The Digital Age is Forcing Enterprises to Modernize Their Applications

Technological change has never arrived at the pace it is now. New opportunities are being brought about by technologies of the new generation, such as artificial intelligence, the Internet of Things (IoT), and 5G connectivity, and at the same time, business applications are becoming obsolete. Enterprises of all types are being forced to modernize their application landscapes simply to stay afloat.

Application modernization is a process of updating, re-platforming, refactoring or rewriting legacy applications on newer and modern technologies. The intention is to make developers more agile, with a better scalable and improved user experience. Application modernization has caught on as the average enterprise is using applications that are older than 10 years.

This article will discuss the top benefits enterprises can realize by embarking on an app modernization services initiative:

• Improved Customer Experience
• Increased Productivity and Collaboration
• Enhanced Security
• Reduced Costs and Improved Efficiency
• Better Scalability
• Faster Delivery of New Features
• Integration With Emerging Technologies
• Future-Proof Business Processes

Let’s explore each of these key benefits in more detail:

Improved Customer Experience

Today’s consumers demand highly responsive, intuitive and seamless experiences when dealing with businesses. Legacy applications, however, often have old UIs that are confusing and frustrating to customers. The modernity of apps can greatly improve self-service options and enterprise customer satisfaction.

For instance, an online retailer can add virtual try-ons for cosmetics products to its mobile app. A bank can allow account opening through mobile devices to provide more convenience. An insurance firm can build chatbots that use NLP to answer common customer queries.

The result is higher engagement, retention and growth through better customer experiences. According to PwC research, 73% of customers point to experience as an important factor in purchasing decisions.

Increased Productivity and Collaboration

The low code platforms allow citizen developers to quickly change modern apps, therefore cutting down the need for IT teams for every small change. It also helps front-line workers build their apps to automate redundant tasks and increase productivity and innovation in your organization.

Enabling enterprise collaboration through tools like chat and document sharing directly within apps also allows for more seamless communication between employees and teams. This leads to faster decision-making across distributed teams.

Enhanced Security

Cyber threats are growing exponentially, making legacy systems vulnerable because they lack robust modern security protocols. They may also use outdated components that are known to pose security risks.

Updating apps allows the strengthening of security measures like:

• Multi-factor authentication
• End-to-end encryption
• Security monitoring and analytics
• Granular access controls
• Automated threat detection

Application design should be based on security from the planning stage. Additionally, using cloud infrastructure means that all the world-class security measures and controls are being applied uniformly. According to research, 61% of organizations have experienced improvements in security after cloud migration.

Reduced Costs and Improved Efficiency

Maintaining legacy systems requires significant capital and operating expenses year after year. From keeping outdated hardware to paying more for siloed tools and platforms – traditional applications have become cost centers. There may also be significant waste through duplicate features spread across departments.

By modernizing apps using low-code platforms on cloud infrastructure, enterprises can lower TCO by up to 40%. Savings come from:

• Low-code platforms allow up to 10x faster app delivery compared to traditional coding. This cuts down development costs and backlogs.
• Consolidate platforms, tools, and point solutions into unified low-code platforms like OutSystems.
• Retirement of legacy hardware and data centers
• Scalable usage-based pricing on cloud platforms like AWS, Azure or GCP.
• Less need for specialized skills like coding, allowing the empowerment of non-technical business users to build apps.

Operational efficiency also goes up as siloed on-premises systems get consolidated, leading to less redundancy. Automation frees up thousands of person-hours earlier spent on mundane tasks.

Better Scalability

As business needs change, enterprise apps must scale up or down to meet new demands. However, legacy apps are brittle and require extensive rewrites to scale. Monolithic architectures also impose tight coupling between components, hampering independent scaling.

Modern cloud-native apps are designed for elastic scalability right from the beginning. Microservices architecture allows for independent scaling of components. Auto-scaling features can also scale resources up or down based on usage.

This makes modernized apps inherently adaptable and future-ready. For example, a surge in online orders received by an e-commerce firm during holiday seasons can be easily managed by auto-scaling cloud resources. From a business perspective, meeting customer demand during peak seasons translates directly into more revenue.

