Transform your organisation through Application Modernisation - What is app modernisation and why is it business-critical?
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Transform your organisation through Application Modernisation What is app modernisation and why is it business- critical?
What’s inside?
5 What is app modernisation?
An introduction.
7 The risks and pains of not
modernising.
15 The opportunities and
gains of modernising.
25 Key modernisation
strategies.
35 Building a case for
business modernisation.
3 4
What is app
modernisation?
Applications (Apps) are the beating heart of many organisations. Organisations usually retain legacy apps because they fulfil at least
The best are slick interfaces that expedite transactions; the not- one key function - paying a bill or booking a ticket, for example.
so-good can be slow and frustrating and threaten revenue and
add business risk. But you wouldn’t want employees driving cars that keep breaking
down or allow your premises to fall into disrepair. So why let an
Those in the latter category are typically legacy apps - outdated app threaten your business?
essentially those overtaken by newer technology. The term can
apply to a product that’s decades-old or much newer, but the Replacing legacy apps works for some businesses, but not
exact age isn’t really important. everyone wants a clean break.
This is: what was once the latest, greatest technology is now a Many prefer modernisation - overhauling old tech, often piece
threat; your app - or apps - may be incompatible with emerging by piece. That creates a cutting-edge solution for current needs,
software and platforms; they may be difficult to change and and safeguards innovation by allowing for fast, safe and frequent
constrain your business from evolving; competitors embracing updates further down the track.
newer tech are likely providing a more compelling offering;
customers may prefer a better user experience.
So do you want fragile or agile?
There are multiple ways to modernise, each with their
own risks and rewards. We’ll examine these in detail
later on. But first we’ll find out why doing nothing is
the least favourable option.
5 6
The risks/pains of not modernising The challenges involved with modernising your app may seem daunting. There’s time and cost attached to design, execution and training staff in new tech. But old apps carry significant risks that will only intensify over time. Lack of support Many legacy apps were created using languages such as COBOL, Delphi and Visual Basic that are no longer in fashion. Such languages can rely on hardware and software that are no longer supported by the manufacturer. According to Reuters, 43 per cent of banking systems in the USA are built on COBOL and 95 per cent of ATM swipes rely on COBOL code.1 If your in-house experts leave, you can train replacements, but that takes time. Some current - and prospective - employees may find the thought of learning outdated tech less than enticing for career development. Finding someone new with experience might be a struggle - the older systems get, the fewer people there are with the right skills to maintain them. And because you need someone with scarce skills, they’ll likely cost more. Do you really want to be in a position where your app has a crippling problem and there’s no one around to fix it? 7
Legacy technology
can create Erratic performance and security
vulnerabilities for From slowdowns to outages, performance problems create all sorts of
your business, unwanted dramas. They’re often caused by new features, fixes or workarounds
being bolted on to old foundations. Every fresh addition adds a new layer of
including the likes
complexity - turning the infrastructure into digital spaghetti. That makes it
harder, more time-consuming and costly to find the cause of a problem, fix it
of cyber-attacks.
and test a solution - and we’ve already identified the risks posed by a lack of
expert support.
Remember Novopay? The Ministry of Education payroll system generated
negative headlines for years after its long-delayed rollout in 2012 caused
bungled payments to many thousands of school staff.
Legacy technology can present unexpected vulnerabilities too. In the wider IT
ecosystem, extreme examples in New Zealand have included cyber-attacks on
two of our biggest financial institutions.
The NZX was down for days last year, and 2021 dawned with the
announcement that the Reserve Bank’s File Transfer Appliance (FTA) software
had been hacked. According to Stuff, the Reserve Bank was among fewer than
50 organisations using an old version of FTA software created by Californian
company Accellion. The company discovered a P0 (worst-case scenario)
vulnerability in the old version in mid-December and sent a patch to users
inside three days.
