As the latest Bain study discovered, there are 8 principal pillars which help form modern IT architectures. Each of these pillars requires that we take action to assure a modern IT architecture.
1- A multi-speed IT is not enough anymore: The entire IT-architecture must be lean and agile.
The so-called "two-track IT Organization" cannot be the goal of the evolution of the IT architecture. This is due to today’s rapidly changing customer requirements which demand short conversion cycles across the entire architecture. For this, an IT organization with multi-speed can accelerate the process. Companies with this system are in a position to act swiftly despite having a large number of legacy systems that are still running, thereby ensuring the connection to the digital competitors. The next step is for the legacy systems to follow and thus achieve a uniform high speed across the entire architecture.
Channels and end devices
2- Frictionless changes between the increasing number of channels and end devices will be independent
Customers experience digitalization via their end devices. All interactions take place there and are used for the production and presentation of information. By 2020, the number of possible terminal devices will grow explosively to around 35 billion. There are almost five devices per person - from laptops to the Dash Buttons. A modern IT architecture must support all these channels and devices equally, thus creating the legacy of tomorrow.
Already today, users expect seamless integrations whenever and wherever they interact with which device. To date, only a minority of companies have been able to ensure this omnipotential capability. According to the Bain study, this figure accounts for just 20 percent of the market, while the figure for banks is as high as 34 percent.
This may be explained as, over the past few years, credit institutions have invested heavily in order to recognize customers across all channels and provide them with accurate information. As a result, every other financial institution already sees a very good integration across all channels. In the retail it is only 18 percent. However, the changed customer behaviour has forced the banking system earlier than other industries to deal with mobile technologies.
3- Mobile first: When making decisions, mobile channels and end devices have priority.
The motto "Mobile first" has a very different place here. In many credit institutions, the design of customer interfaces is now oriented to the possibilities and limits of tablets and smartphones. Responsive design became a matter of course, the authentication by fingerprint within an app to a common procedure. The triumph of mobile channels is by no means confined to the customers. The importance of tablets and smartphones also increases internally, for example for service technicians or in consulting. But here, there is still a lot of catching up to be made, as so far the Omnichannel is so usually only accessible to customers.
4- Loosely coupled systems replace monoliths.
In view of the necessary innovation potential, especially in front-end applications, the still widespread, all-encompassing software solutions from the 1990s are increasingly reaching their limits. Implementation consumes too much time and money, and when they finally run, almost immediately, an expensive update is necessary. It is therefore not surprising that, according to the Bain study, 71 percent of companies are increasingly using loosely coupled systems. Only a third of the integrated systems still want to be retained in the market.
5- Usage of Microservices raises agility, stability and scalability.
The core of loose coupled systems are microservices, which means splitting complex applications into individual components. The advantages in terms of agility, scalability and availability are convincing across all industries. Currently, more than 25 percent use microservices. Over the next three years, IT managers see this share rising to 92 percent. Pioneers are insurance companies, while consumer goods manufacturers maintain a rather cautious approach.
While the number of small-scale microservices is growing rapidly, the complexity of the application landscape is reducing.
6- Software-as-a-Service accelerates innovation cycles and reduces implementation effort.
This trend will continue, supported by the advance of Software-as-a-Service (SaaS) concepts with their transparent provisioning and billing procedures. In the future the motto will be: What can be outsourced is outsourced - especially as SaaS usually speeds up innovation cycles significantly. As a result, the topic of lifecycle management for applications is gaining in importance.
Application and Development Platforms
7- The focus lies on strategically standard platforms for applications and developments.
As little complexity as possible, as much as necessary: this short denominator is the key decision-making criterion for application and development platforms within the framework of a modern IT architecture. Application platforms are increasingly becoming the hub for the integration of applications from different manufacturers and their own developments.
8- Flexible, scalable platforms as a backbone are combined with best-of-breed applications.
An increasing number of companies are therefore relying on a company-wide backbone, for example, a platform that includes enough standard applications and is open to new applications at the same time. This is necessary to stand out from the competition. A better integration capability therefore takes precedence over even more functionalities of a platform. The same applies to development platforms. You need to integrate a variety of tools smoothly.
9- Platform-as-a-Service concepts are becoming of increased usage.
As a result, Platform-as-a-Service (PaaS) solutions replace the previously customary internal solutions. The corresponding market will double by 2019 to a volume of 23 billion US dollars. With PaaS, organizations can dramatically increase efficiency in the development of new applications, while removing barriers to the use of agile methods. The US bank JPMorgan Chase began already in 2010 with the development with the migration to a PaaS solution, which supports the multiplicity of its .NET and Java applications. This was a forceful act within the IT architecture, but a decisive step towards a fully digitized bank. The development times were shortened significantly and the level of utilization of the platform increased. At the same time, 45% of infrastructure costs were saved.
10- The IT architecture must constantly create more demanding analysis with increasing data volume.
The data volume is currently increasing by 36 percent per year. Although the cost of storing it decreases by around 23 percent every twelve months, companies are faced with a 5 percent increase in cost per year. In addition to this, the growing flood of data is also becoming increasingly weaker. In addition to data warehouses, new constructs such as data lakes are required to process unstructured data and to efficiently analyze mass data from heterogeneous sources.
