Challenges That Enterprises Face In Application Modernization

With the COVID-19 pandemic emerging as a global crisis last year, remote working and online collaboration became the mainstay of business productivity, exposing the inadequacy of legacy systems in catching up to the changing context. As a result, many enterprises with a limited digital footprint were compelled to accelerate their modernization initiatives to address the high cost of operations, inability to scale quickly, fierce competition, and longer time-to-market. The foremost threat was from the born-in-the-cloud companies, and modernization became imperative to remain relevant in the market. 

So, what are the challenges faced by enterprises in their legacy applications?

Legacy applications lead to poor stakeholder experience that can impact brand perception. There is very little opportunity for businesses to be resilient when burdened with inflexible systems that are resistant to scale out. Additionally, the high cost of operations curtails the funding of innovation with longer time-to-market impacting revenue growth. Lastly, business leaders are worried about business disruptions caused by the inability of legacy infrastructure to respond quickly.

Is modernization the solution to all these challenges? Before that, let us discuss – what is modernization?

Modernization essentially refers to the process of making legacy IT systems, both hardware and software solutions resilient, responsive, and relevant, to be a live enterprise, by using modern technologies that include the cloud, open-source software, and DevSecOps. The three attributes define the live enterprise - where intuitive business decisions can be implemented at scale, value chains are more agile and responsive, and experiences are perceptive, built on user needs. 

From the above argument, it appears that modernization is the ONLY solution to the challenges of legacy applications. So, what are the critical success factors for modernization?

How to make modernization successful?

A new global research report found that 74% of organizations that started a legacy system modernization project failed to complete it. The report suggests that the disconnect between technical and leadership teams in terms of priorities is one of the largest obstacles. To prevent falling in this percentage of failure, we recommend the following best practices:
 

• An argument for modernization can be built with a strong business case supported by an early validation of techno-commercial solutions. It is a good practice to develop a techno-commercial framework to evaluate the different available solutions 
• A well-defined enterprise technology blueprint with a focus on the stakeholder journey that includes experience, productivity, and competitiveness can set the roadmap to a successful implementation 
• Enterprises must put in place empowered program offices to drive effective culture and change management to ensure that their employees are aligned with the objective behind modernization 
• Instead of simply modernizing applications, it is essential to go for an early business process optimization and then modernize 
• An extreme automation approach supported by deep system understanding, tools, and platforms can accelerate the modernization effort. Other factors such as automation with DevOps or platforms, an agile and extensible modernization architecture, loose coupling of capability and technology stack, increase the ability to plug-in new capabilities faster
• A team of experienced modernization SMEs with domain expertise can help assimilate and leverage the learnings from diverse domains, develop foundational capabilities and organizational-level best practices
• An extensive partner ecosystem can go a long way in the success of a modernization program 

Modernization can help enterprises thrive as digital natives

The success of any modernization initiative depends on the user experience it delivers. Enterprises can build resilience by embracing cloud for evolving business needs and enhancing adaptability as well as by transforming legacy systems to a modern digital technology stack. They can be more responsive by adopting Agile and DevSecOps for building secure IT systems. Lastly, a platform-centric modernization approach allows enterprises to innovate faster. 

With open-source software, cloud, smart automation, and software asset optimization, enterprises can reduce the cost of modernization as well as improve stakeholder experience to unlock maximum value. 

Most importantly, modernization is a journey and a continuous focus on the program cost and risk management is needed to ensure success. End objectives must be clearly defined from the business stakeholder’s perspective to ensure it is not merely IT-focused but delivers on the business outcomes. Modernization is not just about upgrading technology, it involves streamlining business processes, bringing enterprise-wide change, communicating with employees, adopting a flexible architecture, and taking a phased approach to implementation.