In an ever-competitive marketplace, app modernization isn’t a value-add feature but a fundamental requirement for success. Digital transformation can reduce IT costs by 40 percent, bump productivity by 40 percent, and increase customer satisfaction rates by 30%. Unfortunately, fewer than 30 percent of modernization attempts succeed.
Why? Because companies often fall into the trap of scaling too quickly. They pour a significant amount of capital into trendy platforms, based on nothing more than mere promises. This often leads to cost overruns and bland tech stacks that fail to meet niche industry requirements. Chances are, you haven’t yet pursued digital transformation. Your current tech works, and your team is familiar with it.
So, is change necessary?
The answer is, yes. Digital transformation isn’t about mass-scale changes or trendy new solutions. Companies that win digital transformation start by modernizing their core apps — not replacing them.
What is App Modernization?
App modernization involves transforming legacy apps into future-proof, cloud-native solutions using infrastructure deployment plans, container-based workloads, and a variety of cutting-edge IT techniques. The raw benefits of modernization are profound.
In healthcare, IT modernization can prevent up to 95 percent of adverse drug reactions. It also reduces the risk of death, improves quality-of-care, and decreases end-to-end costs by 7 to 11 percent.
Similarly, oil & energy companies that have implemented app modernization see 2 to 10 percent improvements in yield and 10 to 30 percent reductions in costs. And, energy isn’t the only industry that has benefited from app modernization.
According to several Deloitte surveys, higher education leaders are realizing cost savings and improved student learning outcomes from digital transformation. In other words, app modernization provides tangible and deep layers of value to nearly every industry.
Unfortunately, many companies assume that app modernization requires massive budgets and a multi-year timeline.
When your company hears the terms “digital transformation” and “app modernization,” it’s easy to think about grandiose, large-scale deployments that single-handedly transform a business overnight. That’s almost never the case. Most digital transformation campaigns occur in small, purpose-driven chunks. For example, your company may modernize a mission-critical finance app first and follow that up with point solutions and integrations.
In fact, McKinsey suggests digitally transforming in “bite-size” portions — noting several energy companies that made critical transformations using 80 to 90 percent of their original app code. The goal of app modernization isn’t to tear down your core business and replace it with a shiny new one. It’s to purposefully change your core by upgrading critical applications without negatively impacting day-to-day workflows.
Prioritizing the Right Apps for Modernization
Modernizing an app is relatively simple. You hire the right team, set some objectives, and implement your new technology. Obviously, that requires a chunk of time, resources, and energy. Yet, it’s not the most complicated component of the app modernization process. Seventy percent of healthcare transformations fail because of poor organizational health and planning.
Winning your modernization war starts by picking the right systems to modernize. Ok, that’s easier said than done. Many organizations — especially in mid-market healthcare, construction, manufacturing, and other highly-specialized industries — have clunky IT architectures stemming from custom-brewed legacy systems.
They’ve spent years building an intricate web of integrations on custom pieces of technology. So, simply onboarding a cookie-cutter ERP or point solution to replace that existing stack isn’t a feasible option.
In fact, McKinsey notes that most transformations in the oil & energy sector fail due to onboarding solutions that don’t account for the unique challenges of the industry. App modernization is the cure to this woe — but only if you pick the right apps.
So, how do you find the needle? Better yet, how do you find the needle without throwing a torch straight into the haystack?
#1 Start By Analyzing Your Apps
The single biggest modernization mistake is tackling your highest-value app first. That may not be the right move. Monolithic solutions like legacy ERPs that are weaved into the core of your business likely have hundreds of apps connected to them. If you modernize the ERP first, you may lose access to all of the other custom apps and point solutions. That can hurt productivity. Instead, measure apps by both value and difficulty of modernization.
IBM suggests plotting your apps on an X and Y-axis. However, we recommend starting with smaller apps that have a high value. The X, Y-axis can easily be disrupted by ERPs — since they have such immense value, they can skew the distribution. You don’t want to interrupt your workflows by modernizing the heart of your entire stack.
Instead, identify apps with moderately high value and low dependencies. Once you tackle a few apps, you can start to work your way towards your ERP. By the time you get there, your most critical apps will have been modernized. This way, once you modernize your core, you can begin working on peripheral apps without too much impact on your overall core business model.
#2 Outsource, Outsource, Outsource
Unless you’re a massive enterprise with a billion-dollar R&D budget and a jam-packed IT unit, app modernization should be outsourced. You can’t afford to simultaneously modernize and maintain core business practices. It’s a recipe for disaster. The same goes for the strategic layer of app modernization — partner with tech-savvy third-party buying consultants or purchasing experts.
Your goal is to minimize disruptions while maximizing value. Outsourcing helps you tackle app modernization without the massive budget. You can onboard experts, get in touch with high-value consultants, and strategize with true experts. Ideally, you want to find a company that provides both strategy and modernization under the same roof.
Otherwise, you’ll have to hire a consulting company along with an outsourced development company, which simply introduces more communication barriers and costs.
#3 Develop a Plan With Your Technology Partner
Once you understand which apps you want to modernize, strategize with your outsourced app modernization partner to develop a core plan for the modernization process. This should include project goals, resource requirements, any milestones for data or code conversion, and an implementation strategy. Once this plan is complete, your technology partner will handle the bulk of the work.
They’ll rewrite and restructure your apps, provide Ops training, and handle data migration. In addition, they’ll walk you through the implementation stage and offer post-implementation change management services.
Implement Seamless App Modernization With Entrance Consulting
Digitally transforming your company reduces costs, improves productivity, and increases client satisfaction. But, the transformation won’t happen overnight. Start by modernizing your core apps to meet the demands of today’s digitally-charged IT architecture.
Need some help? At Entrance, we provide end-to-end app modernization services coupled with our world-class consulting capabilities. Contact us to learn more about how we combine strategy and technical expertise to bring you the best in digital transformations.