Bridging Legacy Systems with Modern Innovation to Accelerate Transformation -- Tiago Azevedo, CIO of OutSystems
By Lane F. Cooper, Editorial Director, BizTechReports, Moderator for CIO.com
Despite prevailing conventional wisdom in the enterprise technology community, businesses can drive innovation without being overwhelmed by the complexities of legacy system modernization, according to Tiago Azevedo, CIO of OutSystems, a leader in low-code and no-code (LCNC) technology. These LCNC platforms – when combined with generative AI (GenAI) – can allow organizations to innovate rapidly and deliver immediate business value without the need for extensive legacy overhauls, he explained in the wake of a CIO.com virtual roundtable that featured over a dozen enterprise technology executives who gathered for a session on how to accelerate digital transformation initiatives.
A Balanced Approach to Transformation
"Traditionally, we’ve viewed business transformation as needing a wholesale reevaluation of all our assumptions," said Azevedo."But what's interesting is that you don't necessarily need to go overboard with legacy modernization. With low-code and no-code platforms, combined with GenAI, businesses can innovate rapidly and deliver value without the need for extensive overhauls."
It is, he suggested, a practical approach that many organizations may find refreshing. "The age of some legacy systems influences the approach you can take, but my preferred method is to push these old systems down to the basement, metaphorically speaking," he said. "By wrapping them with APIs and interfaces, you can access their data and functionality without needing to overhaul them. This strategy allows you to start building new, innovative applications quickly."
Innovation Without Legacy System Overhauls
LCNC platforms offer a unique opportunity to provide a visual application development environment that offers a significantly higher level of control over the development lifecycle that can be achieved without them.
"You can develop at high speed, push new features, and continuously create and improve processes without ever touching the legacy systems," Azevedo noted. "This way, you're immediately bringing business value without the significant investment of time and money that typically comes with legacy system overhauls."
Azevedo shared a compelling example from the insurance industry. "Imagine you're an insurance company where agents in the contact center have to navigate multiple applications to solve a customer's problem. By creating an internal front end that aggregates data from these different systems, you can enable agents to serve customers through a single interface, delivering immediate business value."
The strategy allows businesses to innovate continuously without the burden of migrating data and functionalities from legacy systems. "You can progressively replace legacy systems over time while building innovation applications that abstract away the complexity of legacy systems."
A Strategic Perspective on Mergers and Acquisitions
Azevedo’s approach is particularly relevant when it comes to mergers and acquisitions (M&A),
"M&As often fail to meet expectations, with IT integration issues frequently blamed for delays and missed objectives. The beauty of this approach is that you don’t need to touch the legacy applications of the acquired company. Instead, you can integrate and create common portals and interfaces, allowing you to deliver business value more quickly."
In many M&A scenarios, companies end up with multiple core systems due to acquisitions. "Instead of deciding which system to keep or merge, you can build an ‘innovation’ service layer over the top of the stack that can address business problems, allowing you to operate efficiently without the need to destroy or merge systems immediately," Azevedo explained.
Generative AI’s Role in Modern Business Transformation
As businesses explore the potential of AI – particularly GenAI – Azevedo highlighted its transformative potential. "GenAI has the ability to revolutionize digital transformation. At Outsystems, we’ve infused AI into our platform since 2018 to help organizations develop applications and operational processes more quickly and with greater precision."
GenAI, he observed, enhances the software development process within low-code environments. "Imagine building applications by simply prompting the platform to create and refine features for you. GenAI not only accelerates development but also enables deeper integration of AI capabilities into the applications themselves."
One powerful example of GenAI's impact shared by Azevedo: "We implemented an AI agent in our customer support portal, and it now solves 30% of inquiries automatically. Before GenAI, we struggled to reach even 10%. This level of transformation in customer service is unprecedented."
Governance and the Path to Rapid Innovation
As companies integrate GenAI with low-code platforms, governance remains a critical concern. "But it is absolutely possible," Azevedo assured.
"One key element is establishing GenAI policies that feature input from a broad set of experts across organizational disciplines to agree on key principles and standards of behavior. For example, at least for the time being, no automated decision-making should take place without human validation."
Azevedo also emphasized the importance of quality data in AI-driven transformation. "These large language models are only as effective as the data you feed them. If the data is poor, the AI will deliver poor results. Ensuring high-quality data is crucial for the success of any AI initiative."
A Disciplined Approach to Innovation
Azevedo outlined that successful innovation strategies that leverage LCNC and GenAI start with identifying opportunities, ensuring data quality, and iterating rapidly. "Start small, iterate, and scale fast. By focusing on quick wins and measuring results, you can achieve significant impact over time."
His practical advice for organizations eager to embrace this approach:"Worry less about legacy systems initially. Focus on building innovation applications using a low-code approach, and infuse GenAI where it makes sense. By starting small and scaling fast, you can drive transformation without getting bogged down by legacy modernization."
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EDITORIAL NOTE: Click here to view the full interview with OutSystems’s Tiago Azevedo