The Modernization Mandate

Software, unlike fine wines, does not improve with age. Many IT executives falsely believe that they can save money on their enterprise applications by simply leaving them alone.

After all, they work–why fix them?

But this approach to IT is fraught with peril. Not modernizing enterprise software assets and letting them “decay” has a number of important potential consequences:

Missing out on new features. It goes without saying that the rate at which new and valuable features are being added today is increasing. Your competitors are gaining advantage–in speed, efficiency, cost, insights–from these new features; you run the risk of falling behind.

Missing out on new technologies. Cloud, containers, serverless–the list of new frameworks and technologies which can make your applications more scalable, more secure, more resilient and more cost-effective goes on and on. Yet older applications may not be able to take best advantage of them, or be able to use them at all.

Hidden costs. Most IT departments find that older applications, including those that are fully depreciated, generate the highest number of support tickets, and that these tickets have the longest time to resolution. By doing so, they incur costs from lost productivity due to downtime and from resources allocated to isolating and fixing the problem. Additionally, in today’s competitive talent market, many companies are finding it increasingly difficult to hire and retain IT professionals to work on legacy applications and technologies.

Security. Older software is often plagued with security vulnerabilities, and even established software vendors face the tradeoff of maintaining old versions versus creating new features. Moreover, older software is often not equipped to handle and mitigate modern, sophisticated threats. Here the price of delaying your modernization initiative could be catastrophic.

In short, pay now or pay later: and the costs of waiting could be more than just dollars.

Building your Strategy

As you embark on your modernization initiative, you’ll need a consistent methodology to guide your teams’ efforts. That nomenclature will help them communicate, make fact-based decisions and report progress. By removing emotion from the decision process as much as possible, the journey will be smoother and more enjoyable.

Assess

The first step is to develop a clear understanding of the current state of your applications. Knowing what you have will inform your next steps. A clear-eyed assessment helps facts become organized and digestible. Such an assessment typically includes:

• The version if it’s a commercial application; or the toolset (languages, open source components, etc.), if it’s developed in-house, used to create the application
• The application environment (operating system, hypervisor if virtualized, system software, any hardware dependencies)
• The data environment (database used, data models and schema, how it is secured and backed up)

Your assessment will help you make dispositioning decisions: which applications should be retired, which should be rearchitected or refactored, and which should be left in place.

Expert guidance and tooling can help accelerate your assessments For example, an end-to-end modernization framework can provide a succinct, actionable analysis of your current state – both for your applications and for your data.

Be explicit about your goals

A modernization strategy is, of course, part of the overall IT strategy and should align with your company’s business objectives.  The strategy is comprised of several key components. First, you’ll want to understand what your desired outcomes will be: What does success look like? How do they contribute to your IT and business objectives? And by when should you expect them to be achieved?

Your goals should be easy to communicate. Here are some examples:

• All our applications will be containerized and on the current revision of system software by December 2022, lowering support costs and increasing agility.
• We will reduce the number of applications by 20% by June 2023, lowering maintenance costs.
• We will consolidate our financial databases into one by March 2022 to simplify reporting.
• We will retire commodity on-premises functions and migrate to cheaper SaaS alternatives, recouping costs.
• 50% of our application portfolio will be migrated to the public cloud by EOY 2021, enabling us to close data centers.

Having defined the desired outcomes, think about the roadmap: the steps you’ll take, the milestones along the way and other measurable objectives and key results (OKRs). These are important not only to break down the journey into digestible steps, but also to be able quantitatively demonstrate progress.

Note that describing the enterprise-wide modernization strategy implies a new set of IT standards (and a corresponding governance function), such as mandating that all updated applications be containerized, support the 12-factor model and/or have mobile versions.

Build proofs of concept

There’s nothing like actually doing it to test out an idea. Proofs of concept (PoCs) inform and validate your strategy and also help your teams learn the “how-to’s” of modernization and cloud migration.

A best practice is to think of your PoCs as “throwaway.” Their true value lies in the lessons your teams learn and the standards they will establish. As your teams’ knowledge grows, they can infuse their learnings and standards into all their solutions, including the PoC.

Perhaps the most difficult question is where to start. Most organizations start with low-risk, low-complexity applications–those that can be tinkered with, that different approaches can be tried on and that can show positive results in a short period of time. From these early efforts, important lessons can be learned and practical experience can be gained.

Determining TCO

To help guide your decision-making, consider performing a total cost of ownership (TCO) analysis to ensure that your costs–and your cost goals–are understood and that as you proceed on your modernization journey, costs are kept on track.

In particular, as you migrate applications to the cloud, cost management changes dramatically, from a capital expense and depreciation-centric model to a subscription and operating expense-centric one. This disparity can introduce complexity into your financial analyses–how do you quantify your cost savings?

Executing the Strategy

As you kick your modernization strategy into high gear, communication with–and among–your teams will be critically important. Think of your strategy as a living and evolving thing, adapting to both changes in your business strategy, as well as to lessons learned and opportunities offered by new technologies. Use scorecards as a proven way to track your progress against the goals set in the strategy phase. And most importantly, celebrate progress!