Reasons for Legacy Modernization: Pain Points
From the business perspective, key reasons to modernize are:
- Growing cost of software licenses, maintenance, and operations
- Diminishing base of professionals with legacy skills
- Expanding gap between legacy system functionality and business needs
- Enabling the reuse of reliable and proven applications while protecting past investments.
Industry statistics show that about 70 percent of today’s IT budgets are dedicated to maintenance and support of legacy systems. These budgets are exhausted, which leaves minimal resources for new, critical, strategic computing initiatives.
Furthermore, a relatively new and alarming trend is developing among some of the legacy product Independent Software Vendors (ISVs) that vigorously pursue so-called contract enforcement initiatives. Faced with a diminishing volume of new license sales for their legacy products, these ISVs are aggressively trying to derive additional maintenance revenue from their existing customer contractual agreements. Anecdotal evidence indicates that some of these contract enforcement reviews may result in three- to ten-fold increases in license maintenance fees to unsuspecting customers. Constrained by their strategic legacy applications, customers have no immediate alternatives to paying these skyrocketing license fees.
The technology dimension of legacy pain is too familiar to all of us. We encounter these pain points much too often in our daily business operations. Following are some of the most obvious ones:
- Applications that hold back business process change
- User interfaces that restrain flexibility
- Platforms that inhibit business growth
- Databases that slow down and limit data access
- Languages that stifle the ability to enhance and extend
- Proprietary tools that reduce collaboration.
The upshot is that the need for legacy modernization is driven by business requirements and technological demands. In a rare unity of IT and business organizations, there’s a concerted effort to solve the legacy dilemma.
Legacy Modernization: Key Benefits
Now that we’ve had a chance to consider the factors driving legacy modernization initiatives, we can better define the key benefits of such initiatives.
It’s widely believed that legacy modernization initiatives, when properly executed, result in modern application portfolios that have a significantly improved business fit and a much higher agility to adapt to changing business requirements. Such systems typically offer significantly reduced maintenance costs and accelerate time-to-market for new business models. All of these benefits are further reinforced by a marked reduction in risk factors associated with such systems.
Often, legacy modernization benefits are mapped along three key dimensions: business, resources, and cost. Let’s look at each of these three dimensions: