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The business benefit for large enterprise organizations migrating to the Cloud is the modernization of their legacy applications
Sep. 15, 2017 03:15 PM
Legacy to Cloud Transformation: From Monolith to Microservices
The most powerful business benefit for large enterprise organizations migrating to the Cloud is the modernization of their legacy applications. This presents the biggest hurdle to overcome to achieve their Digital Transformation goals.
As Gartner described Canadian CIO’s face a scenario where there is lower buy in to the value of technology and thus a perception it is more of an operational cost not a strategic enabler, the biggest consequence being a lack of investment in upgrades and modernization, vs ‘keeping the lights on’.
The Royal Bank of Canada’s CEO noted that the issue presents the most signficant of digital transformation challenges, far more so than the threat of FinTech startups:
For example in the Government sector elderly systems like COBOL are still prevalent, indeed in the USA they account for 70% of IT spend, and cost the government nearly $40 billion a year to maintain. This is why they aren’t investing as much in new innovation-enabling technologies like Cloud as they might.
In Oct 15 the UK Authority web site reported that the National Audit Office said the public sector is still struggling to master and realize the potential of digital transformation, despite the citizen and cost benefits it’s known to deliver.
They also identified legacy applications as the root cause of this lack of progress in all of these areas, reporting that over £480 billion of government revenues were reliant on them highlighting the many risks this presents, most notably resistance to the new digital innovations governments are required to adopt to achieve new online services:
In their audit they review a sample of government department situations and their legacy application challenges – the DWP Pension Service, HMRC VAT Collection, NHS Prescription Payment Service and the OFTs Consumer Credit Licencing Service.
These scenarios feature a variety of aged technologies, some originating as far back as 1973 running on a mainframe computer. The HMRC identified in 2009 that their 600 systems were “complex, ageing and costly”, and the report highlights how expensive a burden this is: The VAT collection service costs £430 million per annum to operate, and the DWP’s Pension Payment service £385 million per annum. That’s almost a billion pounds a year just for two applications.
Different options for addressing the situations are explored – ‘No Change’, ‘Enhance and Maintain’ and ‘Replace’ approaches, detailed in these in-depth case studies.
Similarly the Canadian Government audit office also identified their estate of legacy applications presented considerable risks of revenue-collecting downtime, and also inhibited the development of modern, online systems.
Legacy IT – Risks
Inhibiting Business Transformation
The remaining four risks of legacy systems that were identified directly inhibits an agencies ability to achieve their Digital Transformation goals.
In short the difficulty of updating legacy applications prevents implementation of new digital government features. The report describes “Legacy ICT is harder to adapt to meet changing business needs. We found that where an organisation has replaced its legacy ICT system, adaptability has increased.”
One of the approaches, ‘Enhance and Maintain’, is based on keeping the legacy application and creating new interfaces to it such as mobile or web access, described as “wrappers”. However this does not address the core limitations of the legacy technology.
For example although the VAT system has been considerably updated via this approach, it’s still not a fully digital service as customers are unable to view their accounts in real-time, and HMRC has found it challenging achieving a ‘whole customer’ view, as its customer data is stored across a number of legacy ICT systems.
Other key limitations include the ‘batch processing’ approach of older platforms.
“Business transformation, including the drive for digital transformation is proving challenging for departments when it involves legacy ICT. Many legacy systems require data to be processed as a sequence of batches that is incompatible with a fully real-time digital service. In the pension system, for example, online applications have to be manually re-entered into the main system by a DWP operator, as the website and the main legacy ICT system are not integrated. The approach of adding functionality through the addition of interfaces to the core legacy ICT is likely to be insufficient to achieve full digital transformation.”
Additional processes are required due to the limited adaptability of systems using batch processing. The VAT return error correction process is a typical example of such manual intervention. VAT returns submitted online are only partially validated and corrected as they are entered. Full validation, risk identification and correction can only be done after the overnight batch is run. At that stage errors are picked up by the error correction team and addressed manually. This is typical functionality for the technology design of that era. Validating, and identifying more errors, at the point of submission would lead to greater efficiencies.
HMRC had exception processes like this which represented 20% of costs.
Furthermore increased complexity caused by additional interfaces and connections with other systems makes routine changes to legacy ICT costly and protracted. The existing complexity of DWP’s pension legacy system means changes take up to 18 months from planning to deployment.
