This article attempts to introduce the concept of “technology refresh,” the forces that drive technology refresh and how an organization should approach technology refresh.
Technology refresh refers to the adoption of newer technology to meet changing needs or to mitigate the risk of obsolescence of existing technology. The term “technology refresh” is more widely used when enterprises replace one-third to one-quarter of their Information Technology (IT) assets (desktops, laptops and other end-user computing devices and servers) each year on a rolling basis. As Information Technology changes from a backend support entity to a strategic enabler, the role of technology refresh becomes important and in recent years, technology refresh has seen an expansion of its scope, going beyond just IT assets to all kinds of items that may form part of the IT landscape. However, this article’s scope of technology refresh covers only the areas of IT (Hardware, Software, Facilities, Processes and skill sets).
The key drivers for technology refresh are:
Organizations worldwide are stuck with aging technologies and find themselves in a very difficult situation. Many of them do not have a proactive approach to regular technology assessment; it is always taken granted that as long as the existing technology is meeting its stated purpose it is good to go. Over time, these legacy technologies get heavily customized to meet the user demands. Each change makes it more complex and rigid for future migration to a newer technology.
As organizations continue to use dated technology, they often land in situations where they are stuck with out-of-support technology components. This happens due to the product vendor upgrading its technology stack and subsequently not supporting the older versions in an effort to migrate all their customers to their supported stack.
Skill set shortage
As technology advancements continue, the focus keeps shifting to the newer breed of technologies. Even the academia focuses on the newer technologies than the legacy technologies. This slowly causes a skill set shortage as the people who know the legacy technology become lesser in number and getting skilled resources becomes an issue.
Regulatory compliance is mandatory for all organizations. With physical boundaries diminishing and access to information becoming easy, the chances of security breaches are also increasing. This forces organizations to develop controls and procedures which will prevent any security leak and will ensure all the established controls are in place to fulfil compliance. As the technology component enters into a phase of obsolescence and the existing vendors stop supporting it, these components become vulnerable to compliance requirements.
Organizations think “technology refresh” decisions are “high investment” items. On the contrary technology refresh helps in reducing the operational spend and enhances the organization capability, which in turn helps to lower the unit cost of IT. With the passage of time, legacy technology becomes expensive on account of its maintenance cost.
In today’s business environment, mergers, acquisitions and consolidation have become the mantra for growth. Mergers and Acquisitions often bring together diverse technology components which the new organization has to manage and decide what the future strategic platform will be. Organizations start considering standardization of diverse technology components into strategic ones and look at technology refresh as a way to achieve their standardization goals.
Organizations scan the technology environment constantly to evaluate the marketplace for the innovations and development happening in an effort to improve their competitive positions. As they find newer technologies which can provide better competitive advantage, they start considering “technology refresh” as a strategy to migrate to newer technologies.
Vendor stability is one of the key factors which drive “technology refresh” considerations. Organizations always want to use products from vendors who have good market standing and are stable. If the vendor stability becomes an issue then it affects their ability to invest and grow the products that they have which in turn creates issues with competitiveness.
How do companies handle it today?
Today “technology refresh” is managed in a reactive manner. Organizations treat these investments as capital expenditure and, based on their performance, earmark a certain percentage of their IT budget for their “technology refresh” initiative.
In most of the enterprises, the time for “technology refresh” is rather long because of the processes involved, and in a dynamic marketplace, such a system is unlikely to deliver desired results.
Approach for Managing Technology Refresh
Most clients we have worked with and continue to serve are familiar with the need for “technology refresh,” but they are hesitant to grapple with the issue at hand. So, we suggest the following 5D approach for managing the technology refresh at enterprise level:
Determine: This is the first step to determine the transformation imperative and through this process, we proactively create the technology awareness, build intelligence, understand the current situation and develop the overall technology strategy which underpins the technology refresh strategy.
Design: This involves setting up the vision and objective for the “technology refresh” program and the key deliverables from the design is the technology refresh strategy.
Develop: This involves developing a solution roadmap for the “technology refresh” program. Depending on the risk appetite and maturity of the technology component being deployed, organizations often go with a pilot exercise by implementing the solution for a specified subset of the refresh candidates. This helps in identifying the issues, validating the workability of the solution.
Deploy: This involves implementing the solution that has been developed for the technology refresh program. There are different rollout options and organization may choose one or a combination of more than one as per their need. Some of the key rollout or cutover options being Big Bang, Long Bang, Big Bang with Parallel Run, Incremental, Event Driven Cutover and Phased functional cutover with Parallel Run.
Deliver: This involves seeing the results and measurement of the benefits. Once the upgraded or new technology components are rolled out, the old technology components should get decommissioned in a phased manner. This is critical for the organization; the presence of the old components will delay the benefit realization. Technology refresh is not a one-off activity. Rather it is a cyclical process and the organization should constantly capture the feedback and feed it into the technology strategy so that new learning are captured and used for improvements.
The way forward
This article has aimed at providing a conceptual understanding on technology refresh and building an integrated approach towards an enterprise level technology refresh program.
Overall benefits gained from a technology refresh program include:
Agile IT Infrastructure
Supported technology components
No risk to compliance
Improves time to market capability
Improves scalability and maintainability
Reduction in OPEX for the IT
Helps in standardization
Helps in improving the overall IT capability
Listed below is some suggestions to avoid the technology obsolescence trap:
Put IT strategic planning at the heart of the CIO management agenda