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Modernize Your Applications
Justify modernizing your application portfolio from both business and technical perspectives.
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ANALYST PERSPECTIVE Applications have a shelf life. They gradually lose their value and supporting technologies will become obsolete. Modernization will eventually become a need. However, organizations are struggling to determine when and how to execute modernization given the high perceived investments in effort and resources. In some cases, simply modifying steps in a business process can drive more value than migrating code. Legacy applications are often viewed as natural choices for modernization. However, rationalization insights and diagnostics may reveal modern applications are poorer performers than legacy applications in your portfolio. Given the hidden dependencies and costs of legacy applications, the risks of undertaking modernization may outweigh the benefits. Therefore, selecting the right application is critical to ensure your investment in modernization is sound. Andrew Kum-Seun, Research Manager, Applications Info-Tech Research Group
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Our understanding of the problem
An applications director who oversees the organization’s application portfolio and is looking to build a case to improve its health with modernization. A CIO who is looking for ways to optimize the efficiency and effectiveness of business units with applications. Create a business case for modernization. Develop multiple alternatives for modernizing applications that are aligned to your business and technical constraints. Understand the business and technical drivers, and external factors that are pushing you to modernize. Application teams in understanding the scope of effort and risks to modernize applications. Business stakeholders who are looking at modernization to support new business capabilities and evolving technologies. Gain a solid understanding of the various dependencies and risks that exist in your current application stack. Identify opportunities where new or modernized applications can enhance value delivery.
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Executive summary Business agility is essential to stay competitive. However, the application portfolio of many organizations cannot sufficiently support the flexibility and efficiency the business needs because of legacy challenges. Organizations are looking for ways to modernize their applications but want to develop options without introducing additional risks. Legacy applications may not be the right modernization candidates. Modernization candidates are the apps that present the biggest risk to the growth and operation of the organization, regardless of age or technical currency. Business capabilities can be extended with modernization. New technologies can create new opportunities for business agility and resilience to changing market conditions. Status quo is a viable option. Avoid introducing new business and technical risks and costs if the anticipated benefits cannot justify your modernization options. Dependencies among processes, applications, and systems can generate significant repercussions from small changes to legacy applications, risking business disruptions and system stability. Stakeholders are often resistant to change as they fear a loss in productivity and business discontinuity. The “why fix it if it isn’t broken” thinking leads to significant difficulty obtaining modernization buy-in. Justify the necessity for modernization: Gauge the alignment of your application portfolio to business and technical drivers and evaluate your portfolio’s influence from external factors (e.g. changes in laws and industry frameworks, evolving technologies) in order to strengthen your choice of an application for modernization. Reveal the risks and constraints of modernization: Diagnose the composition and dependencies of your application to reveal existing capability, process, UI, code, data, integration, and infrastructure constraints, opportunities, and issues. Communicate the business and technical goals of modernization: Effectively explain the risks, benefits, costs, and plans to your modernization stakeholders for buy-in. Create modernization alternatives that satisfy business and technical drivers but abide to the business and technical constraints identified in your application diagnostic.
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What are the impacts of keeping legacy applications?