An Accellion spokesman described the version of the software used by the
Reserve Bank as a 20-year-old “legacy” system.2
10
Gaining insight from data It’s not always easy collating business-critical information from legacy apps. They tend to rely on clunky software and old hardware rather than easy-access cloud storage. Data drives both strategic longer-term thinking and nimble real-time responses: it allows analysis and informs decisions. Making decisions without it can have major ramifications. Agility suffers Legacy apps limit innovation and your ability to compete. You can’t move fast enough to meet internal demands and are too slow to get things in front of customers. If you want to be competitive, you need to be able to add new features fast. But old tech struggles with new code. Many legacy apps are ill-suited to integration and customers expect a seamless experience involving a large and growing number of platforms. That can mean different parts of your organisation interacting with customers on different platforms in different ways, creating data silos. Legacy apps limit innovation and your ability to compete. 11
Customer experience
Lack of agility Erratic performance and lack of agility can upset your customers and damage
can lose you your brand. 2017 research by Akamai found that 53 per cent of mobile site
visitors will leave a page that takes longer than 3 seconds to load.3
customers, and If you can’t deliver a reliable and evolving service, you’ll likely lose customers
damage your
to a rival offering a faster service that better meets their latest needs and
expectations. That’s particularly true with Covid-19 making people more reliant
brand.
on - and comfortable with - digital interaction. And customers who switch will
almost certainly be less likely to refer you - with a direct impact on your Net
Promoter Score (NPS). People will display a certain level of loyalty but that’s
unlikely to be indefinite, especially when a nimble new player vies for market
share.
Disruptors are, by definition, more agile, unburdened by
outdated systems and thinking. They may not match what
you’re doing immediately, but their ability to implement rapid,
incremental change will win out before long.
Your employees suffer too
It’s not just end users who get disillusioned with poor app performance. Sticking
with old tech can present the wrong image internally too.
Too many organisations have a system that employees refer to in conversation
as if it’s a physical entity stopping them from achieving best practice. The tech
controls them, not the other way round. A builder doesn’t want old tools, even
if they’re replaced or repaired every time they break. Providing the right tools
can boost engagement. And in the wider external world, legacy apps can make
your organisation look old-fashioned, deterring potential investors, partners and
customers.
1
http://fingfx.thomsonreuters.com/gfx/rngs/USA-BANKS-COBOL/010040KH18J/index.html
2
https://www.stuff.co.nz/business/123921564/reserve-bank-hack-bank-may-not-have-applied-patch-in-time
3
https://www.akamai.com/uk/en/about/news/press/2017-press/akamai-releases-spring-2017-state-of-online-
Fortunately, modernisation offers opportunities for tangible gains.
retail-performance-report.jsp 14
The opportunities/ gains from modernising Overhauling legacy apps will generate long-term - potentially indefinite - benefits, not to mention quick wins. That’s particularly so if you opt for a cloud- native solution (modern apps are designed for the cloud, legacy apps are tricky to move and can be expensive to run once there). More change more often Everything starts here. Having the right tech allows you to make fast, safe updates. You can add new features or remove obsolete ones; trial multiple solutions to a specific problem and keep the best; keep or develop a competitive edge; and give users the best experience possible. Leaders can commission frequent, small changes that, over time, lead to big outcomes. Think of apps created by some of the leading players in their respective fields - Netflix, Amazon and Google Chrome have all released many versions of their apps, each with up to dozens of smaller updates. 15 4
Optimal performance Reduced costs
Modernising your app provides a rare opportunity to review its functions. Moving away from legacy apps should reduce infrastructure, maintenance and
Customer expectations change and not every service will still be necessary. It support costs.
may be possible to ditch some and combine others.
You will no longer need hardware on-premise, or at a physical site operated
Streamlining functionality is one way to speed your app. Another is by moving by a third party. By moving computing and storage to the cloud you’ll save on
computing away from on-premise and into the cloud. A third is through those future maintenance; by utilising opportunities offered by modern programming
quick, frequent changes. If they happen often they’ll tend to be small, putting languages, you’ll reduce the cost attached to having developers skilled in
minimal strain on your system and processes, therefore reducing risk. And if inflexible legacy languages.
something does go wrong with a minor update, it should be easy to fix.
