Organizations now need to adapt to changing market realities more than ever before. In response to this paradigm shift, 69% of boards of directors (BoDs) have accelerated their digital business initiatives. Cloud has emerged as a key business enabler and it is projected to make up 14.2% of the total global enterprise IT spending in 2024, from just 9.1% in 2020.
Cloud provides an impetus to build an on-demand, scalable business model to drive business results. However, enterprises face many roadblocks in their journey to the cloud. According to Gartner, 90% of application modernization projects through 2025 will fail to drive business results.
Most often than not, organizations view application modernization as a technical change rather than an organizational change. Many application modernization efforts don’t attain the desired business benefits because the people, process, and cultural aspects of the change are not factored into the IT project plan. According to the 2020 Mainframe Modernization Business Barometer report, 74% of organizations failed to complete legacy modernization projects due to a disconnect between leadership and technical teams.
To address these challenges, we have built a three-phase approach for application modernization, which maximizes business benefits for our clients: Discover, Transformations, and Operations.
In the “Discover” phase, we help our clients build a roadmap and business case for modernization. In the “Transformation” phase, we help clients to re-architect their applications to maximize digital agility. In the “Operations” phase, we help them optimize and scale for agility and cost savings.
In this blog, the first of a three-part series, we focus on the “Discover” phase of our application modernization approach.
Start with an assessment: Critically analyze the current IT landscape across various parameters, such as application portfolio, costs, cloud, and digital readiness and resource allocation. Grouping apps into buckets based on parameters, such as cloud suitability, criticality, and risk can help shape the application modernization strategy from cloud migration to consolidation.
Build a business case and roadmap: When planning a modernization initiative, it is vital to align business objectives with IT assets. Leverage frameworks such as Gartner’s PACE-layered Application Strategy to categorize the value of applications, and the pace of change as well as what to invest, eliminate, and consolidate. If cost savings is your business objective, on-prem costs associated with virtual machines and databases can be compared with cloud hosting and pay-as-you-go consumption models to drive IT decisions. To drive agility and responsiveness, make initiatives such as DevOps and automation part of the execution roadmap. Applications that are part of an organization’s system of innovation will warrant investment in people and processes to maximize business value.
Select the right modernization approach: Based on findings from the assessment phase and business case, select the right application modernization approach. In a simple scenario, companies may choose to rehost or refactor applications to run on cloud. Based on business criticality, some applications may need to be rearchitected or replaced with a cloud native/SaaS-based application.
Change your management plan: Application modernization projects are not just about technology but also about people, processes, and culture. IT leaders must design a new organization structure and invest in resource upskilling to support their transformation efforts. A combination of workshops, meetings, and knowledge-sharing sessions is essential to drive alignment across the organization.
When it comes to application modernization, there is no one-size fits all solution. The choice of approach depends on the IT landscape, business case, and roadmap.
Watch this space for my next blog on the “Transformation” phase of application modernization.