“The newly accelerated pace of digital transformation is set to continue,” says Accenture’s Technology Vision 2021, a global survey conducted by Accenture Research in 31 countries and 14 industries, from December 2020 through January 2021.
The survey reveals that companies are racing to reinvent themselves and use innovation to realize their vision. Many are stepping up to use technology in extraordinary ways to keep their businesses and communities running at a pace they previously thought was impossible. As the report says, “a new era of industry competition is dawning – one where companies compete on their architecture. But building and wielding the most competitive technology stack means thinking about technology differently.”
Are Luxembourg’s organizations ready to stack strategically and re-architect their IT infrastructure? Thibaut Henry, Associate Director – Cloud practice Lead Luxembourg at Accenture, takes stock of the current situation.
Outdated technologies
“Historically, most Luxembourg and European organizations have built their information systems empirically, through projects that sometimes lasted four to five years, involved 20 to 30 full-time resources and cost millions,” Henry explains. “It then took them another four to five years to start realizing a return on their investment.”
Now forced to adapt their architecture to new business realities, regulations and technologies, these companies have lost their reactivity and agility and their systems are fast becoming obsolete. “Some organizations are still using Cobol or Mainframe technologies, whereas the IT staff who knew how to use these technologies have retired a long time ago,” Henry notes. “These organizations did not anticipate change. They are now faced with outdated information systems, with no one to maintain them.”
Rethinking IT systems
However, the situation is beginning to change, and an important trend is emerging: “The pandemic has made a lot of people wake up. Now, large corporations are rethinking their information systems to make them much more modular, agile and better organized,” Henry says. “And instead of relying on a sole technology that operates all activities, they are slowly turning to modern cloud-based architectures that use functional bricks, which are quickly available, accessible and deployable, and dedicated to serve one single activity. This is an important first step towards making their business and technology strategies indistinguishable.”
Major Luxembourg organizations are taking GAFAM or Netflix as the model for their technologies and architectures, Henry continues. “Cloud offers as-a-service mode, which allows them to test a feature right away, without huge investments. I give my credit card number, I click, and I have the solution immediately available. I can then customize it, because it is pre-programmed with the available building blocks,” the cloud expert adds.
“I can then connect my systems to the architecture via APIs, export my data and integrate them with partners’ data. No need to buy expensive machines and servers nor install my own data center. Massive investments are no longer necessary.”
Furthermore, three to four months are now sufficient to finalize cloud-based IT projects and get the system live and operational. “With these new à la carte services, companies can develop new businesses and offer their customers more value-added services,” Henry says. “Now is the time for Luxembourg to accelerate. Especially since such architectures are less energy-intensive and also meet the sustainability aspirations of companies.”
Luxembourg, IT innovation pilot
Many large groups operating in the Grand-Duchy have a parent company based abroad. Can these subsidiaries carry out their own IT architecture transformation autonomously? What is their room for maneuver vis-à-vis HQ?
For Henry, HQs usually define the best practices to be implemented at a global level and provide recommendations, while trying to maximize synergies between the branches: “As such, the group acts as a facilitator, and supports their Luxembourg branch in the transformation process,” he explains.
However, other groups prefer to grant their subsidiary a pilot status for large-scale projects: “Some Luxembourg branches are pioneering the implementation of technology on behalf of the group,” Henry observes. “Because the Grand Duchy has a small geography, and people are agile and multilingual, it’s not too risky for the group to set up a pilot project that will then be deployed across the entire group.”
