Five reasons organisations are modernising their legacy applications

Daniel Whitmarsh – Head of Consulting Services and Digital Technology, Telstra Purple

Modern organisations are constantly dealing with a raft of persistent challenges, although there are three critical objectives that generally demand the most attention.

First, organisations must be highly responsive to customers. This requires fast, dynamic scalability, with the flexibility to release features that meet user needs as demand fluctuates.

Second, they’re constantly navigating competitive pressures, putting the impetus on the IT department to innovate in an increasingly crowded marketplace, whilst still managing to reduce costs.  Finally, organisations must continuously win new customers, delighting them with applications that meet their needs and keep them engaged in new and exciting ways.

Businesses are meeting these challenges through application modernisation and transformation of their infrastructure. This is paving the way for innovative new business models, allowing organisations to develop unique and engaging customer experiences, embrace remote learning and working, and improve processes for greater agility and reduced cost.

The use of cloud-first applications isn’t slowing down any time soon. According to a 2020 IDC survey, 46 per cent of cloud-based applications were purpose built for the cloud, while 54 per cent moved from an on-premises environment. Additionally, more than half (55 per cent) of organisations currently use multiple public clouds, with 21 per cent saying they use three or more.

A recent IDG survey reveals that organisations see a few core benefits from application modernisation, from transforming siloed systems to promoting business continuity.

Application modernisation is when businesses update and repurpose their software or existing legacy applications to extract more value or better align infrastructure to their needs. This typically involves leveraging the cloud-native services and various hosting options provided by public cloud service providers, such as Azure, AWS and GCP.

Application modernisation can incorporate a few core activities, including:

• Migrating from physical servers to the cloud;
• Refactoring underlying architecture from monoliths to micro-services;
• Moving from IaaS to PaaS based deployment models;
• Shifting application delivery methods from waterfall to DevOps.

Some organisations modernise their applications and delivery structures incrementally due to capital constraints, while others go for a complete overhaul. Whichever way an organisation chooses, they need to carefully consider and align all critical aspects of their IT infrastructure.

Modernisation can also mean different things to different organisations in terms of the business value it generates, with key benefits that include:

• Reduced operational overhead and increased performance efficiency;
• Agile application development and faster feature release lifecycles;
• Cost reduction and increased application availability;
• Enhanced security, proactive monitoring and application insights.

To fully capitalise on the benefits offered by public cloud and ensure systems can adapt to constantly changing requirements, organisations must have a strategy around modernising their applications, as legacy systems can only take businesses so far.

Here are a few key reasons why organisations are modernising their apps as they move into the cloud.

1.       Legacy applications are not built for Cloud

Despite widespread investments in cloud and Software-as-a-Service applications, legacy software still takes up a considerable portion of IT infrastructure stacks. Maintaining these footprints is challenging, as a lot of time and a large proportion of budgets go toward ‘keeping the lights on’, as opposed to driving innovation.

While legacy applications hosted in the cloud can perform to a certain extent, they are generally built to function most optimally on-premise. When these applications are forced to run in the cloud, they run in a limited capacity and often cause more performance issues than business benefits.

Not modernising these applications eventually leads to increased cost and operational burdens that accelerate over time.

2.     It allows you to eliminate technical debt

Technical debt grows when the quality of code is compromised. This occurs for several reasons, such as tight deadlines which can cause missing documentation, bugs, and a lack of testing. The change of developers also contributes to technical debt, which can become more common as applications age and it becomes difficult to find developers who know the programming language.

The consequences of technical debt include

• Growing maintenance costs because of code complexity;
• Inability to add new features;
• Every part is too dependent on the other, so you cannot fix something without breaking other functions of the application;
• More time is spent on keeping the system alive than on its further development.

3.      It provides better customer experiences

Legacy software does not offer a good customer experience. Modernised applications ensure efficient operations, more stable systems, quicker fixes, more advanced communications, and better security for businesses. All of this positively impacts the customer experience.

4.       It improves productivity

Many organisations still work with applications and systems that take ages to respond and struggle to perform simple operations. It’s frustrating, lowers employee performance, and ultimately hinders business success.

Dealing with outdated, slow software is stressful and makes it difficult for employees to meet deadlines. It’s irritating, demotivating and has a direct impact on productivity.

5.       It facilitates cost optimisation and greater ROI

Decisions related to modernisation for any given application typically come down to cost. While there is a cost associated with migrating to newer technologies and architectures, there is also a cost to not moving.

It’s important to explore the benefits of modernisation from a cost perspective to understand its overall, long-term impact.

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

In order to fully take advantage of the benefits that digital transformation and cloud migration offer, organisations need to take a holistic approach and foster an IT-strategy that is purpose built for the future needs of the business.

Legacy applications might continue running for many years to come, although the cost of maintaining them and the subsequent performance impact over time far outweigh any short-term benefits that might be applicable.

This doesn’t mean it’s going to be an easy endeavor. Success will ultimately depend on how businesses execute these migration strategies and align these transformations to their core business objectives.

In the second piece of this two-part blog series, we’ll explore some of the key challenges that organisations face in modernising their applications and outline the critical principles they must follow if they wish to execute a successful modernisation strategy.