Legacy applications are commonly blamed for restricting business operations and consuming vital IT resources Legacy applications are identified as software that are: No longer suitable for current and future IT and business operations. Based on outdated technologies, such as operating in an obsolete format or on an unsupported system, or for which the ongoing maintenance costs outweigh the benefits. What are the impacts of keeping legacy applications? Legacy applications impede business growth opportunities and consume precious IT budgets in maintenance which otherwise could be used for innovation and new projects. 9 out of 10 IT decision makers claim legacy systems are preventing them from harnessing the digital technologies they need to grow and become more efficient. (100 IT leaders at businesses with more than 1,000 staff were surveyed.) Source: Karl Flinders, Legacy systems holding back 90% of businesses, ComputerWeekly, 2015 According to Nexaweb Technologies, 88% of IT professionals said they have a “problematic” legacy application burden and 57% described the problem as either serious or very serious. (Over 700 people completed this survey.) Source: 2012 IT Application Modernization Survey, Nexaweb Technologies, 2012
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However, hidden costs and risks can reveal both legacy and modern applications as equally painful to manage Legacy and modern applications both involve all of the interaction points and system components working together to deliver value. Many organizations commonly focus on general maintenance to improve the value and use of their applications. As today’s organizations continually evolve their capabilities and processes, many of an application’s hidden costs and risks will begin to outweigh its benefits. Maintenance Tasks to Maintain Business Continuity Licensing Vendor Solution and Support Fees Typical Focus of Applications Support Resources Roles to Address System Issues and Updates Critical Areas of Applications That Were Previously Ignored Business Agility Inability to Adapt to New Technologies or Capabilities Vendor Viability Uncertainty of Vendor’s Roadmap and Future Job Market Industry Does Not Value the Skills For Supporting Applications Laws and Regulations Radical and Unpredictable Regulatory Changes
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76% APPLICATION MODERNIZATION…
Modernization can help revitalize your applications but requires keen eyes from both business and technical perspectives APPLICATION MODERNIZATION… Modernization Requires Careful Business and Technical Considerations Modernize When Appropriate Organizations are afraid that modernization will risk business continuity. The business and technical risks to modernize may outweigh the anticipated benefits, which can indicate the status quo is the best option. In some cases, legacy applications may not be the best modernization candidates. Know Your Constraints Legacy applications can be limited in portability from one system to another and in flexibility to adjust business processes. Business and technical consultations are critical to knowing your organization’s rigidity to change. Develop Realistic Expectations Previous modernization projects may have disappointed stakeholders because of overpromised results. Validating your options against current business and technical complexities is vital to ensure your commitments are achievable. 1 … refers to significant changes which help to extend an application’s lifetime and increase its value. Modernization often involves more extensive changes than maintenance but can conserve significant portions of the existing system. 2 Modernization should be a critical organization objective. 76% of surveyed organizations found that modernizing the application landscape is instrumental to the objective of the business. Source: Application Landscape Report: 2014, Capgemini, 2014. 3
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How Can Modernization Help?
Understand the value application modernization can provide to your organization Modernization has promised the following business benefits1: How Can Modernization Help? Lower costs by utilizing lower-cost technologies that don’t require expensive personnel with specialized skill sets. Transform the business and increase productivity by expanding business capabilities with new functionalities and trends that are unavailable in existing legacy applications. Respond to user change requests and deploy quicker by leveraging modern development tools and technologies. Modernization shapes your applications for the future success of your organization by enriching existing processes or enabling new capabilities. It can enable applications teams to: Easily reuse and scale development artifacts to streamline maintenance updates. Ensure supporting systems can sufficiently support new application functions and load. Readily and proactively prepare for changes in IT and industry standards and frameworks. Leverage modern tools to increase test coverage and automation capabilities. Better support existing and new business capabilities. 1Source: Turning to Application Modernization to Reduce IT Costs and Increase Agility, TechTarget Custom Media, 2014.
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CASE STUDY The New Brunswick Department of Public Safety Challenge
Industry Source Government Fujitsu and The New Brunswick Department of Public Safety Challenge Solution Results The New Brunswick Department of Public Safety (TNBDPS)’s vehicle licencing and registration systems were running on COBOL programs. These programs presented risks to the long-term operations of TNBDPS, as the talent pool was shrinking and the cost to maintain the system was rising. The employees at TNBDPS were stuck in firefighting mode, unable to focus on more strategic initiatives. They needed a system that was more modern, flexible, and easier to maintain. TNBDPS reviewed its business and IT drivers and ensured its modernization initiative was aligned to these drivers. TNBDPS then assessed its 9 individual subsystems and application layer dependencies, and settled on a .NET solution. TNBDPS leveraged a vendor to carry out its modernization initiative. This organization shut down its mainframe systems on a Friday and moved the data over to the new system. By Saturday afternoon, the new systems were up and running. The modernization effort was heralded a success. Not only was the business logic kept intact, but the new systems kept the same user interface, effectively “changing the engine underneath the hood.” Not only is the new platform more resilient and future-proof, but TNBDPS reports immensely lower maintenance costs, and can now handle its own maintenance requests in-house faster, and at a reduced cost. Source: Robert Cyr, Case Study. New Brunswick Department of Public Safety, Fujitsu, 2013.
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Rationalize your applications to justify candidates for modernization
Choosing the right application is critical since modernization can be a significant investment of resources and budget. Pinpoint key areas in your application portfolio where applications are not delivering value with rationalization. Rationalization can reveal critical insights behind your legacy applications Modernization might not be the best option to increase an application’s value. Retirement, retraining, or revisiting of licenses may be better alternatives. An application’s value can be significantly increased by simply streamlining business processes instead of modifying its code and supporting systems. Legacy applications may be performing better than modern applications. The initial focus should be placed on the applications driving down the most value. Application rationalization is the discipline that helps organizations analyze the current state of their application landscape and identify opportunities for improvements to create a simplified, modernized, risk-averse, and agile system which is aligned with business strategies and principles. (Source: Sombit Neogi, Application Portfolio Rationalization, TATA Consulting Services, 2013).
