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Innovate or stagnate: The modernisation imperative for telco companies

To maximise the advantages of modernisation, it's vital telco companies choose fit-for-purpose technologies, patterns and practices

In a crowded marketplace that serves increasingly demanding customers, telecommunications companies that remain tethered to the past risk quickly becoming irrelevant.

There is an immediate imperative to reevaluate legacy systems and upgrade outdated processes to stay competitive in this dynamic industry.

Expert insight: “Think of digital transformation less as a technology project to be finished than as a state of perpetual agility, always ready to evolve for whatever customers want next, and you’ll be pointed down the right path.”

Amit Zavery, VP and Head of Platform, Google Cloud
By the numbers:  - 46% of tech orgs planned to increase spending on application modernisation in 2023
- 50% of tech orgs planned to increase spending on cloud platforms in 2023
- 47% of tech orgs planned to decrease spending on legacy infrastructure and data technologies

Justifying the initial investment and manpower required to upgrade older technology that technically still operates correctly might seem like a hard sell, but the advantages of modernising outweigh the costs by far. 

To maximise the advantages of modernisation, it's vital telco companies choose fit-for-purpose technologies, patterns and practices. This is a key consideration, as it can be easy to fall into the trap of selecting the “hot” approach rather than the one that best suits an organisation’s unique requirements. Choosing the right partner to help along the modernisation journey ensures telco companies take the best approach.

A Gartner diagram displaying the three buisness and three IT drivers for application modernisation

Source: “How to Choose the Right Approach for Application Modernization and Cloud Migration”, GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

Indications that it’s time to modernise

Knowing when and how to upgrade can be a challenge. From a business perspective, the three main drivers for application modernisation are*: 

  • Business fit: The application no longer meets current business requirements. 

  • Innovation: The application constrains the business from leveraging new business opportunities or addressing disruptions. 

  • Agility: The application and its supporting ecosystems are not able to keep up with the pace of change, or those changes may come with an unacceptable level of cost and risk. 

From an IT perspective, the three main drivers for application modernisation are: 

  • Cost: The total cost of operating, maintaining and changing the application is too high in relation to its business value. 

  • Complexity: The high complexity of the application creates various problems and is a major factor in maintainability as it impacts time, cost and risk of implementing changes. 

  • Risk: The application poses security, compliance, supportability and scalability risks. 

In older application platforms and languages, the risk of a skills shortage can also be a concern. 

Organisations that recognise these indicators have the opportunity to change approach; partnering with an experienced team can drive the strategy and implementation of modernisation initiatives efficiently and effectively.

*Source: “How to Choose the Right Approach for Application Modernization and Cloud Migration”, GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

Keeping current in the telco industry

Telecommunications providers require a modern digital architecture to effectively provide customers their desired services, which drive revenue, and employees need support that can reduce cost

Emerging advancements such as 5G networks are providing opportunities to leverage the increased speed and bandwidth to generate new revenue streams. With approximately 100 times the speed and 1000 times the capacity of 4G, telcos with 5G capability can go beyond the standard B2C subscription model. In this “business-to-business-to-X” (B2B2X) model, telcos can provide connectivity to another company, that then provides it to public or private customers of their own. And as adoption of 5G devices grows, additional new business opportunities such as direct to cell satellite service are likely to emerge that could disrupt the cellphone market.

Network security is another critical area for telco providers . The ever-growing threat landscape necessitates robust cybersecurity measures that protect networks from cyberattacks and data breaches. The smaller, segmented networks that comprise modern systems provide greater security than monolithic older networks by dispersing data risk, and keep networks safer with AI-powered applications around access requests.

As with all systems that collect, store, share and analyse huge amounts of data, the backbone of modernisation for telcos is migration to cloud-based infrastructure. In addition to enabling easier data collection and sharing, being cloud-first provides greater scalability, flexibility, and cost-efficiency by XXX.

Nearform expert insight:  “The answer to the question “What is modernisation?” can have different answers depending on who you ask. It’s certainly not a “one size fits all” process. In defining the answer for a specific organisation, one key to success is to have a methodology for aggregating responses from various perspectives in order to form a strategy that addresses all key considerations. For example, business stakeholders may consider business results, pain points and costs, while technical leaders will focus on specific tools and technologies.”

Shaun Anderson, Field CTO, Nearform

Digital modernisation includes business stakeholders

Modernising systems and processes doesn’t necessarily mean starting from scratch; it’s about reducing friction by leveraging available technologies and expertise. When many organisations decide to undertake a modernisation initiative, they start by focusing on the software: decoupling legacy systems and employing code refactoring through code conversion tools.

The problem with starting this way is, no one has determined how the system “wants to behave”, meaning that they haven’t defined its purpose, logic, and the business capabilities that it needs to meet. Without this key information, a project may stagnate, and/or become a complex monolith. Most likely, the code wasn’t the problem in the first place, and now there are two things to modernise.

The first step in modernisation should be to identify a partner with the ability to understand the desired impact and deliver efficient, cost-effective solutions that drive results. Additionally, they must have the experience to mitigate risk by identifying and avoiding potential challenges and pitfalls.  

Nearform, for example, begins with a holistic approach that looks at code, data, infrastructure, people, skills, etc., all through a business lens. With this perspective, it’s possible to achieve exponential benefits through the modernisation process, instead of the limited incremental benefits achieved by starting with software only. 

Nearform’s custom methodology, the “Swift Method”, can help customers navigate the complexity and risk presented by modernisation programs. This starts with the Accelerator phase, which involves Nearform bringing stakeholders from both the business and technology side together. During this process, the goals are to: 

  • Take a deep dive into the current technology and process system to create a holistic understanding of the entire business as well as the end customers/users, 

  • Understand how the system wants to behave,

  • Create a model that illustrates the desired final product. 

From there, a process of continuous modernisation commences - and in doing so enables a more rapid path to value.

Utilising AI to maximise the efficiency and minimise the risk of modernisation 

During the modernisation process, applications that employ artificial intelligence can assess legacy applications, identify improvement opportunities, and identify seams that can be eliminated, or where code can be inserted if needed. 

Additional advantages of engaging AI applications throughout the modernisation process include the ability to iterate more rapidly, develop in parallel with decoupled services, scale on demand, and provide assurance that updated applications conform to best practices for coding and design. 

The fact that AI tools can assist in the modernisation process itself is perhaps one of the best arguments in favour of upgrading.

Getting started doesn’t have to be daunting 

There’s no denying that modernising an outdated system is a significant undertaking. As with any large-scale project, there will be many stakeholders with diverse ideas and opinions, and very real time and resources required for, even dedicated to, the execution itself.

Collaborating with an experienced partner with a track record of success can mitigate risks and minimise unnecessary costs throughout the process, cutting through competing priorities and bringing an independent perspective to identify a path that achieves all key objectives. In some cases the path will likely include not only transformation of digital needs, but also business processes and team structures, which can also be addressed through a targeted approach such as the SWIFT method. With deep understanding and a pattern of success, a digital partner can identify new opportunities to drive greater efficiencies and increase the ROI of a modernisation investment.

Insight, imagination and expertly engineered solutions to accelerate and sustain progress.