Many stable organizations of the past got disrupted by the likes of Netflix, Uber, Airbnb, etc., because of their speed of innovation, customer-centricity, and ability to scale rapidly. Emerging customer and technology trends demanded every organization to devise their digital transformation. As organizations become more and more digital, they see that moving to the Cloud becomes a natural step forward. Monolithic products and legacy applications pose a barrier to compete in this fast-evolving digital world.
Adopting Cloud is not just a technology decision, but it impacts every business aspect, including finance and people - further, it's hard to find even a good starting point. Unfortunately, there's no single recipe for migrating current IT applications to cloud. The journey would be different for different organizations. Here is a case study on how our senior architect helped an organization kick start its Cloud adoption journey.
This organization is a large insurance provider in the European region with many business units, auto insurance, homeowners insurance, and farm insurance. These business units used their own IT infrastructure, including many COTS (commercial off-the-shelf) products and bespoke applications. The biggest challenge was their IT costs were escalating while their ability to respond quickly to the market was diminishing. They were under the mercy of COTS products providers. They found it challenging to identify technical resources to support their existing applications and, at the same time, formulate a modernization strategy.
We quickly looked at their application portfolio, analyzed them, and categorized the applications into rehost, re-engineer, and retire based on key business and technical drivers. We identified few applications for each of these categories and demonstrated the defined goals. Throughout the journey, we involved their IT teams, providing insights and sharing our experiences to help them embark on a complete overhaul of their legacy application portfolio.
Rehost – These applications were compatible to be hosted onto the cloud environment without any changes. Here, we migrated an application that dealt with the analysis of claims data. It was an analytics application on top of a PostgreSQL database. We recreated similar infrastructure on the Cloud and first migrated the data. Since the data updates were not very frequent, we could point existing analytics applications to the new data source on the Cloud, followed by the phased migration of application endpoint and users.
Re-engineer – Many COTS products such as SAP are complex to migrate to the Cloud in the as-is state. This organization has developed custom solutions around SAP to meet the business requirements of policy administration. Also, the organization wanted to reduce license costs. Here, we adopted the strangler pattern to minimize the migration risks and extracted the business logic from legacy applications (SAP-based) to design independent microservices by applying domain-driven design constructs. For some time, both legacy applications and new microservices served the business needs. Further, we redirected all product enhancement efforts to accelerate the microservices journey. Eventually, this led to replacing the legacy application with cloud-native services without any business interruption with a phased migration of application endpoint and users.
Retire – To our surprise, after we instrumented customer and user-level usage analytics, we were able to identify applications that are either not used by any or very minimally used, paving the way for phased decommissioning.
By the end of our engagement with this organization, we delivered the following business outcomes:
- Reduction in SAP license cost by 18%
- Cloud adoption roadmap established
- Teams trained to take on the Cloud journey forward
- Reduced technical debt freeing the capacity to build customer-value