How digital leaders tackle IT modernization

Companies with transformative digital strategies are well on their way to freeing themselves from the costly burden of legacy systems.

Recent IDC data shows that 76 percent of companies that are disruptors in their industries plan to replace legacy applications in the next five years, with almost half replacing legacy systems in the next 24 months. Many of them are doing so by moving functionality to the cloud.

Take Land O’Lakes, a $13 billion agricultural cooperative with 10,000 employees in 50 countries. Michael Macrie, senior vice president and CIO, is shedding his company’s legacy systems as fast as possible. [Note: In the time since he was interviewed for this story, Michael Macrie departed his role as CIO at Land O’Lakes, Inc.]

“You’ve got to have a solid strategy on where you’re moving to the cloud and why, what systems are most important to move and how quickly can you move them,” he says. “You’ve got to take a stand that says you’re going to be a cloud-first company and a SaaS-first company — which we did back in 2010. Then, when any upgrade or any major change comes to any of these systems, you ensure that you’re moving them closer to the cloud or into the cloud, with every step along the path. You have to stay true to that strategy.”

Even in the banking industry, with its well-known reliance on mainframe systems, digital strategy leaders are replacing legacy environments that require significant resources and manual workarounds.

“The first step is analyzing your IT portfolio, identifying the legacy systems and calculating the associated costs,” says Anil Cheriyan, executive vice president and CIO at Atlanta-based SunTrust Banks. “We’ve gone through what we call a ‘cost transparency exercise’ to understand which applications cost us more money. Then there’s a conversation with the business teams to identify which business processes are effective, which ones need to be replaced, the business value of the environment and whether the system is a hindrance.”

In Cheriyan’s view, the essential question is simple: “What is legacy preventing you from doing?”

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