Summary: Legacy applications pose serious problems for businesses. They waste money. They waste time. They hinder agility and keep businesses from capitalizing on modern technology. While application modernization holds the answer to these problems, many modernization projects fail. Learn why, and how you can avoid failure in your modernization project.
Legacy applications create serious problems for businesses. Like what? Here are just a few problems created by legacy business applications:
They are difficult to maintain: Maintaining these aging applications is both time-consuming and expensive.
They stifle progress: They tie organizations to outdated technology, and keep them from capitalizing on the latest trends.
Their talent pool is shrinking: These applications require a legacy skillset that fewer and fewer people possess.
So, what’s the answer?
Enter legacy application modernization. Modernization offers a solution to the problems created by legacy applications. It frees businesses from the constraints of outdated applications.
But…there’s a bigger problem: Most modernization projects fail.
How many projects fail? While the percentages vary depending on the survey, one statistic remains constant: Success rates remain well below 50%.
Today, let’s explore the question. Surprisingly, it’s rarely about the new system, modernization vendor, or methodology. The problems usually run deeper than that. Here are 5 common reasons why modernization projects fail.
1. Broken business processes
Perhaps the biggest question a business must ask before beginning a modernization project: What is really causing the problem? What is really slowing us down, or keeping us from moving forward?
In many cases, the legacy software and systems take all of the blame. In reality, the real problem is a combination of legacy software and broken business processes. Addressing the software problem while ignoring the business processes is a recipe for disaster.
“The only thing systems modernization will do for a company with a broken business process is break it faster,” says Raymond D. Nelson Jr., General Manager at MPD Digital. “Most companies simply don’t understand why their accounting, inventory, finance (pick one) capabilities are so slow, unresponsive, repetitive, painful (pick one). The cause gets blamed on out of date software or hardware or databases rather than a result of how they are really doing business. Blaming systems issues for poor business processes and trying to correct it with new systems never works.”
2. Forcing the business to adapt to new software (not the other way around)In any modernization project, the new software must adapt to fit your business–not the other way around. However, the opposite happens far too often.
Businesses implement entirely new systems without realizing the drastic business changes this new system requires. It forces employees to adapt. It requires changes in business processes. It forces the business to evolve to fit the new software.
For a successful modernization project, the opposite must be true. The software must adapt to fit the current business processes and needs.
“Many companies have evolved complex processes in accounting, inventory, ordering etc,” says Nelson Jr. “ERP systems say they can replace all of them. They can, but ONLY if you change every one of your current work processes to match that of the ERP. Companies drop in the ERP and then find they have people in the wrong place for execution, folks who have no idea how an integrated system works because of previous stovepipes, and employees and a culture that does not match the ERP business model.”
3. Eating the elephant in one bite
“Just get it done and over with.” That’s the feeling that many businesses have towards modernization. Replace the old systems with new systems, and the business will magically run better…right? Wrong.
Completely replacing everything at once delivers such a shock to the business, some can’t recover. Why? Because it doesn’t just change the software. It changes business. It forces employees to change how they work. In some cases, it changes how customers interact with the business.
What’s a better approach? Companies should modernize slowly, as the need arises. Adopt new services, and build new capabilities up that support the business and adapt to current processes.
“Companies think the easy way is to modernize all their systems at one time and get it over with,” explains Nelson Jr. “In fact, for most companies, the best approach may be a modular replacement where each major system is selected from whatever Seller to best match the corporate work process and then integrate the data and information flow. This allows employees to employ a new system that provides the same capabilities faster, and makes sure each module is fielded to match current capabilities.”
4. Adopting a rigid software architectureDo you know why 70% of the companies listed on the Fortune 1,000 list ten years ago have vanished? They couldn’t adapt to change.
In another 10 years, we’ll probably see the same thing. As technology evolution accelerates, we’re seeing a shift in the business world. These days, agility is king.
However, many companies still implement inflexible applications. They replace their inflexible legacy applications with inflexible modern applications. If you want to prepare your business for the future, any modernization efforts must give you one thing: agility.
“If you want legacy modernization to stick, it’s important to build the platform accordingly,” says Himanshu Sareen, CEO of Icreon Tech. “New solutions need to be scalable for growth, expansion, modification and alteration, or they will be extremely difficult to improve upon in the future. In our experience, it’s best to employ a Service-Oriented Architecture which can accomplish all of these goals while keeping the risk of software obsolescence to a minimum.”
5. Failing to account for the end user
Modernization projects must involve both the IT department and the business users. The problem: Many businesses treat modernization as an IT project. The IT department chooses the best solution for their technical needs. But, they don’t consult the end users. They don’t fully understand how the end users actually use the software, and if the new solution fits their needs.
“From years of observations and speaking with both IT manager, C-Level executives and employees, I believe the chief reason for failure is total miscommunication within the organization,” says Orit Pennington, Owner of TPGTEX Label Solutions. “Here is a short scenario – Someone at the organization decides they need to modernize (some of the initiatives comes from the C-level executives, others from the IT department.) They set out to do the project, totally ignoring the functions used by employees in the organization. As a result, systems that actually get built are lacking basic functions that were deemed not needed by the IT and executives.
Very few organizations actually survey their employees to check how they use the system. When you check to see – you find that employees use the system in ways no one have ever imagined. The bottom line is that the organizations reasons for modernizing and the actual needs are not aligned.”
So, what do you think? Is there anything you would add to this list? If so, please share your thoughts in the comments.
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