Progressive Modernization: Funding Transformation Through Managed Services

Public sector organizations identify legacy modernization as the key to streamlining operations, unlocking new data streams, and delivering improved services and experiences to their constituents. While it is apparent that adopting modern-day technologies and processes is the need of the hour, modernization and digital transformation initiatives are capital and effort intensive. Struggling with budget and staffing constraints, public sector organizations find it difficult to execute these transformation programs. Adopting a managed services model as the approach for transformation can ensure a smooth and seamless transition toward a modern, insights-driven government. The approach enables organizations to streamline IT operations, generate up to 40% in OpEx savings, and use these savings to chip away at their technical debt gradually.

Why Do Over 50% of Government IT Systems Still Run on Legacy Technologies?

Legacy systems limit public sector organizations’ ability to execute their core mission and serve constituents cost-effectively. They increase operational risk, cause business disruptions, and lock data which can help generate valuable insights.


So, why do public sector organizations continue to operate on legacy systems? Because modernization is capital and effort-intensive and isn’t limited to a simple update of technology platform or incorporation of new-age digital tools. It involves an agency-wide transformation of people, processes, and technology, with an aim to adapt and survive in an ever-changing market and regulatory environment. Public sector organizations face several challenges as they plan and execute their legacy modernization programs. The most common include:

• Budgetary LimitationsMost organizations spend a disproportionate amount – roughly 80% – of their IT budget on maintaining existing legacy systems leaving little for modernization or other digital transformation programs.
• Limited ResourcesA qualified team of Subject Matter Experts (SMEs) must guide the transition in various aspects, including cloud computing, scalable architecture and network design, virtualization, and cybersecurity. Already struggling with staffing issues, public sector organizations lack the in-house capabilities necessary to drive a successful modernization program.
• Difficulties Migrating to New SystemsEmployees hesitate to move away from established practices and embrace new technology. A prudent strategy ensures that the experience of modernization is not jarring or too complex to handle.

These issues can make legacy system modernization an extremely daunting proposition for many organizations. It’s no surprise that over 50% of IT systems across half of the US states still run on legacy technologies.

Funding Modernization Through Savings From Operational Excellence: A Progressive Modernization Approach

Agencies are adopting a new progressive modernization approach to address legacy modernization challenges. This approach to modernization involves leveraging a third-party service provider to cost-effectively manage an organization’s IT infrastructure and end-user systems in a managed services model. Managed service providers (MSPs) offer various services, including handling networks and the associated infrastructure, maintenance of IT and analytics applications, monitoring, and security. They enable public sector organizations to access skilled experts across different technologies. Leveraging automation and innovative technology solutions, MSPs can optimize maintenance and operations, generating 30% to 40% in savings.


As a result, public sector organizations get a new source of funding for their transformational initiatives. The managed services provider can help public sector organizations re-direct these savings to their modernization programs. They can identify right solutions that can help chip the technical debt away, enable cloud adoption, and scale analytics in a progressive manner.


This approach also offers an opportunity to rethink analytics through improved data access; i.e., analyzing the data that legacy systems produce and building solutions to generate richer insights from this data.


Our blog deconstructs this new approach, discusses its mechanics and explore how it helps public sector organizations modernize their IT and analytics applications.


Read here