Sumit Johar has been modernizing BlackLine’s IT environment since becoming CIO of the software company in early 2024.
As a longtime IT leader, Johar has plenty of experience overhauling tech stacks, but he says the work has taken on new meaning — and urgency — in the AI era.
“The definition of modernization has literally switched in the last two to three years,” he says. “Suddenly everything that you built in the last few years looks like legacy, because the SaaS model, which we have been using for the last 10 to 15 years, there is an opportunity now to totally change that and modernize with AI and for AI.”
Johar is doing just that, surveying the company’s SaaS portfolio, particularly zeroing in on point solutions, asking whether each is worth the cost, whether it delivers true business value, or whether IT can use AI to build a service better suited to his company’s needs.
At the same time, AI is changing how workers interact with technology, he says, enabling people to query applications via natural language and chat, which has his IT team considering which applications may need to be modernized or abandoned altogether as a result.
Take, for example, dashboards. “We built dashboards because there was no other or better way to report on your data,” he says. “Now I can simply ask a question and get an answer, which is what I was interested in anyways. So if I have my ERP and CRM talk to me in a human language, I’m happy with that. That’s modernization.”
As a result, he adds, “some of us might be getting rid of [our dashboards], and some might be slowly reducing the dashboarding tools we have.”
As organizations remake and automate workflows with AI, software that enables those workflows could meet a similar fate, Johar says.
Even chatbot-building products that IT implemented a few years ago are prime targets for rationalization due to AI advances, he adds. “I still need chatbots, but I don’t think I need specialized software to build a chatbot anymore. Any generic AI platform that I have will give me the ability to basically build them,” he explains.
High-priority tasks
For Johar, the longstanding CIO tasks of modernization and rationalization remain make-or-break activities for IT.
Johar and other IT leaders see modernization and rationalization as vital to controlling IT spend — as high of a priority for CIOs as it’s ever been, freeing up dollars for innovation (the No. 1 objective for nearly every IT leader and their CEO’s top priority).
IT leaders also see modernization helping them create a future-ready IT environment, one that’s not encumbered by legacy technologies and complexities that don’t play nice with emerging technologies.
“CIOs don’t have much of a choice than to continue modernization; they’re in a perpetual state of modernization,” says Amar Aswatha, senior vice president for global business engineering at CGI, a consulting and services firm. “They’re trying to simplify yesterday’s tech state while creating resilience and the right environment for AI and to be ready for whatever will emerge.”
Other factors also drive the need for ongoing modernization, Aswatha notes. The rapid pace of innovation is reducing the shelf life of many technologies more quickly, necessitating more rapid overhaul cycles than in the past. Meanwhile, the past decade’s mass migration to the cloud has meant that CIOs “traded server sprawl for subscription sprawl,” he says. The rush to adopt AI is having a similar effect, leading to AI and agent sprawl — and the need for new and more widespread rationalization and modernization strategies.
Still, CIOs must be more surgical than they’ve been in the past, using a scalpel not an ax to shed legacy technology and simplify IT environments, Aswatha advises.
That means accounting for both current and emerging business needs when determining what systems should be modernized — not simply relying on age or other such non-business-related factors. And IT leaders can’t see rationalization as an exercise in reducing application count to a set number; unnecessary complexity should instead be the target.
Such approaches require CIOs and their teams to understand current and future business needs, as well as how those needs, and the organization’s overarching strategy, shift over time, Aswatha says.
“CIOs have to watch for business signals on when and what to modernize and rationalize. It’s not about spring cleaning, it’s about what apps are slowing the business down,” he advises.
‘Best for the organization’
Rachelle Putnam, vice president and CIO of General Dynamics Land Systems, which manufactures military vehicles, is taking such an approach.
Putnam, who has led IT at the company since 2014 and managed a move off a mainframe about a decade ago, says modernization today means asking whether existing technology “allows us to have the flexibility and the functionality we need.”
Like many CIOs not on IT’s bleeding edge, for Putnam savvy modernization is about strategy, not technology. “Some might say we’re not on a modern tool set, but that doesn’t mean we don’t have the functionality we need,” she says.
