The Top 9 Legacy Modernization Drivers for Enterprise Organizations
Part 2 of a 6 Part Series
Legacy systems create roadblocks that impede digital business transformation, obstructing an organization’s agility in responding to market demands, innovating solutions, and strengthening their competitive edge.
One thing is clear: technology is evolving rapidly right before our very eyes. Every aspect of our lives and the society we live in is touched by these changes. There’s no sign of a slowdown in sight. The microcosm of software development is experiencing the same thing. Organizations require speedier development philosophies to get their services and products to market faster than ever to remain competitive and relevant in the marketplace.
Business agility is the new source of business value.
We’ve known this day was coming for a long time. As developers faced the turn of the century, they started to question and criticize the popular processes and assumptions at the foundation of their field. Concepts like Waterfall development methods, having highly detailed requirements before starting development, and designing comprehensive architectures came under fire. In the mid-1990s, a small group of thought-leaders worked on approaches to development designed for speed and change. The term “agile software development” emanated from this group in 2001, launching the software development microcosm into a new era. Since then, the agile philosophy has become the best practices standard for software development.
As mainframe developers experienced with procedural languages retire at increasing rates, and the cost of maintaining the mainframe rises steadily, organizations are justifiably nervous about the future. These organizations need a strategy that embraces agile development and the cloud, yet balances with mainframe environments until a full modernization of their systems can be completed.
Some organizations are looking to a bimodal IT strategy to solve their problems. Under a bimodal strategy, the organization essentially runs two IT organizations, one mired in the old ways and one pursuing the new. While executing a bimodal strategy can be done and may help an organization manage key systems while adopting new, more efficient development techniques, it is rather complex and costly. The strategy essentially leaves the organization with two IT camps competing for limited resources, yet needing to work closely together. This strategy is designed for the short term; it’s not a strategy you would want to rely on permanently. It’s critical to transform the legacy environment, instead of adapting your methodologies to it, to ensure your organization can meet the requirements of the business and competitive demands of the market moving forward.
Legacy modernization efforts are being driven by specific business outcomes even as business and IT departments both strive to extend the life of existing applications while bringing additional functionality and value to the organization.
Business operations, risk management, and business growth are key driving forces for modernization efforts rather than simply seeking cost reductions from getting off a mainframe. The focus on business outcomes enables IT and the organization to focus their time and investments where the business outcomes are greatest and yet prioritize their modernization initiatives using a portfolio strategy.
“Three out of four Federal IT managers (77%) say application modernization will improve the end-user experience at their agency. “ MeriTalk – Future Ready Applications: The Modern Legacy https://www.meritalk.com/study/future-ready-applications/
Top 9 Legacy Modernization Drivers: Compelling Reasons in the Organization
The following are typical legacy modernization drivers that compel business and IT managers to explore modernization strategies:
Meeting the performance demands of this connected universe is proving to be a challenge in mainframe environments already. When integrating new applications with their older mainframe technology, organizations are seeing a great deal of complexity added to their application delivery chain. With this added complexity comes increasing costs. As data consumption continues to escalate at the dramatic rates predicted, finding lower-cost, more extensible, and more service-oriented alternatives to their legacy systems will be critical for the survival of organizations across industries.
The Internet of Things (loT) is on the rise. By 2020, 30 billion devices are expected to be connected to the Internet, and 40 trillion GB of data is expected to be created. – IDC Predictions 2012: Competing for 2020, Document 231720, December 2011, Frank Gens.
Organizations need to be able to reuse data to avoid recreating or redoing work that’s already been done to optimize their processes and ROI.
There are two types of application integration of importance to most organizations:
- Tightly coupled applications
- Interoperable applications
Interoperable applications are the most frequent type of integration style. The goal is to get diverse applications working together to help the organization achieve its business goals. In today’s business environment, interconnection requirements are standard, and reusability of data is often a top priority.
