Moving beyond legacy: The C-Suite guide to application modernisation

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Application modernisation is a crucial part of building a future-proof business. How can CIOs drive projects forward to make modernisation a success?

Legacy applications are a thorn in the side of organisations undergoing digital transformation. Many are still reliant on software developed for outdated platforms, using old, outmoded languages and programming tools. These applications may be crucial to the line of business, but they’re also inflexible, hard to update and expensive to maintain. A 2019 study by McKinsey found that legacy systems could account for up to 74% of an enterprise’s IT spend while actively hindering innovation. It’s estimated that, since 2010, corporations and governments worldwide have spent $2.5 trillion attempting to replace legacy IT systems, with $720 billion of that wasted on failed initiatives.

Application modernisation is the only way forward, updating older software to run with newer frameworks and on newer, often cloud-based infrastructures. Yet it’s often difficult for the C-Suite to push modernisation projects through, particularly when the process is likely to be onerous, expensive or lacking in an obvious rationale. It’s incumbent on CIOs to make the case and pilot the project.

The process begins with evaluation. Which applications are in the most urgent need and which offer the most business value? Gartner has isolated six main drivers for application modernisation. On the business side, does the application still meet new requirements? Could updating it enhance its business value? Does it have the agility to keep pace with new demands, or is it in danger of becoming a risk or cost centre?

On the technical side, if TCO is too high, the technology too complex, or security, compliance, support and scalability are impacted by its age, then an application either needs modernisation or replacement.

Once the CIO has made this evaluation, it’s easier to prioritise those applications that pose potential problems or impede the business and new opportunities. For the C-Suite, the technicalities are, by nature, less important than the more tangible business benefits and risks. If executives can focus on how legacy applications have become risky or unsustainable, or how modernisation can add to capabilities and deliver ROI, then it’s easier to get the whole organisation onboard. Gartner senior director analyst, Thomas Klinect, notes that IT leaders who successfully push their modernisation case tend to ‘take a business focused approach, chunking the work to target the most critical business capabilities in multiple waves.’

This means putting together a modernisation programme that prioritises applications in line with business requirements, that defines their impact on the business and the existing or potential issues caused by the technical debt. At this point CIOs can also identify the best modernisation approach for each application, in terms of time, expense and value. While simply rehosting an application, for example, might be the most time and cost-effective approach, it could also mean missing out on the benefits that shifting to a more flexible and agile cloud platform should bring. Rearchitecting or rebuilding to take advantage of those features could result in enhanced productivity or a greater ROI later on. With an approach in mind, CIOs are better able to provide a cost-benefit analysis of modernisation, balancing the effort and expense against the realistic rewards. Once they have the approach locked down for each application, it’s easier to drive the modernisation programme through to its goals.

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