Application modernization services enable a business to adapt to the changing technological environs and thus keep the wheel of business rolling. In other words, application modernization service is about an upgrade from a legacy system to a newer platform. In the past business enterprises have considered technology management to be a distinct function associated with technocrats with hardly any backward and forward linkages to business. Technology largely played the part of production process automation to varying degrees, primarily in the manufacturing sector. Manufacturing automation was all about investment in fixed capital in plant, equipment, tools and machinery. Very often this mechanization was integrated with an assembly line production system, a brainchild of Ford Motor Corporation. This allowed business enterprises to maintain the flow in production, proactively execute inventory planning and reap the benefits of economies of scale. Problems were though observed every time those defects were spotted in the products. But the heavy dose of usage of legacy systems meant that the damage had already been done leaving no scope for any kind of plumbing opportunities. Moreover legacy systems of manufactures posed another problem, that of system upgradation when required. Legacy systems meant that there were no opportunities to tweak the production system with junkyard innovation when the necessity arose. Very often business enterprises had to continue with the age old ragged systems and thus bear losses or revamp the entire system by bringing the production process to a grinding halt. Both these options led to wastage of resources, high opportunity costs in terms of business foregone due to stoppages and delays.
Myopic Vision of the Top Management in Dismissing the Need to Modernize
In the world of software, innovations seldom die. In fact there is always a steady stream of innovations that continues to flow either in the form of new versions of operating systems, languages or hand held devices. An innovation though sells only if it brings substantial value addition to the table. In this context then the natural instinct of a top management business leader responsible for change management is to go with the tried and tested formula and sustain the legacy application systems. Unless new alternatives and up-grades bring real business value addition to the table, it also becomes tough to sell the idea of a modernization requirement to all and sundry. In some cases, enterprises also question the need to modernize or port from an existing system to a new one citing reasons of sustained productivity levels and organizational learning required to adapt. The risk involved in averting the risk of an application modernization is that the bigger picture sinks in very slowly almost at the dead end of competition. By the time businesses feel the need to let go of the obsolete and embrace the new, the new has already become a trend depriving the business of the first mover’s advantage. From here on it is only a matter of keeping pace with competitors, more like still being in the race but the chances of winning are almost nil. The advice here is simple. If at all an application needs modernization, it should be done right the first time to gain a competitive edge.
High Lock-In Costs and Returns on Investment from Legacy Systems
The second big challenge that business enterprises face comes in the form of high lock-in costs and returns on investment accruing from legacy systems. While the first challenge is highly opinion driven the latter is data driven. Software vendors in their bid to retain accounts build elements of high fixed costs into applications thus making a renewal mission a costly affair. Moreover application maintenance services and troubleshooting also add to the fixation of a business with an existing vendor. Moreover businesses also tend to retain obsolete systems in their bid to maximize the returns on investment. While these are important economic considerations, there are inherent dangers in nursing apps this way. First, as businesses sustain with legacy apps the investment drive, coding and migration to new apps becomes even more cumbersome. Second, shying away from app modernization for a long time can ultimately damage the business flow completely when it has to be done. App modernization allows a business enterprise to be ready for a continuous stream of upgrades as and when they hit the market, with minimal coding and capital investment.