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Use Info-Tech’s AACE approach to build a successful business case for application modernization
The success of application modernization is ultimately dependent on the selection of the right applications and choosing the appropriate methods to drive value. This blueprint will walk you through the steps needed to build a business case for application modernization with AACE (align, assess, create, explain). First, select the application modernization candidate by validating the ALIGNment of your application portfolio to your business and technical drivers and resilience to external factors (e.g. laws and regulations), and selecting the ideal application to modernize. The next step is to ASSESS the stack of your selected application to reveal current issues, opportunities, and constraints that can positively or negatively impact your modernization initiative. CREATE modernization alternatives to enhance the value of your application, considering the business and technical complexities revealed in your assessment. Analyze the benefits, costs, and risks of each alternative to make a recommendation on an alternative. The final step in the process is to EXPLAIN the business benefits, costs, and trade-offs through a targeted business case presentation. This step involves building out the execution plan and a timeline. Align Assess Create Explain
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Effectively communicate the benefits and costs of modernization to business priorities with AACE
The challenge with IT-led modernization initiatives is obtaining buy-in because of the difficulty of convincing the business. Info-Tech’s AACE approach will help you justify the benefits and costs by aligning modernization methods to business priorities and communicating them in the language your stakeholders understand. Business Drivers, Pain Points, and Opportunities Business Capabilities Business Risks End-User Satisfaction Motivation for Modernization Successful Business Case Business and Technical Alignment with AACE Drives Motivation for Modernization Applications Team Drivers, Pain Points, and Opportunities Development Capabilities IT Risks System Integrity
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Accommodate the dependency risks of your modernization initiative with other areas of the application stack Small changes can have massive repercussions to the business and IT if the appropriate steps are not taken to address process, data, and system dependencies. Investigate each layer of your application stack to expose the root cause behind potential business and technical dependencies. In many cases, enterprise applications and systems are not isolated: business processes require data generated from other processes, applications are executed by the same infrastructure, and business capabilities are supported by applications leveraged by multiple departments. Complete a thorough diagnostic of the various layers of your application to help reveal the business and technical impacts of modernization. Infrastructure Integration Data Code User Experience Business Process Business Capability You don’t need to modernize everything. A modernization initiative can deliver significant business value by only involving small-scale changes in strategic areas of your stack without introducing additional risks.
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INFO-TECH DELIVERABLE
Use Info-Tech’s Application Modernization Business Case Template to obtain buy-in from stakeholders for modernization INFO-TECH DELIVERABLE Leverage Info-Tech’s Application Modernization Business Case Template to ensure all decision makers understand the objectives, benefits, costs, risks, and tasks to successfully modernize your applications and improve the health of your application portfolio. Goals: Ensure stakeholders understand business, technical, and external drivers pushing the organization to modernize their applications. Reveal the modernization opportunities, constraints, and existing issues of the application to modernize. Discuss the benefits, costs, and risks of modernization.
