February 27, 2020

Build a Strong Business Case for App Modernization – WaveMaker

Choosing the right business cases for your application modernization will raise the likelihood of earning executive support and achieving implementation success.

The organizational benefits of application modernization can hardly be overstated. McKinsey finds that with IT modernization, enterprises increase employee productivity by up to 30% and motivation by up to 40%; they also reduce defects and time-to-market by up to 60%. Forrester finds that IBM clients saw an average savings of more than $500,000 over the first three years of cloud adoption.

Irrespective of whether you’re entirely renewing your legacy application or integrating critical parts of it with a modern app, you can reap significant business benefits from modernization. Yet, often, enterprises fall short of unlocking their complete potential. This is mostly due to one or more of the following reasons:

  • The app you’ve chosen to modernize is less business-critical and more whimsical.
  • You’ve begun your modernization on an application either too big or too small to demonstrate its value.
  • Your modernization project is taking too long before it shows any real result.
  • You don’t have clear metrics for measuring the success of your modernization initiative.
  • You have skeptical executives who have given you half-hearted endorsements.

If you find any of these reasons relatable, you’re in luck. Because, if you have had a failed application modernization project for any of the above reasons, it can easily be fixed with a simple but crucial step: Building a business case.

Whether you’re beginning a pilot project, or you’re modernizing your nth application, a clear, strong, relevant, outcome-driven business case should be the first step in devising your application modernization strategy. A robust business case for application modernization shields you against the risks of failure in several ways.

Focusing on impact

The first step in a good business case would be to identify the right app to modernize, based on criticality, complexity, risks, and available resources, which will make your success both meaningful and impactful.

Working in your organizational context

Not all modernization is the same. Choosing a one-size-fits-all approach is a sure-shot way to failure. Having a strong business case will clearly define the scope of your modernization project, within the needs and possibilities of your organization.

Making results measurable

With a clear roadmap, milestones, and metrics, a business case will serve as a report card for progress. And as your compass in your application modernization journey.

Getting the right people on your side

Executive sponsorship for a transformational project like app modernization needs to be a lot more than just allocating budgets and resources. It needs their whole-hearted investment in ushering a cultural change across the IT organization. To earn that, your business case needs to go beyond the facts and calculated predictions. It needs to demonstrate the tangible and intangible value of doing down this path — be it monetary, operational, cultural, or even in terms of comfort and productivity.

In that sense, a ‘business case’ proposal will make or break your application modernization initiative. From our experience working with global enterprises on app modernization projects, here are our recommendations for building a robust business case.

#1: Identify the application you want to modernize

The most common approach app development leaders take is to first modernize the ‘low-hanging fruit’. No doubt, this reduces risk; it allows you the opportunity to fail fast and fail-safe. But, choosing an application only because it’s hanging low also minimizes the impact its modernization can have on your organizational IT. If the application you choose is rarely used, or costs little money, or does not have any impact on the day-to-day operations of your business, even a grand success might be ignored. 

What you need is a simple application that will yield maximum benefits in a short period of time. Perform a thorough business-driven analysis of your IT assets and choose an application that:

  • Is critical to your business.
  • Is used by a large enough number of users.
  • Is either functionally or technically unhealthy — essentially those applications that are slow, non-performing, or expensive.
  • Is small enough to show results in 8-12 weeks.

#2: Define your metrics

Be clear about what your modernization can and will achieve. Do not oversell the outcomes, which might result in your success appearing underwhelming. But make sure you’re not underestimating either because that can make your initiative appear not worthwhile. Demonstrate the consequences of not modernizing and the pay-offs of doing so. Here are some of the metrics you must consider:

  • Application performance: Improvement in response times and speed for the end-user; as well as a reduction in computational resources used in doing so.
  • Customer experience: Improvement in customer satisfaction (CSAT) and net promoter score (NPS) given by your end-users. 
  • Employee productivity: Time saved with custom workflows and automation.
  • The total cost of ownership: Money saved in building and running your application.
  • Time-to-application: Time saved in the development and deployment of future versions of your modernized application.

#3: Acknowledge the costs

Every technology initiative comes at a certain cost. This might be in terms of existing employee time and IT budgets if you’re implementing in-house. It might be significant project costs if you’re planning to outsource. But there are also indirect costs such as upgrading the maintenance skills you need, educating your users about the modernized application, compliance requirements, etc.

Ensure that you include all these costs in your business case proposal — it demonstrates your farsightedness and vision for the future.

#4: Devise your implementation roadmap

It’s crucial not to run before you can crawl. So, don’t push for all your applications to be modernized at once — if in doubt, go back and read #1. To mitigate risks and learn from your mistakes, implement in phases: Have 2-3 year sequences of updates. Have a clear and achievable timeline for each phase, keeping in mind the technical dependencies any of these might have. But three years is a long time in the technology world. Make your business case proposal dynamic to leverage the evolution in technology or your organizational growth.

In modernization projects, integration is one of the biggest challenges of application modernization. 29% of those surveyed in 2019 The State of Ecosystem and Application Integration Report tired that they fall short of the skilled resources required for managing integrations with current systems and ecosystems. Proactively address this aspect and other challenges in your business case. 

To help you devise a successful roadmap that includes business strategy, IT architecture, technical resources, and processes, we propose our AMT Roadmap for application modernization. The AMT (assessment, maximization, transformation) Roadmap is a three-stage framework that strategically assesses your business applications, maximizes your existing investments, and transforms current systems using highly functional applications to bridge the technical and functional gaps. Using the AMT Roadmap, CIOs and IT leaders can standardize their business operations, improve business processes, and nurture innovation using cutting-edge technology across the enterprise.