The Importance and Benefits of Application Modernization

Legacy software is a system that is no longer effective at serving business needs but is still in use. The lifespan of most IT products is just three years, after which using them can negatively impact the business.

Still, outdated software reportedly makes up 31% of any organization’s technology. Numerous businesses and organizations, including banks, government institutions, and retailers, are using such software mainly because there always seem to be tasks more important than their application modernization.

In this article, we are going to disclose the hazards of obsolete software, list the main benefits of application modernization, and showcase examples of successfully updated apps.

The Basics of Application Modernization

Application modernization is a process of updating legacy software’s infrastructure and architecture and adding new features.

Three approaches to the process are distinguished:

Rehost

This strategy does not involve changes in the application’s code. Developers move the underlying resources of legacy software to the cloud.

While this is the easiest approach, it is the least effective one as it only boosts application performance without transforming the system itself. This approach is usually the first step of modernization rather than its end result.

Re-Architect

This application modernization strategy involves splitting an outdated system into services that can be managed individually.

It is a more difficult approach: it needs more precautions because code changes may affect the app’s external behavior. However, it yields more benefits as well: DevOps, multi-services, containerization, etc.

Rebuild

Rebuilding is the most effective but effort-demanding approach. It involves rewriting a legacy app’s code to develop a native cloud app. It is the ultimate way to receive all the benefits of modern cloud-based technologies: security, scalability, easy and cost-effective maintenance, and so forth.

5 Reasons to Modernize Applications

If there is an application that does its job, why would anyone spend time and money on changing anything about it? At least five benefits of application modernization are worth considering.

#1 Reducing Costs

When it comes to spending resources on app modernization, the return on investment greatly surpasses the initial investment.

First of all, modernization means moving from on-premises data centers to a cloud. The more data you have, the more you have to pay for an on-premise data center. While Big Data is taking over the business, companies have to buy new storage systems more frequently. Such systems are expensive and entail extra costs, such as cooling, space, and electricity costs. Maintenance of big storage systems also requires effort from the IT team.

Secondly, maintaining a legacy application is extremely resource-demanding. American organizations spend over 70% of their IT budgets and 40–60% of IT departments’ time on operating and maintaining legacy software. Such waste can be explained by two reasons:

  1. No one understands legacy code. Typically, legacy software’s code is long and barely clean. The new generation of developers does not learn old technologies, preferring to invest in newer languages and frameworks. So you either have to pay experts in old technology to consult you all the time or to pay extra for training new developers.
  2. Security does not come easily. The support of older technology versions ends when new versions come out. It results in vulnerabilities in the system that hackers love to use. The incompatibility of newer technologies that businesses add to their legacy software creates security gaps as well. Considering that an average data breach costs 3,86 million dollars, it’s reasonable to try to avoid that by investing in timely app modernization.

Downtime, the risk of which is much higher in legacy systems, is another hidden cost. Developers need time to find bugs in lengthy and tangled code. If a system crashes, customers will have to wait for too long for anyone’s taste, and the business will lose money. For example, once a 20-year-old Windows version paralyzed a Paris airport. It’s hard to imagine the damage after planes were unable to take off for several hours, airlines had to pay extra for staying on the ground, customers were late to appointments and other flights, and so forth.

#2 Providing a Better Customer Experience

Business nowadays is the battlefield. There are way too many businesses that offer the same services and products, so what makes brands stand out in this endless cycle of lookalikes? Recent reports show that customer experience matters as much as the price: 74% of clients are ready to pay more for a better customer experience.

Legacy software does not offer a good customer experience.

First of all, communication systems in legacy software have a very limited functionality. Stakeholders expect to have all the data neatly organized in one place where they can access it from any device immediately. Legacy software involves a lot of manual data and access management, which affects efficiency and waiting time.

Secondly, the use and security of personal data is a big concern nowadays. Considering the security problems of legacy software, it is easy to compromise not only the business but also the customers]. It would result in an unsatisfying customer experience and impact your brand severely.

Modernized applications ensure efficient operations, more stable systems, quicker fixes, more advanced communications, and better security for businesses. All of it positively affects the customer experience.

#3 Improving Employees’ Productivity

Google, Apple, and other IT champions of excellent user experience have set the bar high. Employees expect that companies will provide the same high level of technologies in the offices.

More often than not, it is not the case: over 50% of employees are reportedly dissatisfied at work due to the poor software they need to use.

