What is the Importance of Data Modernization for Digital Transformation?

Data Modernization

Software applications receive technological upgrades, and cloud ecosystems accelerate this process through virtually “always on” mechanisms. Adopting cloud platforms or implementing secure electronic communications requires data modernization services that help business migrate their databases from obsolete systems to new programs. This post will explain the importance of data modernization in digital transformation across enterprise operations.

What is Data Modernization?

Data modernization services include identifying the inefficient and outdated components of a company’s database management system (DBMS) and replacing them to benefit from more competitive technologies like cloud computing, artificial intelligence (AI), and predictive analytics.

Managing corporate databases using legacy IT infrastructure exposes business communications to cyberattacks. After all, businesses are the prime target for most ransomware and website cloning campaigns.

Complying with the latest privacy laws becomes challenging due to technical incompatibilities between advanced encryption technologies and enterprise DBMS that relies on depreciated software components or networking protocols.

Data modernization services guide companies in realizing the necessity for holistic digital transformation to overcome all the issues discussed in this section. Moreover, we have listed the reasons that explain why modernizing your systems matters.

The Importance of Data Modernization for Digital Transformation

1. Consolidation of Company Intelligence

Different departments at an international organization employ data aggregation solutions to build business intelligence (BI) suitable for each departmental objective. Likewise, global organizations have branch offices in multiple countries and regional subdivisions. 

This situation causes data quality management (DQM) risks, ranging from record duplication to inefficient intelligence retrieval through database queries. Nevertheless, data modernization services assist businesses in collecting enterprise data from all regional offices and business units.

Later, managers can use a unified interface to generate consolidated “data views” or “reporting dashboards” that meet specified conditions. So, modernizing your IT infrastructure eliminates the drawbacks of enterprise data distributed in different on-premise storage resources.

2. Flexible Reporting Modules

Digital transformation in business and financial accounting (BFA) must enable employees to modify, customize, and communicate essential reporting data through user-friendly dashboards. This requirement implies that freely configurable data visualization tools are vital to implementing modern reporting experiences.

For example, data aggregation solutions can gather intelligence on consumer preferences over a year. Will any decision maker like to spend hours staring at thousands of rows in the developed database once the aggregation operation finishes?

Therefore, innovative visualized reporting highlights the importance of data modernization services in digital transformation and business communication. Besides, it helps employees generate derivative data views for personal convenience and productivity gains without directly modifying the primary BI dataset.

3. Cloud Computing Integration

The cloud involves virtualizing computer operations based on remote servers configured to simulate connected experiences. Cloud computing is also advantageous in the cost optimization of networking and data storage resources.

Several data aggregation solutions often involve cloud-based automation to deliver 24/7 intelligence acquisition, data cleansing, and analytical modeling. So, cloud integration is another advantage of utilizing data modernization services for business intelligence and analytics that help you realize the company’s digital transformation strategy.

You want to compare the cloud vendors in the target markets and select a platform that fulfills the following requirements.

  1. The cloud computing platform must offer ease of importing and exporting enterprise data.
  2. Its pricing tier must offer the flexibility of payment options and billing frequency.
  3. Your employees must find it easy to learn and apply the new reporting regime.
  4. The cloud partners must develop, deploy, and periodically maintain the firewalls and authorization frameworks to protect against cyberattacks and improve corporate governance.

4. Multi-Stakeholder Collaboration

Employees in two or more departments can require access and modification rights to the same BI dataset or visualization report. Therefore, data modernization services facilitate migrating enterprise communication systems to another platform optimized for real-time collaboration.

Additionally, you can work with your team members from around the world. No individual needs a computing device with cutting-edge hardware specifications. Yet, all stakeholders, including suppliers and consultants, can quickly contribute to the same document without hindering the comments and corrections made by others.

2020 forced all industries to adopt the “work from home” (WFH) models, and that circumstance demanded extraordinary leadership concerning IT integrations geared toward team collaborations. This trend has slowed, but WFH and remote working models will undoubtedly thrive in other forms.

5. Artificial Intelligence (AI) and Machine Learning (ML) Applications

The importance of data modernization in digital transformation relates to the rising demand for industrial automation powered by AI and ML. Significant breakthroughs like ChatGPT and OpenAI have also increased business areas that will benefit from AI-led improvements.

Consider chatbots and virtual assistants in smartphone devices or voice-based home automation. A few years ago, these technologies would feature robotic voices, deliver artificial speech patterns, and respond to vocal commands conforming to a specific syntax.

However, those conversational interactions will not alienate consumers and working professionals because of the innovations like large language models (LLM). Once their newer implementations become ready for commercial deployment, customer services and data retrial experiences will become more natural irrespective of human intervention.

6. Preventing Cyber threats and Corporate Espionage

Malicious individuals can create a duplicate website with an identical domain name. Later, they exploit search engine optimization (SEO) techniques to trick consumers, employees, investors, and authorities into believing the new website is authentic. So, organizations must actively monitor the irresponsible use of their brand kits and trademarks.

Simultaneously, you want to use data modernization services to prevent unauthorized individuals from infiltrating your IT resources. After all, old software and hardware technologies cannot meet the latest cybersecurity standards. Also, several cybercriminals have already maintained databases on security vulnerabilities in legacy systems.

Consider how business rivals can employ corporate espionage tactics to copy data packets transferred between devices used in aggregation solutions. Corporations require end-to-end encryption (E2EE) to mitigate such risks. Modernizing their IT system involves enabling E2EE across all communication and intelligence-gathering channels.

7. Long-Term Reliability

On-premises storage systems can lose data due to moisture, physical impact, fire hazards, maintenance issues, read-write inefficiencies, and file corruption. Moreover, natural disasters like earthquakes, landslides, avalanches, heavy rainfall, and health issues can prevent your coworkers from using company resources.

Therefore, enabling remote access facilities through cloud platforms is essential. Many online data aggregation solutions offer daily backups. They also provide one-click system restoration options in server configurations and virtual machine (VM) settings.

Data modernization services assist businesses in developing IT environments for long term-reliability, which justifies their importance in digital transformation. For example, future managers can request visualized reports depicting sales data archived since the incorporation of an enterprise.

8. Legal Risk Management

The European Union (EU) has published the general data protection regulation (GDPR). Meanwhile, Brazil has rolled out Lei Geral de Proteçao de Dados (LGPD) 2020. Similarly, the list of government mandates affecting consumer data management in different geographies keeps growing daily.

So, corporations must quantify and mitigate the legal risks associated with multiple privacy enhancement regulations. Enforcing E2EE, cookie consent management, and immediate data removal upon a customer’s request can improve your compliance.

Still, implementing these strategies is not feasible via obsolete technologies and unsupported coding standards. Data modernization services recognize the importance of complying with privacy legislation for responsible digital transformation. Therefore, they offer granular control over enterprise data processing.


You want efficient data aggregation solutions or real-time collaborative environments. So, you must switch your existing data management system to more innovative tools and platforms. Additionally, you will require cloud integrations to mitigate data corruption risks and combat corporate espionage attempts.

Modernizing enterprise IT resources will facilitate flexible reporting visualizations and ML modeling assistance. Nevertheless, managers having a digital transformation vision must select the most appropriate data partners to ensure transition success. A leader in data modernization services, SG Analytics support global organizations in enhancing data governance, availability, standardization, and pipeline automation. Contact us today if you want highly efficient data lifecycle management tools and strategies.



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