Drive productivity
A Forrester Research study found that IBM Cloud
Modernisation means reliability and observability. It’s easier to find the cause of
problems on new platforms and there’s plenty of support available. All that will
Private clients saved an average of US$500,000
give your developers more time to work on exciting new features for the app - (NZ$691,000) on infrastructure and licensing over the
and for other work in your organisation. first three years of adoption.1
Enhanced scalability
Your app might have been built to service a certain number of users - internal as
well as external. Modernising it allows you to meet current demand and allow
your app to cope with increased future demand, both in terms of user-driven
capacity and new functionality.
17 18
New thinking, new revenue Who doesn’t want to develop new revenue streams, particularly if they can complement savings achieved through a move from old tech? Fast, frequent change does more than just improve the user experience. It allows the creation of new processes and monetisable services and the automation of existing ones. New research reported by IT Brief New Zealand2 found that organisations with modern apps are better-placed to navigate choppy economic waters, such as those created by Covid-19. And 78 per cent of respondents in the Asia Pacific region believed a failure to modernise prevents provision of a best-in-class user experience. That research found a similar percentage of Asia Pacific respondents agreed that rigid processes delayed app modernisation, hindering the success of app/ software releases. On the flipside, almost half of respondents in Asia Pacific (44 per cent) believed modern apps allowed organisations to ensure reliable uptime and push quick updates. About a third (38 per cent) felt modern apps continued driving revenue and 31 per cent believed they lowered costs. IT Brief also noted a correlation between time spent on innovation and growth. 1 https://www.ibm.com/blogs/cloud-computing/2019/04/17/forrester-study-roi-application-modernization/ 2 Research conducted by Vanson Bourne and commissioned by VMware https://itbrief.co.nz/story/modern-apps-power-innovation-for-apac-enterprises-vmware-report
Modernising
doesn’t just improve
Real World Examples
performance - it
improves customer
Travel company case study
satisfaction.
ClearPoint helped a travel management company aimed at smaller businesses.
Some customers found that searches were returning results slower than they
wanted.
Modernising a part of their software that talked to third parties speeded
searches, improving customer satisfaction. It was achieved, in part, by
streamlining the way the client’s app was able to extract - and therefore present
- information about fare classes.
Modernising your app provides a rare
opportunity to review its functions. Customer
expectations change and not every service
will be necessary.
21 22App Modernisation:
Our approach
App Modernisation: Our approach
AWARENESS ASSESSMENT
We help organisations We hold an initial workshop to
understand the benefits that understand your existing DESIGN & PLAN BUILD & IMPROVE
can be expected from App application landscape in order
Modernisation including the to understand current pains We go deep to understand the We build, release and
different approaches and and uncover opportunities to requirements, the customer and support, then continuously
strategies that are followed. modernise. user experience as well as the improve and iterate as
architecture and technical elements. required.
Together we prioritise what needs to
be done to achieve the vision and
create a firm plan.
23 24Key modernisation
strategies/using the
cloud to accelerate your
modernisation journey
We’ve heard a lot about moving to the cloud. If you’re not sure of the benefits,
think of it as pay-as-you-go for on-demand delivery of IT resources: you get
what you need when you need it and don’t pay for anything else, such as the
maintenance of physical infrastructure.
But there’s no silver bullet for legacy woes: various
cloud-focused solutions each have different purposes,
risks and costs.
Before choosing the solution that’s right for you, you need to know everything
about your existing system.
That’s not just how it works for customers, but how it works for you. How was
it created? What tech is used to maintain it? How does it integrate with other
platforms? Who are your customers and why do they use it? What works well?
What needs ditching or fixing?
Some apps are relatively hard to modernise, particularly if they’re powered by
monolithic architecture such as Oracle or SAP. Solutions often combine Off
The Shelf products like Salesforce with cloud platforms like AWS and Microsoft
Azure. Organisations can adopt a pick and mix approach that’s low on code and
high on flexibility to create bespoke packages.
