“One of the things we’re trying to do is create a set of software that we
can use on a global basis. That’s going to require retiring some legacy
components.” —Mike Kirschner, Vice President of IT, Office Depot
have integrations, you want to figure out how to best support
those integrations in a reliable, secure, and scalable fashion,” he
says. “We think service-oriented architecture is a good pattern
to use for those integrations.”
them forward. But we know that at some point, these systems
are going to cause problems.”
MODERNIZATION CHALLENGES
If the whole modernization process sounds complex, that’s
because it can be. Inadequate assessments of application portfolios, lack
of employee adoption of new systems,
unsuccessful integrations, or even a
simple drying up of funding can all negatively impact modernization projects.
And even successful modernization projects require substantial investment.
But in almost every case, efforts to
avoid or postpone the effort of modernization will come back to bite IT management. The risks of not modernizing are
significant. Aging legacy technologies
are expensive to operate and maintain,
draining IT departments of precious
dollars that could be spent on systems
that help generate additional revenue.
Their complex design based on legacy
concepts makes it difficult to implement
changes, thus increasing the challenge of
responding to shifts in the market, and
they require skills that are in short supply
as the programmers with knowledge of
languages and systems such as Natural,
COBOL, Virtual Storage Access Method
(VSAM), and PowerBuilder approach
retirement. Furthermore, legacy systems
typically don’t track business processes
well enough to satisfy the compliance
requirements of today’s rigorous regulatory
landscape, a limitation that could put a company’s executives
in serious jeopardy.
Even so, many companies allow fear of the unknown to
prevent them from proactively diving into modernizing systems
that, admittedly, are still doing the job. What they fail to grasp is
that they’re just trading in one type of pain for another, potentially worse alternative.
“There is an inherent cost of doing nothing,” says Lance
Knowlton, vice president of modernization solutions at Oracle.
“Many customers look at their legacy environment and are in a
state of denial. The systems haven’t fallen down, and they know
that it can be expensive for them to take the systems and move
GETTING OPEN
Take, for example, the insurance industry, where the mount-
ing challenges posed by legacy environments made the need to
modernize apparent several years ago. Many insurance compa-
nies began looking for packaged applica-
tions to replace core legacy systems that
handled claims processing, but their
searches failed to identify anything that
met their needs, so they stopped looking.
“Five, seven, eight years later, their
applications have declined, and they’re
back to thinking, ‘Now I need to go
ahead and do something about them,
but now I’m eight years closer to the
retirement of all of the skill sets that I’ve
got,’” says Dale Vecchio, research vice
president, Gartner.
That is precisely the scenario that
Oracle—with the help of a bevy of partners such as Accenture, CSC, EDS, HP,
Perot Systems, and Unisys—is trying
to prevent. While Microsoft tries to
convince large companies to move to
its .NET architecture and IBM attempts
to keep its customers on its proprietary
mainframe platform, Oracle has opted to
help customers formulate a strategy for
getting from point A to point B. In other
words, as long as customers take the
initial step of migrating to open architectures, there will be opportunities to
promote a whole universe of standards-based applications, middleware, and
supporting infrastructures.
That approach has been packaged in a no-cost service
dubbed Oracle Modernization Insight, in which a team of Oracle
modernization experts works with a customer to formulate a
realistic strategy for establishing a standards-based,
process-driven SOA environment and determine a road map
to get there. Naturally, in its role as modernization consultant,
Oracle educates customers on its applications and technology
stack for implementing modernized applications—from its suite
of service-enabled applications to Oracle Fusion Middleware,
Oracle Database, and third-party hot-pluggable SOA-based products—and makes sure they understand that the Oracle products
can support even the most demanding business processes.
>>SNAPSHOTS
Office Depot
www.officedepot.com
Location: Delray Beach, Florida
Employees: 52,000
Annual revenue: US$15.4 billion
Oracle products: Oracle
E-Business Suite, PeopleSoft Enter-
prise Human Capital Management,
Hyperion Financial Management—
System 9, Hyperion Planning—
System 9
Württembergische Gemeinde-
Versicherungsverein (WGV) AG
Informatik und Media Gmbh
www.wgv-online.de
Location: Stuttgart, Germany
Employees: 800
Annual revenue: €511 million
Oracle products: Oracle9i
Database, Oracle JDeveloper,
Oracle Application Development
Framework, Oracle Forms, Oracle
Reports, Oracle Enterprise Manager
Other products: HP-UX UNIX
operating system, customized HP
data warehouse