Faster Delivery of New Features

Legacy systems often have complex, spaghetti codebases developed over decades. This makes enhancements extremely tedious and risky. Even simple changes may take months to develop, test and deploy into production.

Low-code platforms used in modernization minimize hand-coded components. Features can be delivered 10x faster through visual, drag-and-drop interfaces. Integrations can also be built visually.

This enables faster realization of innovative ideas and responses to changing market dynamics. For example, apps can be quickly enhanced with new emerging capabilities like blockchain, AI/ML and IoT.

Leading companies that foster software-led innovation through faster feature releases – like Amazon, Netflix and Uber – are disrupting their industries.

Integration With Emerging Technologies

From artificial intelligence to IoT to blockchain – exciting technologies are transforming businesses and business models. But legacy apps are disconnected silos, impeding integration with these emerging technologies.

Application modernization breaks down these silos through:

• Open APIs: Legacy systems get wrapped behind APIs that enable integration while hiding complexity.
• Cloud-native architecture: Helps connect disparate apps, data and devices across the cloud.
• Low-code tooling: Enables non-coders to build smart integrations visually.

This integration powers new products and better decisions through data-driven insights and intelligent automation across operations. For example, telematics IoT data from trucks can be integrated with route optimization ML models to save on fuel costs. Smart manufacturing powered by industrial IoT and AI/ML is expected to deliver over $3.7 trillion in value by 2025.

Future-Proof Business Processes

Legacy processes encoded deeply into legacy apps become cemented over time – rigid and impossible to change. This makes it difficult for enterprises to adapt processes to market changes.

By decoupling business logic from application code, low-code platforms offer more agility. For example, business analysts can modify complex loan approval decisions and workflows without needing IT help.

Instead of reinventing everything from scratch, low code also allows the reuse of legacy data and code where relevant. For example, mainframe transaction data can be repurposed to build modern data visualization dashboards.

This balance of change and continuity allows for process flexibility as needed while retaining existing investments. According to McKinsey, such balanced application modernization delivers 2.5x the business value compared to rebuilding systems from scratch.

Overcoming Barriers to Application Modernization Success

While the benefits make a compelling case, application modernization comes with real challenges. Typical barriers faced by enterprises include:

1. Legacy Technical Debt. Decades of complex custom systems with archaic code are difficult to unravel. According to Gartner, 58% of code bases contain over 50% dead code.
2. Tight Integration of User Interfaces with Business Logic. Hard coding UIs, data, and business logic make it tedious to separate components.
3. Scarce Modernization Skills. Only 16% of internal teams have expertise in modern languages like Java and .NET, according to IDC.
4. Mission-critical Nature of Systems. 76% of legacy code is business-critical, so shutting down systems for a long time is not an option.
5. Unclear Return on Investment (ROI). Difficulty in estimating costs and benefits makes the ROI uncertain.
6. Cultural Resistance. Business users cling to familiar legacy processes and don’t want disruptive change.
7. Budget Constraints. Funds may be limited due to competing IT priorities and economic uncertainty.

The key is to take an incremental, low-risk approach focused on decoupling – without aiming for a wholesale overhaul. Some guiding principles include:

• Begin by containerizing legacy code – Don’t rewrite everything immediately.
• Build APIs to externalize functionality and data for integration.
• Use cloud-native services for security, data, and AI/ML rather than building these from scratch.
• Start small and demonstrate quick wins through the modernization of a few less complex applications first.
• Focus on the UI first for maximum impact on user experience.
• Empower business teams to deliver innovation themselves continuously.
• Invest in training developers on modern languages and platforms like .NET, Java, cloud and low-code.
• Automate manual tasks through RPA bots initially before rebuilding process flows.

Consider modernization-as-a-service provided by expert partners to supplement internal skills.

The Future is Modern

The pace of technological innovation is unrelenting. Today, companies that modernize their application landscapes receive enormous benefits and future-proof their business for long-term resilience and leadership. Legacy clings to those who will die.

If they haven’t already, enterprises have the time to modernize now. If the barriers to value realization are overcome with careful planning and the adoption of low-risk incremental techniques, the value can be substantially realized. Partners with deep modernization expertise also play a key role in the success of enterprise modernization.