10 tips for modernizing legacy IT systems

IT modernization is a key component for establishing an agile, responsive enterprise. IT leaders lend advice on how to transform legacy tech into digital assets.

This year’s extraordinary events have accentuated the need for a modern technology environment agile and responsive enough to meet rapidly changing business dynamics — whether those are emerging revenue opportunities or work-from-home mandates.

And that means having a strategic plan for modernizing legacy apps.

“Getting rid of legacy is a perennial issue, but modernization is a top issue now more than ever,” says Diane Carco, president and CEO of management consulting company Swingtide and a former CIO.

Diane Carco, president and CEO, Swingtide Swingtide

Diane Carco, president and CEO, Swingtide

CIOs see modernization as critical for delivering better quality software faster, running IT with more controls and insights, integrating more security, and more quickly meeting the needs of the business, according to The State of Modern Applications in the Enterprise, a 2020 report released by cloud solutions provider Ahead.

IT has plenty of work ahead to achieve those objectives, as 26% of organizations are only at the beginning stages of IT modernization, while 19% have made only moderate progress, according to The State of IT Modernization 2020 report from IDG and tech company Insight.

To move your modernization initiative forward, Carco and other leading technologists advise keeping the following 10 tips in mind.

1. Know what you have

An accurate inventory of all the technologies running in an organization and the corresponding business processes they support is essential to building a successful modernization strategy. It sounds obvious, yet consultants and analysts say many CIOs don’t have a full account of all their IT systems and the work that those systems perform.

Thomas Klinect, senior director and analyst, Gartner Gartner

Thomas Klinect, senior director and analyst, Gartner

“Without that, you’re just going to spend a lot of money and have very little to show for it at the end of the day,” says Thomas Klinect, a senior director and analyst with tech research and advisory firm Gartner, adding that even CIOs who have adequately cataloged their IT systems often miscalculate the interconnected nature of the business processes they perform. “CIOs must understand the whole cradle-to-grave flow of data.”

Klinect recommends IT first invest in enterprise complexity analysis tools to understand how data flows through the organization and then build a modernization strategy based on the analysis. “That’s really the key; that’s what reduces the risk of failure,” he adds.

2. Prioritize projects based on business value

Most enterprise IT leaders face a long list of systems in need of updating. So where to begin? Experts advise prioritizing based on the potential value returned back to the business.

“IT modernization is like boiling the ocean; you don’t know what’s in there, but whatever you’re looking for is in there and we’re going to boil it until we find it. But business modernization is like boiling water in a teacup,” Klinect says.

Shoma Chakravarty, vice president of enterprise architecture, Verizon Verizon

Shoma Chakravarty, vice president of enterprise architecture, Verizon

Shoma Chakravarty, vice president of enterprise architecture at Verizon, says her company works the overall business strategy into its IT roadmap as well as its modernization plans. That approach has helped Verizon identify which systems don’t fit the business needs for agility, elasticity and reliability.

Chakravarty says the company uses that information to prioritize systems that will deliver tangible wins for the business when modernized, while leaving until later systems that may perhaps older but don’t create drag on the business. She points to IT’s decision to prioritize upgrades to its UI/UX technologies, noting that such work aligns with the company efforts to deliver a strong user experience even though the UI/UX technologies themselves aren’t the oldest in the IT portfolio.

3. Calculate total cost of ownership

Identifying potential returns is only part of the financial calculation, Carco says, explaining that CIOs should calculate the total cost of ownership (TCO) for legacy systems and use that figure to help set priorities.

“Sometimes people just look at an application and think because it’s on the mainframe that it’s bad or it’s old so it’s bad; most are, but they should still understand total cost,” Carco adds.

She has worked with organizations that determined a legacy system’s TCO factoring in costs associated with the risks it presents and support needs and found it so low that modernizing the system fell way down on the priority list. On the other hand, one company Carco worked with calculated the TCO for one legacy financial system used for one single function at $150,000 annually. That figure got the business owner to back a modernization initiative.

4. Create a business-backed modernization roadmap

On that note, Michael Spires, a principal at The Hackett Group, an IT service management company, advises CIOs to use their analyses to craft a modernization roadmap that their business counterparts will back.

Michael Spires, principal, The Hackett Group The Hackett Group

Michael Spires, principal, The Hackett Group

For example, he frames modernization projects and associated costs in depreciation terms, just as operations teams do for their investments, a move that helps the finance department and finance-oriented business leaders understand the value of the technology slated for updates. He also lays out the specific business benefits, such as faster time to market or additional capabilities for customers, that modernization will deliver.