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Follow Info-Tech’s methodology to make the business case for application modernization
Phase 1: Define the Drivers for Modernization Phase 2: Define and Assess Modernization Alternatives Phase 3: Complete the Case Step 1.1: Define the Business Drivers Behind Your Modernization Initiative Inputs Applications to modernize Business drivers Outputs Business alignment of portfolio Step 2.1: Diagnose Your Application Inputs Application to modernize Outputs Application diagnostic results Step 3.1: Create Your Application Modernization Plan Inputs List of modernization alternatives Outputs Modernization timeline Step 2.2: Develop Application Modernization Alternatives Inputs Application diagnostic results Outputs List of modernization alternatives Step 3.2: Define Your Modernization Project Metrics Inputs List of costs, benefits, and drivers Outputs Metrics to measure success Step 1.2: Define the Technical Drivers Behind Your Modernization Initiative Inputs Technical drivers Outputs Technical alignment of portfolio Step 2.3: Conduct a Cost-Benefit Analysis Inputs List of modernization alternatives Outputs List of costs and benefits Step 3.3: Recognize Your Project Stakeholders Inputs Business and technical drivers Outputs List of project stakeholders Step 1.3: Understand the External Factors Influencing Your Modernization Initiative Inputs External factors Outputs Current and future concerns Step 2.4: Complete a Risk Assessment Inputs List of modernization alternatives Outputs List of modernization risks Step 3.4: Finalize and Monitor Your Business Case Inputs Work-in-progress business case Outputs Completed business case Step 1.4: Select Your Modernization Candidate Inputs Shortlist of applications Outputs Modernization candidate Step 2.5: Select a Modernization Alternative to Recommend Inputs List of modernization alternatives Outputs Recommended alternative END DELIVERABLE: Application Modernization Business Case Template
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Use these icons to help direct you as you navigate this research
Use these icons to help guide you through each step of the blueprint and direct you to content related to the recommended activities. This icon denotes a slide where a supporting Info-Tech tool or template will help you perform the activity or step associated with the slide. Refer to the supporting tool or template to get the best results and proceed to the next step of the project. This icon denotes a slide with an associated activity. The activity can be performed either as part of your project or with the support of Info-Tech team members, who will come onsite to facilitate a workshop for your organization.
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Info-Tech offers various levels of support to best suit your needs
Guided Implementation “Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.” DIY Toolkit “Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.” Workshop “We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.” Consulting “Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.” Diagnostics and consistent frameworks used throughout all four options
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Modernize Your Applications – Project Overview
1. Define the Drivers for Modernization 2. Define and Assess Modernization Alternatives 3. Complete the Case Best-Practice Toolkit 1.1 Define the Business Drivers Behind Your Modernization Initiative 1.2 Define the Technical Drivers Behind Your Modernization Initiative 1.3 Understand the External Factors Influencing Your Modernization Initiative 1.4 Select Your Modernization Candidate 2.1 Diagnose Your Application 2.2 Develop Application Modernization Alternatives 2.3 Conduct a Cost-Benefit Analysis of Your Modernization Alternatives 2.4 Complete a Risk Assessment of Your Modernization Alternatives 2.5 Select a Modernization Alternative to Recommend 3.1 Create Your Application Modernization Plan 3.2 Define Your Modernization Project Metrics 3.3 Recognize Your Project Stakeholders 3.4 Finalize and Monitor Your Business Case Guided Implementations Review the outcomes of your previous application rationalization project. Discuss the business and technical drivers, and external factors that are motivating you to modernize your application. Discuss the issues, constraints, and opportunities of your selected application to modernize. Assess the viability of the various modernization alternatives. Review your modernization plan and metrics to gauge success. Review your approach to tailor and present your business case to stakeholders. Onsite Workshop Module 1: Define the Drivers for Modernization Module 2: Define and Assess Modernization Alternatives Module 3: Complete the Case Phase 1 Outcome: List of business, technical, and external drivers for modernization Modernization candidate Phase 2 Outcome: Diagnostic of selected application List of modernization alternatives Cost and risk analysis of alternatives Phase 3 Outcome: Modernization plan List of metrics and stakeholders Completed business case
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Workshop Overview Contact your account representative or for more information. Workshop Day 1 Workshop Day 2 Workshop Day 3 Workshop Day 4 Workshop Day 5 Activities Review Your Application Portfolio Discuss the health of your application portfolio using rationalization insights. Shortlist the applications that can be modernization candidates. Define Your Modernization Drivers Identify your business and technical drivers that are internally motivating modernization. Review the factors that are externally motivating modernization. Select an application to modernize. Diagnose Your Application Review each layer of your application’s stack to reveal modernization opportunities, and business and technical issues and constraints. Define and Assess Modernization Alternatives Review the various methods to modernize applications. Develop alternatives to modernize your applications. Assess the risks, benefits, and costs of each alternative to make a recommendation. Complete Your Business Case Create your modernization plan. Define your modernization project metrics. Identify your project stakeholders. Discuss approaches to effectively communicate to stakeholders. Deliverables Current state of your application portfolio List of possible application modernization candidates List of business, technical, and external drivers motivating modernization Selection of an application to modernize Complete a diagnostic of the entire stack of the selected application (from business capabilities to infrastructure components) List of opportunities, issues, and constraints List of modernization alternatives that accommodates application stack constraints Cost-benefit analysis of each risk List of risks for each alternative Modernization plan List of metrics to gauge modernization success List of modernization stakeholders Completed business case document and presentation summary
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