This article was originally published on ITProPortal.com, authored by Anurag Bhatia, Senior Vice President and Head of Europe, Mphasis.

It started as a public health crisis of enormous proportions, but the pandemic outbreak evolved into a significant economic challenge, one that’s precipitated an entirely new business climate. It has added urgency to digital transformation programs, which are no longer a ‘nice to have’ but a ‘must have’ for organizations hoping to weather the storm and thrive once recovery takes hold.

The truth is that many companies were unprepared for a black swan type event. The subsequent business shocks, including wildly surging or dropping demand, supply chain roadblocks and becoming a virtual workforce overnight, highlighted vulnerabilities in existing strategies. A pre-pandemic approach is no longer fit for purpose and must be reimagined to encompass a more diverse range of risks and opportunities.

That’s where modernization comes in – in particular a zero-cost transformation approach, which I explore further below. This can provide a launch pad to a wider digital transformation program and a way to deliver on business vision.

Just how ready were we for the crisis?

In a survey conducted just before the pandemic, EY found that, overall, only 21 percent of global board members considered their organizations to be very well prepared to respond to adverse events. The financial services sector was the most confident, with 80 percent of directors believing their firms were well prepared.

Since the pandemic hit, the banking industry stood apart as it was pushed to the forefront of the news agenda – given banks’ central role as facilitators of vital financing and services during the worst of the lockdown. Some traditional players found themselves hindered by legacy systems from being able to cope with huge, sudden demand and adjust fast enough to the unfolding situation. What’s needed now is for these – and other – businesses to introduce more flexibility and capability to future-proof their operations.

In June, UK Digital Secretary Oliver Dowden stressed that life has changed permanently, with almost half of the country’s workforce now working remotely and many, set to do so indefinitely. He also echoes the sentiment that “coronavirus has delivered a sucker punch to our economy – and we really need tech to get us back on our feet”, which includes using tech to help “more traditional industries in order to adapt, survive and indeed thrive.”

Transforming in line with a rapidly changing backdrop

The last few months have irrevocably shifted consumer expectations, the role of technology, and the way businesses function. This means the emergence of new priorities for business leaders, with digitalization at the top of the list. Especially since Leonne International and Censuswide found that 33 percent of UK businesses don’t have the technology infrastructure to allow for long-term remote working. The future of business needs to pivot around digital and cloud technologies but how can organizations speed up – and fund – this much-needed transformation at a time of economic instability?

Modernization entails the migration of legacy applications to new IT systems and platforms. The problem is that, typically, businesses try to move across applications exactly as they are or based on an application inventory – and these end up being complex and expensive to maintain. This is why modernization projects get a reputation for failing more often than not. The way to succeed is by transitioning outdated, monolithic applications into microservices-based designs one step at a time, thereby saving costs and resolving data sharing and system compatibility issues. This affords a better degree of company-wide visibility, flexibility and control.

Self-funded modernization – one bite at a time!

True modernization is not just an IT project and must be viewed through a business-oriented lens, with each component tailored towards specific business outcomes and performance metrics to maximize benefits. It should address the needs of a business at any given moment, and those needs are constantly shifting in response to macro conditions and other factors, so it makes little sense to embark on a long program that is set in stone. Further, with the pace at which technology is advancing, committing to a bulky 2-3-year program would be counter-productive as the landscape would invariably change.

Instead, leaders can aim to start delivering on business priorities and goals within months, by leaning on cloud and digital tools to set off immediate value creation. Contrary to popular belief, successful modernization projects don’t require an extensive budget or time outlay and needn’t cause business disruption; impactful change can be achieved in an iterative and self-funded way. I refer to this method as ‘zero-dollar’ modernization. It gives senior management the power to control the process and gauge business impact accurately at each step, plus the agility to change tack if necessary.

Creating value with cloud and digital technologies

It’s a more dynamic way to undertake modernization, with several key changes happening in parallel rather than in a linear fashion – eliminating legacy applications in increments by upgrading them to modern, cloud-enabled architecture. This frees up budgets from costly middleware and essentially self-funds the simultaneous introduction of innovation by eliminating resource-draining systems and creating an ecosystem that supports newer, more cost-effective solutions. It also sets the digital infrastructure in place to employ DevOps for the automation of manual tasks.

Being tethered to monolithic legacy applications prevents organizations from responding quickly to unexpected events, market volatility or fluctuations in demand. These applications are also incompatible with new innovations that can help revenue growth. By taking an incremental approach, businesses can benefit almost immediately from tangible, measurable improvements and reduced technical debt.

Moving legacy applications to the cloud is a gateway to other disruptive technologies such as AI and deep learning, meaning that leaders can take advantage of more insightful, data-backed business decisions through greater access to data and advanced analytics. This environment also fosters greater innovation and provides the scalability for expansion, deeper customer engagement and a faster route to market for products and services.

Unlocking innovation to reach business goals

Many global names already acknowledge the urgency for change and are taking the lead in applying the power of digital to optimize their operations. Banco Santander recently committed to hiring 3,000 IT professionals to bolster its capabilities across cloud, data, AI, cybersecurity and software development. This is part of its strategy to accelerate digital transformation with a view to growing its customer base and revenues. HSBC, meanwhile, is moving even more of its physical services to digital with hopes to double the number of customers using mobile by 2022. With 90 percent of its transactions already taking place remotely and digitally, this was an existing program that was further hastened by the pandemic.

The marketplace is becoming more active as we edge out of the pandemic’s shadow but performance over the next six months or so is dependent on the strategic decisions made today. More than a third of European executives expect a muted recovery, including a drop in GDP of 11 percent across the Eurozone this year and recovery in late 2023. For European banking, this would lead not only to a squeeze on capital but to a fall in revenues of approximately 40 percent after risk. The crucial task now is to maintain revenues and instill a robust plan for recovery. A new approach to modernization can add value and resilience, ensuring continuity and driving growth.