Many employees still work with applications and systems that seem to take ages to respond and perform easy operations. It is frustrating, lowers their performance, and hinders their success. Employees feel more stressed when they know that it is hardly possible to meet the deadlines with such outdated software. It irritates and demotivates them, affecting the overall productivity.

Legacy software is especially damaging to IT departments. Such systems don’t allow much flexibility, so it’s difficult to integrate new features catering to modern business requirements.

Application modernization becomes essential for developing scalable and flexible solutions that complement your business model.

#4 Eliminating Technical Debt

Technical debt grows when the quality of code is compromised due to haste. Tight deadlines often mean missing documentation, bugs, and lack of testing. The change of developers also causes technical debt.

The results of technical debt are the following:

  • growing maintenance costs because of code complexity
  • inability to add new features
  • every part is too dependent on the other so you can not fix something without breaking other parts
  • more time is spent on keeping the system alive than on its further development

Technical debt may grow so big that at some point, developers will not be able to do anything about the code anymore. Non-tech people may wish to cut down on the improvement of something that they can not see or understand, but they will see the dismal outcomes clearly in the end.

#5 Receiving Better Investment Outcomes

All of the points above affect a company’s overall revenue:

  • Reduced costs can improve your bottom line drastically.
  • Free from technical issues, the employees will become more productive and provide a better customer experience.
  • A better customer experience will attract more customers to your business.
  • Satisfied customers are loyal ones, so you can expect a positive change in lifetime customer value and steady business growth.
  • Employee retention will improve as well. A company that keeps forcing legacy code on its IT department will need a new team sooner than later, while hiring a new employee costs $4,000 on average.

If this list of benefits is not convincing enough yet, let’s take a look at several examples of successful app modernization.

Applications that Have Been Successfully Modernized

Carhartt

Carhartt has been a US clothing brand since 1889 that is famous for its jackets, overalls, fire-resistant and hunting clothes. When John Hill joined the company as CIO, he noticed that their IT talent was putting all of their efforts into keeping their legacy software alive. As he says, he wanted them to do more strategic work instead.

Carhartt joined efforts with IBM and developed a solution that allowed them to easily maintain most of the applications inside the company. This freed up their resources for other development projects. They continued the digitalization in other departments, lifting low-value tasks off of them. The company experienced a boost in productivity and efficiency after automating all of the repetitive tasks.

Equinix

Equinix’s area of expertise is data centers and colocation infrastructures. Their legacy system made it difficult to write and navigate the code. Implementing new features was taking a lot of time and effort. In a world where success depends on how quickly companies adapt to a new environment and implement innovations, such delays were a big drawback.

After Equinix modernized their legacy system, they increased the productivity of the IT department, became more flexible, and started to deliver a better customer experience.

Goldman Sachs

Goldman Sachs is a leading investment company both in the US and globally. When the firm was utilizing legacy software, all of its operations were taking longer than they should in the modern world, which affected both customer satisfaction and employees’ productivity.

Modernization was a big step toward better and faster execution and speedy workflow. The company gained back its competitive edge in the market.

Jaguar Land Rover

Jaguar Land Rover designs, manufactures, and sells prime-quality vehicles. However, at some point, the company’s software prevented them from using a CI/CD for faster app development and testing. They had to wait 4–6 weeks to see whether the written code works or not.

After they modernized their app and were able to utilize CI/CD, the feedback loop decreased from weeks to 30 minutes. This amazing result increased the productivity and satisfaction of the development team and gave room for more innovations in a shorter span of time.

The Takeaway

App modernization may be not cheap or easy, but this investment will result in a full return and higher revenue in the long run. You will be able to drive more revenue due to the greater employee productivity and customer satisfaction. App modernization also helps reduce costs that come from complex maintenance of legacy software and on-premise databases. Moreover, businesses may significantly enhance the security of applications.

Leading companies that decided to modernize applications for their employees got splendid results: a boost in productivity, customer satisfaction, and more time for strategic work.

If you want to conduct your application modernization at reasonable cost but with great outcomes, please don’t hesitate to contact Onix. We would perform a thorough audit of your IT systems and choose the modernization approach that best meets your business needs.

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Onix-Systems

Onix-Systems provides IT services in website, mobile app and emerging technologies software development. Check our blog -> https://onix-systems.com/blog