26Nevertheless, there’s a decent chance you can retain some aspects of your
existing apps should you need to. Some elements might still be fit for purpose.
Before you can decide, be honest about your goals, now and for years ahead,
and then work out what tech you need to achieve them. If you have multiple
Moving to the
apps, assess their worth and the amount of modernisation required. Those
with the highest worth and requiring the least change should be overhauled
cloud could be the
first.
solution for your
It’s important to understand the new tools you’re considering before making a
decision. You need confidence that new architecture will provide security, allow business.
integration with other systems and scalability.
Before we go through specific options, we’ll note that cloud-focused solutions
are typically underpinned by a DevOps approach.
The traditional Waterfall approach to software development is linear, lengthy
and limits your ability to effect quick, iterative change. It’s a “do it once and do
it right” approach that has become superseded by customer expectations and
the need for organisations to be nimble.
DevOps enables better alignment to agile ways of working and eases pressure
on operations teams. Provisioning and management of tech is automated,
allowing even faster development and releases. Most of us have had emails
from our IT department or service provider telling us that an overnight system
update could impact operations - you don’t get that from Silicon Valley giants
like Facebook and Spotify who release updates as and when they want.
Research and advisory company Gartner has a long list of modernisation
options. Some take longer than others to implement. Broadly, the quicker (and
easier) the approach, the less risk but the smallest long-term gains.
All save money on hardware and ease the risk posed by dwindling support.
27Modernisation options
Rehosting is often called “lift and shift”, lifting core apps from the old Rebuilding is significantly more complex. It requires rewriting every part of
solution - your own physical hardware on-premise or a hosting centre - and an app to retain existing functionality and allow future updates. It will increase
shifting them to modern hardware or the cloud. Changes to the code and exposure to risk while work is ongoing, but offer an opportunity for significant
features are usually limited. This is the quickest strategy but can be expensive change now and in the future, including enhanced integration with new and
and carrywith fewest long-term benefits. emerging third parties.
Replatforming goes a step further, injecting some change into the process. Replacing is the ultimate high-cost, high-confidence approach. You’ll be
It involves optimising part or all of the app between the “lift” and “shift”. This is comfortable that retiring your current app before seamlessly introducing a
still relatively quick and creates a more solid foundation for future change. new product more suited to current - and future - business states can be
done with minimal risk. This does allow a foundation-up re-evaluation of your
Refactoring builds on the above strategies by introducing code changes. product, which can liberate decision-making and quick, iterative change once
This optimises existing functionality and allows new functions. This allows implemented.
multiple development teams to work on separate parts using different
codebases. In turn, this allows increased flexibility and speed. That’s For many organisations, one of the least daunting ways to approach a potentially
often popular with senior leaders who expect that from other parts of the overwhelming change process is to do it in stages: think peeling an onion.
organisation and may get frustrated by lengthy IT projects offering limited
visibility between launch and completion. Like an onion, your app has multiple layers. Deal with them one at a time, fixing
your biggest problem first, before moving on to the next. Eventually you’ll have
Rearchitecting is an extension of refactoring that requires more done it all - or as much as you want to - in manageable stages.
recoding and, therefore, time and cost. It bolsters the DevOps approach with
Microservices, breaking the app into constituent parts, each with their own
stack. However, short-term impacts carry more long-term benefits: new code
allows significantly improved leveraging of the app platform through new
functions and capabilities, while retaining the ability to make continued and Tackle your biggest problems first, to
positive change.
make modernisation more manageable.
29 30How it works:
The App Modernisation process
How it works: The App Modernisation process
Understand the CX and Review existing system and
requirements, then refine develop new architecture Detailed design of Features are built in New features are continually
the product design and model. Plan features and features by priority. order of priority. released and supported.
user experience. migration delivery priorities.
31 32Real World Examples
Digital transformation of Air New Zealand
It’s easy to forget that Air New Zealand was on the verge of collapse less than
two decades ago. But since being renationalised after the 2000 Ansett buyout, it
has become a key success story for “New Zealand Inc”.
Transformation has been achieved through customer-focussed outcomes driven
by digital possibilities.