Reusability, if possible at all, is extremely limited without adequate interfaces to link systems. Legacy applications were simply not designed for this. Older applications are typically highly complex, poorly architected solutions with custom hard-coded interfaces written with limited functionality in mind, making integrating legacy systems very difficult. This keeps existing silos in existence and prevents sharing of information across the organization and between organizations. In fact, integration and reusability may be impossible for organizations wishing to remain in a legacy state without major time and money investments and potentially serious risk to current systems.
On the business side, legacy systems were designed with usability as a secondary consideration since they were internally facing and often come with hard-to-learn interfaces and overall lack of functionality. The result is that business users often spend more time trying to figure out the system or avoid using it altogether, opting instead to manually complete required tasks. This not only costs time and increases employee frustration, but when employees revert to manual processes, information access and security become major concerns.
In many cases, legacy systems have been updated over the years with relatively minimal testing and release note documentation by staff no longer with the organization. When organizations look to update or customize their systems, they can easily generate an operating deficiency — a serious issue for organization subject SOX. If a control is not operating as it should or there is a technical fault present in any systems directly involved with the administration of an organization’s finances, and official support is no longer available, the change can put the organization at risk of a serious SOX violation. As it is C-level management that must bear the legal consequences of these types of SOX violations, modernization should be a major concern of theirs.
According to the US Department of Defense, in 2014 their average mainframe per hour spend was $499.98, a shocking sixteen times the cost of running an equivalent environment similar performance characteristics on a Linux platform. The future outlook is dim with IT industry analysts estimating that most large organizations utilizing mainframes should expect 15–20% annual increases in their systems’ CPU resource consumption. With mainframe usage fees making up nearly 10% to 40% of an organization’s IT budget according to a study commissioned by Infosys, cost savings is naturally a motivating force behind many organization’s legacy modernization projects.
Not only is a cloud-based virtual infrastructure’s cost lower, but its usage model is also the opposite of the mainframe’s. The cost model used in the mainframe world is based on peak utilization: businesses pay a rate tied to the peak usage a system achieves over a billing period, even if that maximum is momentary. In a cloud-based environment, organizations typically pay for usage on a utilization basis and have total control over consumption of computing power in their control dashboard. In moving off the mainframe, organizations benefit from the change in billing model as well.
“Federal agencies spend 79% of their IT budgets or $62B annually on legacy systems. “MeriTalk, “Innovation Inspiration: Can Software Save IT?” 7/23/13
Reducing Code Complexity – Legacy systems have typically been modified countless times by many different developers over the years, resulting in code that is very complex and inflexible, known as spaghetti code. These systems take a very long time to modify and in many cases cannot be changed. Organizations need a way to move these legacy systems into an environment where they can be updated and maintained quickly and easily.
As you look to transition these old mission critical applications to modern technologies and architectures, you must first extract the business rules hidden in the code. Being able to reuse key components from legacy applications can provide organizations with a significant competitive advantage during this time of transition.
Modernize to support competitive differentiators like cloud, mobile, and big data analytics.
Improve customer service
Create new business value
“92 percent of Federal IT managers say that it’s urgent for their agency to modernize legacy applications, citing the largest driving factors as security issues (42%), time required to manage/ maintain systems (36%), inflexibility (31%), integration issues (31%), innovation hindered (30%), and the difficulty finding staff with experience managing/maintaining legacy systems (29%).” MeriTalk – Future Ready Applications: The Modern Legacy https://www.meritalk.com/study/future-ready-applications/
Federal IT managers say the top deciding factors they use when prioritizing which applications to modernize include:
#1 Security risks
#2 Mission criticality
#3 Technical adequacy
#4 Widespread use of application
MeriTalk – Future Ready Applications: The Modern Legacy https://www.meritalk.com/study/future-ready-applications/
Take the Steps for Success
Ready to start on the path to modernizing your software with a practical approach? Using an Agile modernization approach with proper planning and the right people on your team will put you on the path to success. The development team at QAT Global is experienced in modernizing legacy applications and working with clients who have complex environments. Put your next modernization project on the path to success, start the conversation with our development team today.
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