Think Before You Pull The Plug: How To Modernize Your Legacy Technology

Rip-and-replace is no longer ideal for IT modernization. So what solves this?

In a world gone digital, the rules of the game are dictated by tech-savvy clients and digital native businesses. Adopting a digital-first approach in this highly competitive business environment is a no-brainer for any organization. Inflexible, aging and poorly integrated legacy IT systems can hinder an organization’s ability to innovate quickly. This further hampers their ability to deliver new products and services to the marketplace.

However, taking a rip-and-replace approach to modernizing legacy IT infrastructure can be highly disruptive to the organization regarding time, cost, risk and impact. Budget overruns are every organization’s pain point and project manager’s nightmare. The fear of wasting financial resources when modernizing legacy systems and incurring various unjust up-front costs is real. Did you know up to 70% of digital transformation programs fail to meet original expectations. These factors often outweigh the potential benefits. So how can businesses overcome these pitfalls?

Application modernization demands an awareness of the real business context. Organizations can understand these business contexts better by considering the multidimensionality of their services and the IT infrastructure and programs used to support those services. A continuous modernization strategy with a defined objective can enhance core business competencies and IT ROI.

How continuous modernization changes the game

Elevated user (both consumer and employee) experience is the yardstick of any successful modernization project. But businesses rarely take this into account and rather focus on the aspects of cost and time to judge the efficacy of application development projects. This lack of awareness is where many IT modernization efforts hit a snag early on. The traditional ‘big bang’ approach focuses on one singular digitalization initiative, whereas continuous modernization presents a compelling answer. Continuous modernization brings in new features and functionalities gradually and makes it easier for users to adapt to the changes. Continuous modernization is all about iterative steps. It’s a strategy to progressively evolve the existing IT architecture, adding emerging technologies to the core operating model.

Figure 1: A typical continuous modernization workflow

What’s more? The continuous modernization approach allows aging IT systems to become more composable (or modular) by switching a particular component with a more appropriate technology or by encapsulating, reusing and extending a current function. As a result, IT teams can partition basic elements into a system of building blocks that can be easily configured into a solution .

Slow and steady wins the race

Businesses must establish dedicated and well-rounded modernization teams who can work with key stakeholders. These teams can identify target improvement areas and establish a current performance baseline for comparison. Such an approach will allow business leaders to align their organizational strategy with their goals.

Let’s think of it this way — a legacy application is similar to an old house. When one is to renovate an old house, one must evaluate the situation and identify the problems before the refurbishing starts. Does it require new wiring alone, new plumbing or both? Unless every aspect of the house is considered, the one-time renovation can quickly become a never-ending series of repair jobs. Similarly, legacy applications should be evaluated to identify whether problems are related to the IT architecture, technology or code; or whether the issues originate elsewhere. Only then should businesses strategize their modernization efforts.

Last year, Gartner®* published a report titled “Use continuous modernization to optimize legacy applications,” where they recommended setting up continuous modernization and explained the steps comprehensively. Gartner shared that continuous modernization is a multistep process, split out across three key stages.

Stage 1: Assess and prioritize

• Identify the business capabilities that are Supported by legacy applications.
• Assess how business capabilities contribute to business value streams and customer value.
• Identify which components or parts of the legacy application support each business capability.
• Assess each business capability and Identify any modernization drivers, such as poor business fit, high complexity, operational risks or cost.

Stage 2: Transform

• Identify and prioritize the friction points with a TIME analysis.
• For each selected modernization activity, analyze the cause behind the problem and select the appropriate modernization approach to remove the friction point.
• Execute the modernization to remove the friction points or obstacles and improve business support.

Stage 3: Refine and repeat

• Reevaluate the backlog to include any new or changed priorities.
• Select the next activity from the backlog and go back to the second stage.

The best course of action ultimately depends on carefully assessing the business objectives of the organization and realizing how technology modernization might help in achieving those objectives. And even though modernizing legacy applications can be resource-intensive, continuous modernization can help you reduce the time and resources necessary to support a ‘big bang’ modernization project. Businesses can then reinvest these resources into delivering digital innovation and operational excellence.

Mitigating technical debts with continuous modernization

For many CIOs, technical debts and their potential for operational disruption are major points of concern, which can be removed with continuous modernization. Therefore, application and software engineering leaders must create a continuous modernization culture. For this, they need to identify, prioritize and remove friction points in legacy applications meticulously. Businesses must make sure that their internal teams aren't falling victim to “drift” over time. The goal isn't only to find a way to cure technical debt in the current application portfolio with modernization and rationalization but also to prevent technical debt by focusing on setting principles and guidelines for the future.

The verdict

Eventually, continuous modernization will turn old apps into a service offering platform. These can even facilitate a network of connected applications through using APIs. Having said that, no one can deny the challenges of managing an entire business. Organizations have to manage all the different locations and operations, as well as their finances. If all this sounds overwhelming — and let’s face it, at times, it can be — then you should consider bringing in an application modernization expert.

We at NTT DATA understand that Digital Application Services require both innovation and maintenance to truly add value. We offer Application Development & Modernization services including Mainframe Modernization services that bring new life to your IT infrastructure by improving speed, reliability and integration capabilities. With us by your side, you can proceed on your digital transformation journey at your own pace while scaling and optimizing processes for the best results.

^{*Gartner®, Use Continuous Modernization to Optimize Legacy Applications, Stefan Van Der Zijden, Deacon D.K Wan, 20 July 2022.}

^{GARTNER is a registered trademark and service mark of Gartner®, Inc. and/or its affiliates in the U.S. and internationally and is used here with permission. All rights reserved.}