As the needs of both customers and organizations evolve, organizations search for solutions to meet and surpass these needs. Because the data modernization process offers improved methods for storing and analyzing data, organizations have increasingly turned to modern solutions in favor of legacy systems. Although adopting modern solutions has enabled organizations to process data and make better business decisions quickly, it’s also a massive undertaking that requires careful planning and data security considerations. Because of this, it’s essential to build a solid use case for switching to modernized solutions and carefully research the process before you embark on the journey.

This blog post will help you with this process by introducing the concept of data modernization, exploring the benefits and challenges of data modernization, and explaining the pivotal role cloud computing plays in its successful implementation.

What is Data Modernization?

Data modernization refers to upgrading how businesses store and analyze data. It consists of foregoing legacy data storage methods in favor of migration to modernized cloud solutions. You can apply modernization at various levels, not just at the infrastructure level but also at the raw data level.

To better understand this, let’s Imagine a chain of cafes with several locations in different cities. Each cafe gathers data independently, tracking sales, customer preferences, inventory, and employee shifts using separate systems or manual methods. However, managing and analyzing this distributed data becomes increasingly difficult as the cafe chain expands.

The chain decides to undergo data modernization to address these challenges. Their process includes:

Centralizing Data: The chain begins storing everything in a database or data warehouse, thus reducing the need to query multiple sources to generate insights.

Updating Inventory Management Processes: With centralized data, the chain can determine what to keep in stock, thus reducing the risk of hindered business operations.

Enhancing Customer Experience: By analyzing a customer’s history using data stored in a database or data warehouse, the cafe can offer specialized discounts to the customer, resulting in better customization and return visits. 

Adopting Cloud Computing Technology: The chain chooses to migrate to a cloud application for its infrastructure and storage capabilities to accommodate larger amounts of data and improve scalability.

Why Data Modernization?

At the crux of every organization is a data management system. Whether you’re a startup or a massive enterprise, handling and accurately analyzing data is one of your biggest business challenges. If you’re skeptical of investing in data modernization, consider this:

“The maturation of your organization directly correlates with the exigency of data modernization.”

Following this rule, you can delay thinking about data modernization if you are an early-stage startup but heavily consider it if you’re a larger organization that’s been in business for over a decade.

With time, organizations expand and begin storing and processing different types of data at larger volumes. This calls for potentially upgrading the method by which the business stores and deals with data at scale. Choosing the level of modernization can be as simple as shifting from one relational database to another or from an RDBMS to a NoSQL database.

Let’s visit some components you could look at for data modernization:

Unified Data Repository (UDR): Collecting data from multiple sources and storing it in a single location, like a database or data warehouse, can be a good call for improving data accessibility. You can utilize ETL or ELT pipelines to gather data, convert it into a consistent format, and load it into a central repository.

Data APIs: You can look at setting up APIs and middleware to make communicating and transferring data between different systems easier.

Analytics and AI: Storing all data in a single location allows your organization to analyze historical data and predict future trends using machine learning models.

Data Literacy: Storing and using ML models is NOT the end of your modernization efforts. Organizations should foster a “data culture” by teaching different departments how to interpret data insights and effectively use their knowledge to make better business decisions.

Data Modernization Benefits

Now that you understand data modernization and how to use it, let’s delve into the major benefits of switching from legacy systems to the cloud. 

Enhanced Data Processing 

Modernized platforms guarantee accurate and consistent data, which will result in improved decision making and an overall decrease in data mishaps.

Improved Cost Efficiency

Modernizing data infrastructure can reduce operational costs by improving processes, optimizing resource utilization, and lowering maintenance expenses.

Increased Accessibility

Because larger organizations have employees and users across the globe, it’s crucial that they’re able to access data wherever they are. Implementing a data modernization strategy will make it easier for employees and users to access this data quickly. In our cafe chain example, data from all cafes (sales transactions, customer feedback, inventory levels, and employee schedules) was integrated into a centralized database, improving data accessibility.

Improved Business Growth

It’ll be easier to make business decisions if stakeholders can access and analyze customer data in real time. Having this data on hand will result in increased collaboration and lead to improved innovation efforts that help drive business growth. Again, if we refer to our cafe chain example, implementing predictive analytics to anticipate trends led to well-thought-out solutions. 

Data Modernization Challenges

Although data modernization has many benefits for organizations, all good things come with a cost. Let’s review the following challenges to help you understand what your organization might face during modernization. 

Increased Data Complexity

The heterogeneity of data sources can lead to integration, data modeling, and maintenance complexities. Consolidating data can be complicated for large organizations where data is generated and stored in various systems. 

Increased Costs

Although data platform modernization can save you money in the long run, there are a lot of costs associated with the process you should be aware of. These include investing in a new cloud platform, hiring external services to assist with data migration, training team members to use the new technology, and potential disruptions to day-to-day operations. If you’re a smaller business, it’s worth thinking about whether the benefits of switching to a modernized system outweigh the costs that come with it. 

Organized Migration Efforts

Transitioning from legacy systems to modern platforms requires careful planning to ensure a seamless migration without disrupting ongoing operations. Migrating from legacy systems is a complex task that involves engineering resources and the right expertise. It requires engineers to spend time away from other projects and potential spending on training or hiring new personnel if your current team doesn’t have the necessary skill sets to carry out a migration. 

Role of Cloud in Data Modernization

Once your organization decides to proceed with the data modernization process, you can choose if or how you’ll utilize the cloud. Choosing to move to a cloud database opens up a lot of possibilities, which include: 

    1. Cost Optimization: Cloud solutions offer metered usage or, more simply put, a “pay-as-you-go” pricing model, which means you pay based on your resource usage.
    2. Scalability and Flexibility: Cloud solutions accommodate growth by allowing organizations to add or remove compute resources as needed.
    3. Advanced Analytics: Cloud solutions provide access to various analytics tools and machine learning services, enabling organizations to derive deeper insights from their data.

Conclusion

Although challenges may arise, embracing data modernization can help you use your data most effectively. The benefits, which include enhanced data processing, improved cost efficiency, and better data accessibility for quick decision making, far outweigh the obstacles in the long run. Cloud technology catalyzes this journey, providing the scalability, integration, and analytics capabilities required for successful data modernization.

We hope this blog post has given you the information you need to jump start your organization’s data modernization journey. To learn more about this process, we recommend checking out the following resources:

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Posted by Couchbase Product Marketing

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