Elyon Strategies Blog

Modernization and Cloud Adoption: Public Sector vs Private Sector Modernization

Modernization is not a new concept in either the public or private sector. Both public and private sector organizations realize that modernization is essential to deliver enhanced security, functionality, and efficiency to their customers and constituents. Information technology (IT) modernization can revolutionize competence, convenience, and effectiveness for all public and private sector users.

Commercial private enterprises need profits to stay in business, which requires them to be competitive. They must continually incorporate new technologies in their business operations to increase efficiency and productivity. Because of this, the public generally perceives the private sector to be more entrepreneurial and innovative than the public sector. Private sector enterprises are generally not as highly regulated as public sector agencies, and as a result, appear to be more flexible. Government agencies are generally funded by taxpayers and do not have customers in the traditional sense. They do not have to be profitable and often have lengthy and cumbersome procurement cycles, which can hinder innovation.

Modernization, specifically in state and local government, is no longer an optional one-time activity. A continuous modernization program is necessary to ensure applications are kept current to align with evolving technology and business needs. Elyon works with state and local government entities to develop a repeatable process that can be enhanced to create momentum and develop an aptitude to achieve one digital government.

According to most experts, government entities currently spend up to 80% of their IT budget on operations and maintenance of legacy systems. While private sector organizations can build a business case for obtaining funds to invest in new infrastructure, government agencies generally do not get additional funding even when they provide extraordinary service. Instead, government agencies must make the case that modernization investments will save taxpayers money in the long term. Elyon can partner with you to develop your modernization business case and propel you on your modernization journey.

What is Modernization? 

Modernization is a process that occurs over time and can vary for different organizations and organization types. It does not mean automatically moving to the cloud, and it is not a one-size-fits-all process. As a key component to increased productivity, modernization means recognizing that technology is advancing exponentially and then adapting to it in order to increase value and achieve organizational objectives. Modernization occurs as public and private entities make changes that prepare their organizations to operate in a modern way or mature to a specific capability level. Modernization also impacts the culture of the organization forcing process change, faster response, and tighter integration. A component of modernization can be cloud utilization, which requires information sharing across organizational boundaries, and a significant portion of this modernization process includes adopting shared services that must be adaptable.

Public versus Private Modernization Challenges

Modernization in a digital world is an organization-wide and cross-sector challenge. Many organizations, both public and private, do not know how to map out the transformation journey, or how to properly implement the right technology, skills, and processes needed. According to a new IDG Research Services survey commissioned by Insight Enterprises, 51% of IT transformation initiatives across both the public and private sector are stalled by planning and execution challenges, and enterprises abandon certain projects while dealing with the people, processes, and technology changes required to modernize IT operations. Elyon has partnered with many state and local government clients to achieve 100% modernization success.

Private-sector companies are generally ahead of public sector organizations in innovation because they have adopted agile models to smaller scoped sprints and modules. Public sector organizations are often still using legacy software systems that no longer serve their constituents effectively. Historically, many private-sector organizations have taken an incremental approach to IT modernization, in which they first address immediate pain points, as budgets and time permit, and then address subsequent issues that arise. This incremental strategy produces short-term improvements and minimizes risk. Most governments are still trying to do large-scale waterfall IT projects. Failure, which is very common among these substantial projects, often causes agencies to hesitate when investing in IT modernization. In a recent CHAOS Report, the Standish Group noted that many larger-scale projects never return value to an organization. Elyon’s agile methodology combined with our 100% modernization success rate is a proven formula that will deliver value to your organization.

Government organizations tend to have more complex IT structures consisting of data centers, networks, servers, and storage. These disparate, complex systems make IT governance very challenging, which makes it difficult for IT leaders to make informed decisions. In addition, government agencies tend to work in silos and have a more rigid hierarchical bureaucracy than private organizations. This results in cumbersome approval processes that prevent the government from being more responsive. Rigid hierarchy can also become an obstacle to innovation because it takes too long for good ideas to be approved or they get lost in the approval process. If an innovative idea does make it through the approval process, it is then faced with complicated procurement processes and long budget cycles.

Develop Collaborative Partnerships to Overcome Modernization Challenges

Tony Scott, former Federal CIO, believes if the government wants to fully reap the benefits of IT modernization, such as cloud, agencies need to develop more collaborative relationships with the private sector. The problems public-sector IT faces today, such as disconnected systems, non-interoperable hardware, and reliance on aging infrastructure and out-of-date business systems and solutions, were the problems the private industry faced and solved 20 years ago. By developing more collaborative relationships with the private sector, government agencies can leverage this experience and achieve economies of scale.

Public and private sector partnering is more than just acquisition and contract management. Government agencies have the opportunity to draw on private sector experience and expertise at each stage of the modernization process, beginning with planning, including inventorying and documenting the current systems and applications, and continuing with defining and refining requirements in terms of goals and solutions, implementing new technology, and retiring obsolete technology.

Both public and private organizations have their own unique challenges when it comes to modernization. Many of the challenges that government agencies currently face were solved by private organizations two decades ago. By partnering with private organizations, such as Elyon, who have experience implementing agile modernization solutions, government agencies can begin to replace aging infrastructure and out-of-date business systems and solutions to achieve continuous improvement and modernization.

About Elyon

Elyon Enterprise Strategies, Inc. is a management consulting firm specializing in business design. Our purpose is to lessen executive burdens, increase organization order, and provide organizations with more hope and success while meeting human needs. We are each client’s most trusted advisor and inspire our clients to transform complexity into enterprise success.

Carl Engel
About the Author
Carl Engel
CEO, Chief Architect
Elyon Strategies
Carl Engel is a Business and IT visionary with 30+ years of experience including Health and Human Services, Revenue, Finance and Technology. Teaching advanced technology, architecture and framework courses on 4 continents.
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About Elyon

Bridging the gap between strategy and action

Here at Elyon, we’ve developed the ability to transform organizations through powerful processes and innovative technology. Our team helps you manage the complexities of digital transformation and overcome the struggles of long implementation cycles. 

We have the experience to execute detailed transformation projects from the foundation and planning stages through to the implementation and knowledge transfer phases.

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