11- The huge amount of unstructured data requires new technologies and architecture like data lakes.
New technologies are needed to store and filter information from social media or from the Internet of Things. Hadoop is a good example. After all, 76 percent of the companies participating in the study already use the high-availability file system to store large amounts of data. However, large Hadoop installations are still running in batch mode. In order to get results quickly, many companies rely on hybrid big-data infrastructures that combine Hadoop and Cassandra / Spark as a fast "processing machine".
12- In-memory-technology accelerates data processing immensely.
In-memory technologies such as SAP Hana are also on the rise, with which structured, but also complex company data can be analyzed in real-time.
A modern, comprehensive data infrastructure is essential, in addition to loosely coupled systems and additional prerequisites, in order to be able to use efficiency potentials from artificial intelligence (machine learning) in the future.
13- Computing power is available anywhere and at any time.
In the future, computing power, such as electricity, is reliably and reliably transferred to every office and plant. This is particularly beneficial for the large public cloud providers such as Amazon and Google.
14- It is time to separate from own infrastructures.
Already, more than 60 percent of the students are using two or more providers of infrastructure. That Amazon with its web services in about two thirds of the companies is the most used cloud provider, is not surprising. Microsoft Azure and Google Cloud follow in the squares. The rapid growth of public cloud providers will continue in the coming years, as US companies are outsourcing their entire business. This is exactly what the streaming service Netflix, which claims today in peak times about 40 percent of the entire Internet bandwidth. In Europe, on the other hand, many companies will continue to host business-critical data on their own servers - or with vendors who store their data in Europe. This leaves enough room for a high growth dynamics of the public cloud.
15- Not business critical data help public cloud providers to grow quickly.
Three years ago, larger companies hardly dared to outsource essential IT components to the cloud. A good 85 percent of the work was done on either real or virtual servers. By 2018, this share is likely to drop to about 75 percent, and by 2023, according to US industry analysis, own computers are only a marginal role. The cloud is an infrastructure of the digital age, the era of its data centers is coming to an end.
16- The future belongs to automatically configurable infrastructures (Infrastructure-as-Code).
Regardless of the installation site of the servers, another trend will turn the infrastructure landscape: Infrastructure as Code and thus the possibility to configure computers automatically. The key reason for this is that changes can be made more quickly and easily if the infrastructure is treated like software, especially in the cloud. The number of manual and thus error-prone work steps decreases.
The beginning of the "cloud" of the infrastructure usually makes the consolidation of existing data centers. According to the Bain study, banks are the most advanced on this issue. But also the surveyed insurers and consumer goods manufacturers say that every second company is working to consolidate its infrastructure.
17- Systematic cyber-attacks threaten increasingly all the pillars of your IT architecture.
Cybersecurity is now one of the three most important topics on the agenda for most CIOs. Even in the event of a recession, hardly one would cut the budget at this point. For good reason: Since 2009, the number of attacks has increased by 66 per cent year by year. Quality has also changed. In the face of systematic industrial pioneering, not least through secret services, professionally acting criminal organizations and an upgrade to cyber warfare, no company can afford to invest heavily in IT security. The protection requirement does not end at the factory fence. A modern IT security strategy keeps all suppliers and recipients of important company data as well as the entire value chain in view.
This makes cybersecurity an integral part of any IT architecture. It is not about the protection of the infrastructure or individual applications, but about a holistic, comprehensive concept.
18- Security-as-a-Service is gaining more importance.
Cyber-risks are also a central component of risk management. Pioneers already regularly check their IT security from outside and use the latest tools internally. The service idea also turns out to be a trend here. Security as a Service (SECaaS) is on the rise - increasingly out of the cloud. Thanks to SECaaS, comprehensive security checks can be made before the potentially infected data reaches the corporate network. This is a tremendous advantage especially with regard to the daily email flood in companies.
19- Web based couplings replace clumsier Enterprise-Service-Bus approaches.
Without an efficient integration across the entire IT architecture, a companies modernization remains fragmentary. This is the only way to ensure the hoped-for seamless customer experience across the entire channel and ensure that all information is available to all users in a timely manner. The initial situation in the individual companies is very different, but there are some overarching trends. This includes the standardization of the tools as well as the departure from the traditional system integration with Enterprise-Service-Bus to a much slimmer integration using microservices, for example via message brokers. Here, there are numerous OpenSource products, among which companies can choose.
Cross-sectoral concerns are particularly given to a topic: the better integration of the legacy systems. They still control many core processes and still contain countless company-critical data. The better the systems of the last century harmonize with modern building blocks, the greater the possibilities for innovations and the less is the need for a re-start on the green field. Even old systems find their place in modern IT landscapes.
20- Best-of-breed networks from implementation partners shall replace the classic general contractor.
Companies need to build new competencies for the coming change. This is the only way to master the higher requirements and to control the integration proactively. They mainly need enterprise architects, sourcing specialists and strong program managers. Cooperation with external partners also requires new approaches. Gone are the days of awarding the entire value chain to a general contractor. Instead, more and more companies are looking for the best partners with specific know-how and special competencies, similar to individual technologies. Only with a dynamic partner network can the necessary flexibility be maintained. The basic idea of the best-of-breed is transferred from the architecture to the partners.
Do you want to know more about the newest trends, such as microservices? Check out our resources section!