Popular - and headline-grabbing - functionalities added to the master app have
included letting lounge guests order coffee on arrival and parents log details of
unaccompanied children taking flights.
The separate Grabaseat app was a standalone success.
Air NZ achieved change through fleet-of-foot bespoke solutions. It identified that
buying from a global software vendor would leave it beholden to their roadmap
for change and sourced specific solutions for specific challenges.
34Building a business case for modernisation Although modernisation strategies allow effective, incremental change, you’ve got to start somewhere. How do you decide where? Take a snapshot Start by getting a handle on how things are right now - and how current business priorities are impacted by the state of your legacy app. 1. Map the app: Understand exactly how your app interacts with your infrastructure. For any given function, what hardware is involved? What software? 2. Support report: Detail how each part of the infrastructure is supported, either in-house or through a third party. If the former, are there any gaps in knowledge? It may be that there are but a related problem hasn’t arisen - at least yet. If the latter, how long will it last? And are there any feasible alternatives? 3. Let’s get critical: Assess how important each function is to your organisation. You may be able to lean on metrics such as revenue or the number of times a specific transaction is completed via your app as opposed to your website. 35 4
Future-proof your
modernisation 4. UX appeal: Consider the user-friendliness of each function and how many
people use it. Is it broken or just slow? Is it even needed anymore? It may have
strategies - you
been when the app was created years ago - it may not be now.
don’t want to be in
5. Future facing: Conversely, investigate new functions you know are needed
or are considered desirable under current thinking. Can these be created with
the same position
existing infrastructure? If not, can you ascertain best practice for provision?
in a few years.
Make the call
Armed with that knowledge, you’ll be able to set your targets.
1. Not-so-quick wins: There’s little point in iterative change if it brings no
substantial benefit. Consider whether each possible update merits the time, cost
and effort involved. An update that takes a little longer could have a much bigger
positive impact. That’s where points 4 and 5 above are so important.
2. Track record: Ensure you’ll be able to measure the impact of each update
using easy to understand metrics that meet business priorities. Then decide
when you expect positive change.
3. Divide and conquer: Prioritise changes and divide them into discrete work
programmes. Set realistic expectations about the length of each programme
depending on the number of components and available resource and support.
Create a timeline for reporting on progress.
4. Future proof: You don’t want to end up where you are now in another few
years. Make sure you’ve got a strategy for reviewing and making further changes
to each area of functionality you update.
38Seal the deal You’ll need to distil your hard-learnt technical knowledge into an easily understood proposal. Whether you’re trying to convince senior leaders or a board of directors, it’s unlikely everyone involved will have a similar level of expertise. What’s the why?: For each proposed update state succinctly what you’re going to fix and the benefits for the organisation. We looked at the benefits in section 2, but to recap they include improved app performance, higher productivity, financial savings and enhanced innovation. Money matters: Be open about the cost of the initial update and ongoing upkeep. If applicable, compare it to the cost of maintaining the function in your legacy app - the number of people hours currently required may be worth a tidy amount and considerably more the cost of retraining relevant staff. Full disclosure: Your proposed timetable for change should include all the ways to measure success that you’ve already considered. A programme of app modernisation will likely require buy-in from multiple parts of your organisation (executive, IT, finance, etc). Transparency will increase understanding and help you celebrate success. Pick your partner This is a complex journey that you shouldn’t make alone. It’s likely to involve significant change and affect multiple parts of your organisation. However strong your understanding of the issues involved there may be things you haven’t thought of. It’s well worth working with a highly skilled partner, one who knows the journey end-to-end, who has done it many times with many customers, who has achieved outstanding and easily measurable results. 39
It’s time to modernise.
With more than 13 years experience, ClearPoint are market leaders in App Modernisation. From
planning, to designing, to implementation, we’re your full service partners, dedicated to making
modernising your technology a success.
Our team lives and breathes application design and implementation every day. What’s more, we have
worked with some of Australia and New Zealand’s largest and most respected enterprises.
Are you ready for your digital future?
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