For example, Putnam embraces a cloud-smart strategy, modernizing on the cloud where it makes sense and on-prem when that’s the better or required option based on government regulations.
She applies a similar lens to rationalization, asking whether any given application uniquely fulfills a business need or whether other apps in the portfolio can do the job. Such questioning helped her standardize the company on two CAD tools, down from 10, and standardize on one reporting tool instead of using three.
Putnam is also increasingly asking whether she even needs a vendor solution.
“With tools like Claude Code, when we look at [vendor-offered] apps, we ask if we even need them or whether we can create our own and not pay for maintenance,” she says. “Sometimes we want SaaS, where we want those updates, but there are others that we don’t need updates and won’t need to change the application much, so those are the ones we’re going to look at creating ourselves.”
Like other CIOs, Putnam believes modernization produces benefits for IT and the company as a whole, ensuring the organization not only has the technology necessary to perform but also a standardized data environment so that “everyone is looking at the same data, and it means the same thing,” she says.
In addition to cutting IT maintenance and management costs, modernization also reduces risks, by eliminating unsupported legacy tech and difficult-to-manage complexity.
And it makes IT talent more effective and efficient, by eliminating the need for outdated skills, which are typically hard to find and thus come at a premium. With rationalization, IT teams no longer must learn multiple vendor solutions or assign different workers to different solutions.
Modernization challenges
Of course, Putnam and other IT leaders acknowledge there are challenges to modernization and rationalization, too.
“Cost is certainly one. Sometimes it costs more to get off one than continuing to run multiples,” Putnam says.
Even in such cases, however, hard-to-quantify benefits make the move worth it, she adds. For example, rationalizing to one common system used throughout the company’s multiple geographic locations means workers anywhere can easily be assigned to help when one region faces a surge in work.
Data migration is another common challenge. But data issues can usually be overcome with “creativity, mostly, and having someone dig down to really get it done,” Putnam says. Sometimes it may mean shelving the data and only retrieving it if necessary.
Then there’s the challenge of limiting future rationalization by controlling what gets added to the IT environment today. To that end, deploying and using a common tool is the default standard now at General Dynamics Land Systems.
“That’s a rule that everyone abides by,” Putnam says, acknowledging some pushback. “Sometimes people will argue for that extra 15% that one tool might have that the existing tool doesn’t have. But we stress that standardization is best for the organization as a whole.”
A staple of CIO work
Krishna Prasad, CIO of UST, a digital transformation and IT services provider, similarly sees modernization through a business — not a technology — lens today.
Whereas modernization was once triggered by advancements that made existing tech outdated, obsolete, or no longer supported by the vendor, now modernization is triggered when business advancements render a deployed technology deficient, he says.
This new scenario has CIOs, including himself, modernizing faster than in past eras, Prasad says. And it’s why modernization remains a core component of the CIO role.
“Modernization means meeting today’s business needs, and that may mean we need to deploy a new version of [a technology] to get a better experience, speed, agility, or in a way that we can provide transparency,” he adds. “So, at UST we have always thought about modernization as a continuous process.”
For example, Prasad is currently modernizing the company’s CRM platform, even though the existing one would not be considered legacy tech using a traditional definition. Yet the deployed CRM wasn’t providing the capabilities UST needed for its sales department to deliver on the company’s vision.
“We weren’t having a good user experience, and sellers weren’t updating the information as they should, so we didn’t have real-time data and then the operations team had to do the data entry, so you had cost there, too, and we had reduced agility as a result,” Prasad explains.
Similar factors are at play when it comes to rationalization, which he believes should also be an ongoing concern for CIOs.
Despite the benefits these efforts bring, Prasad acknowledges the heavy lifts involved, ones that many organizations aren’t yet prepared to undertake. For example, UST still has a financial system running on premises, and because the complexity of “disentangling the financial systems from the guts of the business is challenging, it’s a change that the business isn’t willing to make right now,” he admits.
Such situations ensure modernization projects will remain a core IT task in the years ahead.
See also:
Read More from This Article: IT modernization: Still a make-or-break project for CIOs
Source: News
