpose of modernization and compare and consider the appropriate system.
● Calculate the budget and personnel required to implement modernization
After the target of modernization and the introduction, the system is decided, we will make a detailed plan. Since the company’s resources are limited, it is necessary to manage it so that modernization can be performed within a reasonable range.
- How to proceed with modernization
- How much budget do you need for overall modernization?
- What kind of personnel need to be involved in the work
It is safe to make a plan from such a viewpoint. As for the procedure, there is a flow such as taking the plunge and renewing all the target systems at the same time or gradually renewing at a small start. Choose a method that allows you to smoothly modernize your company. In addition, budget management is also important. If you run out of budget, you run the risk of failing to carry out modernization as planned. Depending on the scale of implementation, it will be necessary to explain to the management the specific merits of modernization from the viewpoint of cost and operational efficiency, and to obtain cooperation.
When deciding on personnel, consider the work scale of your work. If the business process itself changes significantly, it will take time for superiors and management to persuade them so that there will be no backlash from the field.
Can modernization be outsourced to an outside company?
Many system development companies are not only responsible for the development of business systems and core systems, but also introduction support.
- There is no engineer responsible for modernization
- I’m new to modernization and I don’t have the know-how
In such a case, it is also a good idea to make an in-house production and make an external request without performing modernization. At Japan’s largest system development company portal site ” Order Navi “, experts with abundant achievements will thoroughly support you in selecting the most suitable development company. If you are a person in charge of a company who is considering implementing modernization, why not consider using it?
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