“You have to be able to articulate the business reason for it because modernization for modernization sake is a losing proposition for CIOs,” he says. “So focus on what are the business outcomes you’re driving. And if the market changes, you have the ability to change the sequencing of projects and adjust the roadmap.”

5. Take an incremental approach

Modernization is not always rip and replace, nor should it always be a daunting task. Instead, it can be incremental, says Citrix CIO Meerah Rajavel.

“It often comes across as a big rock you have to move, like the idea of an ERP modernization. It can seem very daunting, because they’re not pebbles to move, they’re mountains. So think big but deliver in increments,” Rajavel says. “If you to try to move the mountain, you’re not going to know everything you need to know to move it when you start. It’s an impossible goal, and there’s a lot of risks. The execution has to be iterative, and when it is, the business gets value along the way.”

Meerah Rajavel, CIO, Citrix Citrix

Meerah Rajavel, CIO, Citrix

She points to her team’s work modernizing the company’s sales platform, which needed to be modernized while still running to support the business. She worked with sales and marketing leaders to determine their priorities and then strategized how to deliver those first while determining the next steps on the way to a fully modernized platform.

6. Elimination is a viable option

Modernizing doesn’t always mean updating; it can also mean eliminating.

Carco says she has worked with multiple companies that have accumulated systems with overlapping capabilities, whether due to corporate mergers, to business units having bought their own favorite technologies, or to fears of having only a single vendor to handle numerous critical business functions.

“IT sometimes feels that the business asked for something, so IT has to deliver it and keep it. IT should be empowered enough to ask the business: Does this still deliver a value that’s greater than the costs?” Carco says.

Companies that make elimination and consolidation a branch of their modernization program find that they’re reducing complexity as well as saving resources, Carco says. That money and worker time can then be reinvested into other modernization or innovation projects.

7. Don’t shortchange governance

As companies modernize with a move to microservices, developers can pick the technologies and tools they believe are best for the particular problems they’re solving and services they’re delivering.

“But if you have dozens, or hundreds, or thousands, of microservices and each one is using its own blend of technologies, your IT infrastructure can get wildly out of control,” says tech veteran Patrick Walsh, who is now senior vice president of training and technology with SkillStorm, an IT workforce development firm.

Walsh doesn’t discount the benefits that come with a polyglot architecture but does recommend it come with some governance, where there’s a process, for example, for selecting the technologies required for each service so that the environment doesn’t become unwieldy and problematic to support. “It shouldn’t just be a free-for-all,” he adds.

8. Be selective with microservices

Walsh says many technologists immediately turn to microservices when they start a modernization project, thinking that this approach will be a silver bullet. Microservices work well in many cases, but they can create more problems and complexity than benefits in certain circumstances.

“Microservices aren’t the solution for everything,” Walsh says.

Microservices requires a complex execution environment and a mature devops program both be in place, Patrick says, noting that microservices deliver the most value when shared by overlapping functions.

So an organization whose modernization initiative breaks down an app into hundreds or even thousands of microservices without the right environment and processes in place will find itself mired in complexities it can’t manage or scale. It would be more beneficial in such cases to stay with a larger, well-designed piece of modern software that’s more easily supported, Walsh says.

9. Skip ahead

Although Citrix’s Rajavel supports an incremental approach, she doesn’t think all modernization projects have to follow step-by-step technology advancements. Instead, CIOs should think about skipping a generation. She cites as an example the way many developing countries handled their telecommunication projects in recent decades, skipping over the expansion of landline technologies and instead investing in the latest generation of mobile infrastructure. Rajavel finds as a CIO that she can deliver multifold value to the business by finding modernization projects where she can leapfrog over one generation of technology and go straight to the most cutting edge.

10. Take a product-based approach

Organizations need to move away from thinking of a modernization initiative as a project with a start and end date and more like a product where there’s always room for more work.

That’s the approach Chakravarty says she takes at Verizon; she thinks of modernization as an exercise in continuous improvement and builds her strategy with that in mind.

“Modernization is not a point in time; it’s not a point-in-time effort, it’s ongoing,” Chakravarty says. “Technology is moving so fast, that even what we built yesterday is going to be due for modernization in the near future.”

Copyright © 2020 IDG Communications, Inc.

Learn how leading CIOs are reinventing IT. Download CIO's new Think Tank report today!