Has your company reached the point where its legacy systems are holding back the business? In a 2019 study of 304 IT executives at large enterprises, 100% were undergoing IT infrastructure modernization, according to DataStax. As technology has evolved and enabled new capabilities such as real-time transactions and deep levels of data integration, many older systems are becoming obsolete— unable to compete in terms of speed, cost, or agility. Unfortunately, this can have dire consequences for an enterprise striving to maintain a competitive place in the market with outdated technology.
However, it’s understandable why a company may hesitate to modernize. The process is usually a large and expensive undertaking with numerous risks to consider. Companies trust in their legacy systems for daily functioning which has a direct impact on business operations, employee satisfaction, and the end customer’s experience. If the modernization process disrupts normal functioning, it will hurt the business. Further, if the undertaking fails, you could lose your investment and be back where you started. And the process isn’t necessarily easy, as 99% of the 304 IT executives in the above study report challenges.
With all of this in mind, it’s important to make an informed decision about enterprise application modernization initiatives, with a thorough understanding of the benefits, risks, and costs of doing nothing. Here, we will take a closer look at these aspects and will share the approach we have found to best mitigate the risks while maximizing your return on investment.
What Problems are Driving the Need for Modernization?
Advancements in technology have created gaps between legacy systems and modern demands. Additionally, better technology enables businesses to function more efficiently, reducing operating costs.
The most common reason that IT executives in the Datastax study imparted on the modernization journey was to reduce costs by better utilizing their resources. The second biggest driver was improving customer satisfaction, followed by increasing employee efficiency and satisfaction. Additional driving factors were the desire to use insights from data to improve customer engagement, enter new markets, respond to competitive pressure, and grow their existing customer bases and markets.
Additional more specific reasons for the transition include:
- An inability to integrate with new technology, tools, and applications (Augmented reality, chatbots, etc.)
- Vulnerability to security breaches and malware
- Slow operation speed
- Crashing and bugs
- Discontinued support from vendors
- Lack of mobile support
- The desire for a cloud solution
- Difficult user experience
- Unable to meet all of a business’s needs
- Compliance issues with regulatory requirements
- High costs for maintenance and management
Any of these sound familiar? Many of these drivers are costing enterprises money directly or indirectly due to lost time and a lack of competitiveness. Modernization provides a pathway to more efficient systems that improve operations and experiences on all levels— promoting growth and reducing costs.
3 Common Approaches to Enterprise Application Modernization
As modernizing IT infrastructure has become non-negotiable for enterprises, three common approaches have emerged. You can start from scratch, rewriting your system. You can replace your system with an off-the-shelf product. Or, you can modernize your existing systems piece-by-piece. The approach you choose will impact your costs, level of risk, and the overall likelihood of success.
Rewriting from Scratch
The first option is the most labor-intensive, demanding, high-risk, and expensive. When building something from nothing, you must identify all of the functions from ground zero which means large investments of time which is spent planning and answering questions. It’s also a separate entity from your existing system, so when it’s time to switch, it will be a drastic change for all impacted parties. Drastic changes increase risk. Further, if it doesn’t work out well, it can be an expensive experiment with no return.
Take, for example, the situation with the State of California. In 2001, the state imparted on a project to automate California’s court operations with a common system to replace 70 legacy systems. The cost ended up increasing 10-fold over a seven-year period up to $500 million. Eventually, court officials pulled the plug, investing a final $8.6 million to see if any part of it could be salvaged—a huge loss with slim to no return.
In addition to the huge risk of time and money, this approach doesn’t utilize the assets available from a legacy system. Any features that you want to keep, will have to be redundantly recreated.
Replacing with an Off-the-Shelf Alternative
Opting for an off-the-shelf solution presents the same risks with a drastic change and the loss of any features and assets you want to keep. However, it can reduce the amount of planning required in building something from scratch as it is a base product on which you can often build. At the same time, it limits the level of customization available.
Incremental Modernization of Existing Systems
The third approach is aimed at improving what you have to obtain your desired results. It involves analyzing the existing system and upgrading it in stages. You keep the aspects that can be useful.
A study was performed by the Standish Group to analyze these three approaches and the findings showed that the incremental modernization of existing systems was much less tedious than the others in terms of the number of decisions that had to be made. Further, it was generally able to provide users with an improved version of their system at a lower cost than the alternatives while offering a higher likelihood of success.
A Low-Risk, High-Reward Approach Application Modernization
The enterprise landscape is riddled with the corpses of failed big-bang system replacement projects. The majority of these projects fail. The rest take far too long to deliver value or cost far more than expected. Taking a gradual approach to modernization provides enterprises with a solution that lowers risk while also delivering incremental business value sooner.
For example, if you are going to modernize a system by building a new UI, you usually don’t want to rewrite all of the back-end business logic or migrate a very large legacy database. In this case, we recommend you approach the project through layers.
For example, develop your new modern API interface over the existing back-end system. This layer acts as an insulation layer to build your new UI upon. From there, you can refactor or rewrite the back-end logic as needed allowing the system to evolve over time.
An incremental approach doesn’t require you to take a big blind jump into modernization. If your legacy systems were an old house, this concept is like walking in with an experienced home renovator and choosing what to renovate first. Maybe you start with replacing the old kitchen appliances with new inter-connected smart alternatives. Once those are modern and look good, you move to the next room.
This is in contrast to bulldozing your last house and building a completely new house from scratch. It doesn’t make sense to throw away all you currently have and it presents a big risk (as California learned the hard way with its $500 million loss).
The incremental approach also enables you to validate the investment as you make progress. You complete a stage, reap the benefits, and can measure the impact. This can provide encouragement to stakeholders along the way. It additionally gives all parties, from employees to customers, the opportunity to adapt in phases. If one part goes wrong, all is not lost.
What to Expect in the Application Modernization Process
At Brightscout, we partner with enterprise organizations to modernize their applications in an incremental approach. Here’s how the process works.
- Step 1: Investigation of your company’s current legacy system and the pain points you are experiencing.
- Step 2: Development of an incremental approach to modernization that prioritizes the real-world needs of your business and utilizes components of the legacy system where possible.
- Step 3: Identification of the amount of time, effort, and resources will be required for each step.
- Step 4: Identification of the members of our team who will carry out each step.
- Step 5: Development of a realistic schedule to complete each step of the modernization process.
After these steps are completed, we begin implementing the modernization plan one step at a time.
Upgrading your Corporate Mindset – Continuous Technology Evolution
The world we live in today is a much different place than 20, 30, and even 10 years ago. Technology is advancing at an increasing rate and enterprises must become agile, flexible, and innovative to keep up. Old legacy systems are rigid and inflexible, so they require a modernization process. However, unlike in the past, it is not a “replace the old with the new” type of situation.
We are now in an environment where modernization needs to be an ongoing process. A business should never get to the point where it needs to completely replace an old system with a new one.
Instead, your systems should undergo a continuous evolution. The problem is, the dominating approach of the past was to set it and forget it. A one-time investment and you were good to go. Because of that approach and the rapid advancement of technology, we are in a place where the majority of long-standing organizations do need an overhaul to align their systems to match the current environment. The good news is, once your systems are up-to-date, the ongoing maintenance will be much easier and less expensive.
With Brightscout, the modernization process doesn’t have to be an overwhelming, high-risk project. We understand the best practices of modernization and believe in a strategy based on incremental, risk-averse steps. Our goal is to substantially lower the risk and cost while helping you reap the benefits of a modern IT infrastructure as soon as possible. Additionally, we can be a trusted partner that ensures your enterprise doesn’t fall behind again.
Interested in learning more or getting started? Contact the team at Brightscout today.