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Application modernization – Five driving factors

Enterprise needs keep evolving, making existing applications effectiveness questionable. Aging application portfolio and legacy systems need to be assessed for modernization. Application assessment for modernization will have a two-pronged approach. First, identify the driving factors for application modernization and assess the level of overhauling required for modernization of the application portfolio. Several factors drive application modernization:

1. Functional factors – An application’s functionality tends to have gaps over a period of time because the product features and capabilities fall short of:

a) the changing market and customer preferences

b) multi-dimensional evolution of business needs - geographical spread, multi-language support, extending vertical industry portfolio, etc.

c) competition

d) R&D. Functionality is one key consideration in gaining a competitive edge. Gaps are related to functionality, and will also impact the competitiveness of the business and their enterprises.

2. Non-functional factors – Non-functional factors will degrade an application’s performance and adversely impact the corporate brand image, customer satisfaction, and trust.Examples of non-functional factors are

a) Security breaches, data losses and ID thefts, e.g. Personally Identifiable Information (PII) and Protected Health Information (PHI) data losses

b) Legal and regulatory compliance requirements, e.g. SOX, PCI DSS compliances.

c) An application’s inability to scale for the growing needs of user activity, visiting traffic and response times.

d) New application performance benchmarks arise due to competition or customer requirements.

e) Infrastructure bottlenecks leading to application downtime/crash, etc.

3. Technology – Advancements in technology is yet another key consideration. Technology trends challenge the existing applications as well as the development and implementation methodologies. Some of the recent significant technology trends are

a) Service oriented architecture and style of development, which adds a lot of merit for agile business applications, and applications that require frequent system changes.

b) Cloud computing for application development in private clouds and cloud based services to deliver information, business processes to customers and partners.

c) Social computing and the use of social software and social media to facilitate integration with external communities.

d) Mobile commerce which is driving mobile applications and platforms; the mobile applications are designed to operate flexibly on both desktops and handheld devices. Several technology advancements make aged and legacy applications obsolete or misfit for the business needs. Changes in consumer technology also impel changes to the enterprise applications and the underlying technology.

4. Skills – Skills availability for the technology and domain of the application is also a key factor for assessing the application portfolio. Key consideration for resources will be

a) Challenges in talent acquisition and retention due to shortage of skills in the technology used.

b) Greater annual resource requirement (full time equivalent staff) for the application development, maintenance and support in comparison to new applications in the market.

c) Cost and effort in knowledge management of the resources.

5. Vendor issues – Consideration of the application vendor’s financial viability, the scope for innovation, market positioning, and monopolistic practices around pricing become key assessment factors for application modernization. Sometimes the application vendor is challenged to overhaul the application. Vendor issues become all the more important when the application is mission critical and has an important bearing on revenue generation.

Although these issues are all reasons for application modernization, a company needs to assess their decisions carefully. Enterprises need to guard agains

a) Assuming modernization for a one-off requirement from an existing customer and ensure that the functional/ non-functional/ technology upgrade ultimately provides a competitive edge and facilitates new business.

b) Negative impact of the application modernization on cost, time, and customer satisfaction. In addition, sun-setting applications assessment should include the support requirements to existing customers and the customer satisfaction.

Enterprises can leverage the experience and expertise of third party vendors for application risk assessment and strategic guidance. Furthermore, vendors with offshore delivery centers also provide cost effective IT transformation services for application development, QA services and maintenance and support for new as well as sun-setting applications. Whether it is done in-house or in collaboration with a third party vendor, an application portfolio overhauling has to ensure that it ultimately leads to the portfolio’s rationalization and consolidation.