Data Modernization: A Short Overview

6 February 2020

Data modernization is one of the top technologies driving the IT revolution in many markets. Whether on the client or vendor side, this is the technology you’ll encounter quite frequently. On the vendor side, data modernization service providers, offer analytics and big data solutions. On the client-side, firms are doubling their data footprints every year. To reduce costs and increase flexibility, parties on the client end also need data modernization solutions such as AI and analytics algorithms. If you’re just getting started with digital transformation, a possible option, to begin with, is data modernization.

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In April 2019, Deloitte conducted a survey to find out what business leaders who work and make important IT decisions in some of the top companies in the US think about the data modernization.

All the companies selected for the survey had annual revenues above $500 million, with about two-thirds boasting more than $1 billion in annual revenues. Up to 46% of the respondents were C-level executives, 30% were head of business units, and the rest were managers and senior programmers. The findings were as follows.

First things first: What is data modernization?

Different leaders define data modernization differently. However, the majority agree that, at the most basic level, modernization involves moving data from legacy data mainframes to modern databases.

Data modernization can not only help organizations reduce infrastructure costs but has also proven vital in achieving greater flexibility and collaboration. The result is that organizations can curate and process disparate data streams to deliver real-time insight.

How popular is data modernization?

Very popular. In the Deloitte study, the vast majority of respondents said that their companies were in the process of implementing data modernization.

  • At least 84% of the companies had started modernization
  • Meanwhile, 34% had fully implemented their modernization initiatives

With regard to specific industries, finance, energy, and healthcare are the top performers. Of the 68 finance companies surveyed, only 3% hadn’t set the ball rolling on data modernization, with 32% having completed the modernization process. Ironically, technology, telecommunication, and media are the least likely companies to have started on the modernization path.

What are the key drivers for data modernization?

As you’d expect, companies adopt modernization for different reasons. The Deloitte survey, however, identifies four key adoption drivers;

  • Security and governance
  • Strategy and planning
  • Tools and technology
  • Talent acquisition

Security & governance was #1 by 44% and #1 or #2 by 65% of the respondents. Only 7% of the participants ranked talent acquisition as the #1 reason for data modernization.

What are the most prominent data modernization challenges?

The study found that only 62% of those in the process of implementing data modernization are confident that their modernization efforts will succeed.

The most common obstacle cited by respondents is budget/costs. At least 55% of the surveyed companies feel that cost is a major stumbling block to successful data modernization. Lack of understanding of the involved technologies is another key challenge, with 44% of companies lacking in this area. Other key challenges are;

  • Lack of consensus among decision-makers (41%)
  • Absence of clarity on success metrics (40%)

Although less than 48% of the companies have a clear strategy to overcome these challenges, it’s important to note that up to 96% have started or plan to start data modernization.

Let NIX Help

Unfortunately, there are no shortcuts to data modernization, however, it has to be carried out professionally and with a strategic plan. NIX can help. We have not only human capital but also the tools to implement it. Contact us today for a consultation.