Thrive in the Digital Landscape With Application Modernization

Did you know? 88% of IT leaders admitted that IT systems modernization is critical to meet emerging business demands. However, only 33% of technology is modernized in large-scale organizations. For many enterprise-level organizations, legacy applications have long been the backbone of their operations since they used to provide value to customers and drive the bottom-line. However, these outdated systems (most likely monolithic and legacy) often present inherent challenges in coping with today’s fast-evolving, data-driven, and interconnected business landscape. The reason behind this is the clunky infrastructure that is costly to maintain, rigid and complex systems that are daunting and nerve-wracking to update, and an unwieldy deployment process that hinders innovation, slows down decision-making, and jeopardizes customer experiences. This is where the need for modernization of legacy applications comes in.

The inevitability of change makes application modernization a critical driver of digital transformation, enabling forward-thinking organizations to unlock new avenues for unprecedented growth and success, quickly adapt to changing market demands, and stay agile, relevant, and competitive in an increasingly digitized world. This may be the reason behind the rise of the global application modernization market size, which is estimated to grow at a CAGR of 16.7% and will reach 32.8 billion USD by 2027. What’s more interesting to note is that 80% of organizations plan for more than half of their custom application to be modernized in less than 2 years. Furthermore, a recent survey reveals that 92% of enterprises are actively considering or working on an application modernization project. The same survey report also reveals that 79% of application modernization projects fail and there are many reasons for this:

• Complex and Time-consuming – 58% of business leaders admitted that an app modernization project takes 16 months, on average. While, more than a quarter (27%) admitted that such modernization projects take two years – or more.
• Expensive – On average, an application modernization project costs 1.5 million USD, claims nearly three-quarters of survey respondents.
• Risky –Nearly 80% of survey respondents admitted that they had experienced at least one application modernization effort failure.

Undoubtedly, modernizing legacy applications may seem daunting and intimidating, however, with detailed planning and a commitment to continuous improvement, C-suite executives can not only improve the underlying performance and functionality of legacy systems but also propel their organizations to new heights of competitiveness, innovation, and digital transformation.

Key Drivers of Application Modernization

Digital Transformation: The ongoing wave of digital transformation is bringing a paradigm shift across industries and organizations must adapt it to remain competitive. In other words, companies can align their broader digital transformation initiatives with legacy systems modernization to leverage the potential of disruptive technologies, automation, and data analytics. This, in turn, enables companies to improve customer experiences, optimize processes, and drive digital transformation.

Agility and Scalability: Legacy systems are inflexible and slow at responding to changing market dynamics. Modernizing applications allows businesses to break monolithic architectures into microservices, adopt agile DevOps practices, and quickly deploy updates using container orchestration platforms, such as Kubernetes. This, in turn, enables organizations to scale their legacy systems to meet growing demands and become more agile and responsive.

Cost Optimization: Legacy systems limit the ability to innovate and drive digital transformation due to dwindling support, high application maintenance costs, and lack of scalability. When organizations tend to overlook modernizing their legacy applications, technical debt starts mounting. Modernizing applications using development libraries and container orchestration platforms can save a lot of time, resources, and costs. In other words, legacy systems modernization allows companies to achieve significant cost savings by optimizing resource utilization, minimizing the total cost of ownership, and lowering maintenance efforts over time.

Competitive Advantage: Staying ahead of the competition is critical in a rapidly evolving business landscape. Modernizing applications using low-code platforms or developing a new custom application altogether from scratch can reduce development time by 90%, enabling organizations to achieve faster time-to-market and gain a competitive edge. This may be the reason behind the rapid growth of the global low-code platform market size, which is estimated to reach 36.43 billion USD by 2027.

The 5-Step Approach to Successful Application Modernization

The path to modernizing legacy applications entails a clear strategy and a defined approach to ensure hassle-free transformation. Listed below are the key steps to successfully navigate this journey:

Assessment and Planning

• Begin with a comprehensive assessment of the legacy systems portfolio to identify potential risks and applications that require modernization.
• Define clear objectives and align legacy systems modernization efforts with the organization’s digital transformation initiatives and strategic goals.
• Prioritize modernizing applications based on key factors such as changing customer needs, technical complexity, and business impact.

Assessment and Planning

• Begin with a comprehensive assessment of the legacy systems portfolio to identify potential risks and applications that require modernization.
• Define clear objectives and align legacy systems modernization efforts with the organization’s digital transformation initiatives and strategic goals.
• Prioritize modernizing applications based on key factors such as changing customer needs, technical complexity, and business impact.

Engage Stakeholders

• Involve all stakeholders, including CTO, CIOs, IT decision-makers, application owners, and end-users.
• Always make sure there is open communication and smooth collaboration to build the consensus and support required for the modernization initiative.

Adopt a Phased Approach

• Consider modernizing applications in an iterative and phased manner to minimize disruption to existing operations.
• Begin with low-risk, smaller applications to validate the legacy systems modernization strategy and gain early wins.

Leverage Cloud Services

• Embrace Cloud-based solutions for improved scalability, increased flexibility, and cost optimization

Monitoring and Continuous Improvement

• Keep a tab on the modernized application performance and collect users’ feedback to identify the critical areas for improvement.
• Embrace a culture of continuous improvement and regularly updating applications to meet ever-changing business needs.

Summing Up

Modernizing legacy applications is not merely a technical initiative but a strategic imperative for organizations to stay ahead in the competitive landscape. The important thing to note is that you don’t have to navigate the arduous journey of legacy systems modernization alone. Partnering with an expert can help you identify the key business drivers, devise a custom plan based on your current IT landscape, and provide end-to-end support throughout the modernization process.