All of us recognize that an important goal of systems modernization is to eliminate redundant and non-value-adding applications to open budget for new, business-critical work. Veteran CIOs know that application portfolio modernization can generate far more benefits than simply eliminating overlapping systems. These industry leaders prefer to start with the development of a higher-level application strategy, which surfaces key business success factors and aligns proposed modernization efforts to critical business strategies. Their modernization approaches will then include tactics such as replacing, retiring, consolidating, or upgrading applications to better meet the needs of the business. Done well, application portfolio modernization will drive down total cost of ownership, reduce business and technology risk, and infuse agility into Technology to more easily support new business strategies and thrusts.
Key steps in an application modernization program generally include:
- Developing the target state blueprint – defining end-to-end business and technology capabilities to support the mission, objectives, and strategies of the business
- Assessing the current state portfolio – determining the extent to which existing applications can support the business direction, and surfacing key gaps which must be addressed
- Opportunity analysis – including potential system consolidation, upgrade, retirement, and replacement options to drive new business value and agility and reduce total cost of ownership
- Modernization road map – laying out the program in iterative waves of business value to accelerate time to market and keep tight alignment with the evolving business strategy
- Mobilize – by leveraging new technologies such as cloud, big data, social and mobile and new delivery models such as SaaS, PaaS, and hybrid solutions to accelerate the deployment of new capabilities for the business
Key Success Secrets
The most successful application modernization programs are financially self-sustaining within the first 12-18 months of engagement. System consolidations and retirements generate savings which can be redeployed to upgrade and modernize target state applications. The tangible business benefits from modernized systems generates additional savings, which then fund the next wave of system consolidation work. Innovative new technology capabilities enrich existing platforms. Business enthusiasm builds with each new tranche of savings.