By Robert Fox, VP Emerging Technologies, Liaison Technologies
Amidst a technology wave surrounding big data, cloud and mobile strategies, one area companies simply cannot afford to overlook is the modernization of existing applications. There is a growing divide between IT perception of cost to modernize, and the actualized savings once enablement factors are factored in. To put it bluntly, IT is comparing apples to oranges when computing cost to modernize vs. cost to maintain existing applications. This is based on a flawed assumption that a modernized version of an application will perform the same function as the old.
In a study done by Forrester Consulting on behalf of Hewlett-Packard entitled Application Modernization: Procrastinate At Your Peril! A Comprehensive Survey On Modernization In The Age Of Mobile And Cloud, four key findings were revealed:
- The top three drivers of modernization are cost, functionality and in-process transformation programs. Cost and outdated functionality are significant drivers at 79% and 76% of firms, respectively, both are up 50% from the previous year. Consolidation/virtualization as a driver doubled this year, to more than 60% of firms surveyed. Formal transformation programs are active in 66% of firms surveyed. The pressure to act has increased markedly in the past year, yet the problems are getting worse.
- Pressure from business leaders increases as IT fails to link modernization with innovation. Ironically, when asked about barriers to modernization, 61% say they simply have higher priorities and 52% say the business doesn’t feel sufficient pain to prioritize modernization. So it’s not a big surprise that 41% of firms lack the funding for modernization. IT leaders have failed to link modernization with innovation and the role that mobile, cloud and big data play.
- The traditional approach to modernization has failed and many firms are seeking external help. Nearly half of the firms surveyed report they sometimes fail to meet modernization scope, budget and due dates, but an astounding 15% of firms say they always fail. As a result, more than 80% of firms will seek help from external providers — either immediately or within the next 6 to 12 months.
- Procrastination kills! If you don’t act, you’re risking catastrophic business impact. Our decades-old approach to modernization is clearly not holistic, comprehensive or effective enough — it treats the symptoms while ignoring the root causes. Half the firms agree that they will lose significant market share and see operational and infrastructure costs spiral out of control if they fail to comprehensively modernize. 57% percent say they will be “decades behind their evolving business processes,” and 61% say their quality of service will suffer greatly. These are the kinds of events that kill companies.
One critical contributing factor is a lack of communication between business and IT leaders within the organization. An organization must work together and create transparency between these business units in order to overcome this behavioral pattern.
The article goes on to make four recommendations:
- Assess your application and technology portfolios to get your house in order.
- Quantify the threats and opportunities in ways that business leaders can fathom.
- Build a flexible, repeatable mechanism to spawn modernization projects.
- Don’t be afraid to ask for the help you need.
I mentioned earlier the technolution that is occurring today, yet, if companies do not address the growing stockpile of legacy applications that exist under its roof, it will find itself in a very rigid and fragile position. The inability to be agile, and participate in the use of modern technology as it pertains to business applications will severely impact a company’s ability to be competitive and remain profitable. Modernize or perish – the credo of IT Darwinism.