Modernization vs. Transformation

April 07, 2020 by Jim MacLaggan

What’s the best way to update your licensing system?

Modernization vs. Transformation

Within the regulated agency community, upgrading your licensing and permitting solution has the potential for a big payoff. Improved automation of the licensing procedures – including inspections, code enforcement, application processing, and approvals – can drive economic growth, meet rising service expectations, and achieve sustainable efficiency gains.

But before you begin to climb the complex hurdles of securing budget availability, resource and project planning, gathering requirements, and navigating the political environment in order to improve your technology, there is a fundamental question to consider. Should you modernize the system you have or go through a full transformation to something new?

As a regulatory expert and solution strategist, I regularly conduct operational assessments of how our customers use our systems. It’s surprising how often simple configuration changes or demonstration of existing capability that hasn’t been used effectively can make a huge impact on job performance and processing efficiency. We can provide low or no dollar changes that are surprisingly simple but yield incredible results. - Eric Robb, Senior Solution Strategist, Tyler


A modernization strategy means taking legacy systems and updating or replacing them in a way that enhances your performance but does not fundamentally change the way you currently work. It generally involves taking a lower-risk, less disruptive approach to system change. This does not mean that the evolution of the system is not significant or capable of delivering real benefits. Modernization focuses on areas that deliver the highest impact for the agency. Each change is completed and evaluated for impact without disrupting the entire organization.

When does modernizing make sense? A good place to start is to consider the following:

  • Do you have a significant investment in the current system (cost, staff knowledge and training, or integration with other systems)?
    The answer to this is likely yes. That’s why you should always at least consider a modernization project before deciding to replace your system.
  • How significant are the current system’s functional gaps?
    It’s important to have a clear understanding of what outcomes your agency is seeking and reconcile that with your existing vendor and their system capability. If the current system is stable but less than optimal in specific areas, modernizing may make sense. If your system vendor does not have a coherent view for the future that aligns with your needs, it is best to move on. A key aspect to consider here is trust in your technology partner and belief in the product direction – you’re recommitting to each other for a long time.
  • What is your budget tolerance?
    Agencies often underestimate the cost of a full system replacement. Changing systems requires dedication, focus, and significant funding. If ongoing budget issues are holding you back, modernizing can deliver meaningful improvements, incrementally, and budgeted over a longer period.
  • Do you have the ability to contract for an upgrade?
    Normally, upgrades to existing systems are easier than a full and open procurement. Nonetheless, it’s worthwhile to talk to procurement to make sure there are no contractual issues.

If after you answer these questions modernization is still a viable option, it’s time to strategize with your divisional leaders to identify areas of maximum impact. Engage your technology partners to determine objectives, outcomes, and costs. Then, you can identify an achievable plan, document success criteria, and move on to next steps.


Transformation, particularly digital transformation, means creating a robust new business model and changing the way an organization manages its work. A transformational implementation approach usually means a wholesale system change. It gives your agency a chance to look at policies, business processes, strategic goals, and operational objectives. However, agencies face challenges created from system and budget constraints, so it is not always feasible to do a full transformation.

When does transformation make sense? To decide, consider the following:

  • Take a Long-Term View
    An effective strategy should chart the path for the next 10 years. Contemplate leadership needs, workforce impacts, user focus, and changing societal and demographic influences. Emerging trends today will likely be core business services in a few years. Your existing system should not be the barometer for the future state.
  • Factor in Change
    Build a strategy that’s adaptable to accommodate future change. Every public sector agency is in a different state of maturity, in terms of citizen engagement and technology adoption. Your long-term view will need to be adjusted as trends, priorities, and budgets change. Not everything has to be done at once, but there should be an overarching vision with objectives and actions that can be rolled out as necessary.
  • Open Up the Aperture
    Take a broader view of the agency’s operations. Look beyond core licensing system functions to incorporate other non-core business requirements or ancillary functions into the new technology platform. Use the modernization initiative to find technology and operational efficiencies across the agency, not just within the legacy system capability.
  • Focus on the User Experience
    The user experience should be focused on your constituents (internal and external stakeholders) and be consistent across all channels – regardless of how they consume data. Administrative staff, regulators, and the public will all be interacting with your solution. Ask yourself, “Does the technology give each type of stakeholder an easy, feature-rich experience?”
  • Take Time to Revisit Policies, Legislation, and Practices
    During a modernization project is a good time to revisit polices, legislation, and business practices. It takes time to review, propose changes, and adopt something new. Since modernization projects can be completed over a longer time, this may work well to incorporate policy change. Legislative policies are often outdated and have not been modified to align with technological advancements, or agencies have simply failed to adopt modern digital practices. In either case, in a transformational environment, this task requires considerable time and effort and should be included in the strategy and planning phase.

A full transformation requires a lot of planning and change management, and it typically comes at a higher cost. Whether you are contemplating modernization, or if you decide on a full transformation, the key is a good plan and a realistic sense of the implications for your whole organization.

Tyler Technologies offers operational assessments and advisory labs, free of charge, to help you evaluate your current situation and decide which path is right for you. Modernization or transformation — either way, updated technology helps you serve the public better.

Jim MacLaggan was formerly vice president, state regulatory portfolio, at Tyler Technologies. Learn more about our regulatory solutions for state and federal agencies.

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