Cloud Transformation: Migration and Modernization
A cloud migration project can be a relatively simple exercise, where applications are migrated ‘as is’, to gain benefits such as elastic capacity and utility pricing, but without making any changes to the application architecture, software development methods or business processes it is used for.
There may be a clear business for doing so, such as the hardware platform becoming obsolete; however the organisation overall won’t realise any additional benefits – there is no business transformation as part of this move.
Legacy modernization best practices can address these issues, delivering business benefits including:
Architecture Driven Modernization
As the ADM ‘horseshoe’ model articulates, and this Carnegie Mellon article shows, a migration project can be considered with three distinct tiers of scope possible, increasing the size and length of the project with an increasing level of associated business benefit.
1) (T)echnical Architecture, for technical reasons the underlying IT pieces are moved around but the software itself or the business model doesn’t change , 2) re-engineering the software architecture (A)pplication Architecture, through to 3) a full reinvention of the whole organization and business model (B)usiness Architecture.
Moving to Cloud can actually represent activity on all three fronts:
As the horseshoe describes, these increases in scope mean a larger project that takes longer, because each is delivering a larger scope of business benefits, impacting a larger group of stakeholders and requiring a larger business transformation exercise, such as:
Modernization would enable government agencies to eliminate unnecessary, non standard and obsolete technologies, a huge cost they endure, and financial benefits would expand even further when business process improvements are also acheived.
A Standish Group study found that less than 30% of the code in a given application contains business logic, meaning that the bulk of the costs are tied up purely in maintaining the proprietary hardware, and an IBM Systems Journal reported that as much as 60-80% of the functionality in application silos may be redundant or duplicated in other silos. All of these inefficiencies can be flushed out and eliminated by consolidation through a fully scoped Cloud Transformation project.
From Monolith to Microservices
Breaking innovation gridlock
Although moving to IaaS can deliver benefits such as elastic capacity and utility pricing for infrastructure level components, this isn’t really of strategic value to most large organisations as they aren’t constrained in these areas.
Instead where the major business value will come from is modernising this legacy environment, transforming the core enterprise applications to new cloud-centric approaches so that innovation gridlock is broken and a faster cycle of development throughput is achieved.
A variety of tools are available that can automate the process of transforming legacy code like COBOL into their modern equivalents on Java and .net, meaning they can be re-deployed to private or public Cloud services and most importantly, then much more easily modified by software developers, setting the scene for an agile Enterprise DevOps culture and faster change cycle achieved through Continuous Deployment practices.
Furthermore leading edge Cloud architecture principles can also be utilized, such as ‘Microservices’. This means breaking up large monolith software, like mainframe systems, into an array of small self-contained services making it even easier to implement change at a faster pace.
This presentation from Linkedin offers a detailed case study, describing their approach for exactly this scenario – From a Monolith to Microservices + REST:
From a Monolith to Microservices + REST: the Evolution of LinkedIn's Service Architecture from C4Media
This combination formed their particular ‘Microservices Recipe’, and when you consider the role social graphs play across the Linkedin environment, how our business contacts are inter-connected and we dynamically explore our way through them, you can see how it would be an ideal design for this type of web site.
Others offer very practical permutations. For example in this article Flickr describe how you can utilize Github to operate a ‘Microservices Store’.
This is a great idea when you consider Github can provide the foundation for a complete DevOps toolchain, augmented in many ways such as adding apps to support Agile practices.
Similarly Sensedia propose a recipe for Legacy Modernization that defines how microservices can be utilized as an API enablement strategy.
Chandra Rajasekharaiah, Enterprise Solutions Architect at Macy’s, published this excellent deep dive analysis of the Monolith to Microservices transformation and the software engineering challenges it presents, and Anil Madan, VP of Engineering at Intuit also describes the same journey encompassing a broader perspective of platforms and organizations.
Finally on this note and to close the loop back to Architecture Driven Modernization this OMG presentation from Dr. Giovanni Traverso of Huawei is highly recommended.
This describes the process within an overall context of Omnichannel Digital Transformation and the role Business Architecture can play in planning and managing this exercise.
Specifically on slide 15 Giovanni highlights how to ‘Preserve legacy investments with an incremental capability approach through microservices on PaaS’, defining the BA framework for the approach that Sensidia described.
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