What You Need to Know About Application Modernization

The importance of modernizing your legacy applications

In a word, the one objective for IT in the year 2021 is agility. That is why organizations are rushing to modernize their legacy applications in the cloud. Application modernization is the process of taking existing legacy applications (for example, Oracle E-Business Suite, PeopleSoft, or even home-grown systems,) and strategically modernizing them in a way that integrates and unifies every aspect of the underlying business process. This ensures that trusted data can be available to anyone in the organization who needs it.

Application modernization is an urgent initiative for IT organizations, which are under incredible pressure right now. They’ve been asked to deliver on business transformations and adjust to sudden shifts in market conditions. I’ve spoken to dozens of customers: large enterprises and SMBs across a variety of industries. Here are some of their stories:

  • A retailer said that in a month they took a 70/30 split between retail store purchases and online purchases and flipped it to a 30/70 split. They did it by modernizing their apps and processes and quickly spinning up new services like BOPIS (buy online and pickup in store). They depended on a fast, nimble platform for integration: Informatica.
  • A manufacturer had to onboard a new supplier and shift a core material acquisition to that supplier. This shift would have tied up their supply chain systems for months, but Informatica helped them do it in a week.
  • Several universities saw the fundamental model of education flip upside down overnight. To accommodate hybrid learning environments they had to streamline communication and enhance digital student experiences. By moving away from point-to-point and application-specific integrations for processes like admissions, registration and career mapping, these universities saw a reduction in cost in addition to the core objective of improving educational experiences. The key? Giving students, faculty, and staff faster access to trusted, real-time data, via Informatica.

How Application Modernization Helps Organizations Achieve Agility

How do you achieve agility? To deliver on new business opportunities, organizations need system and process agility. What is holding them back? Large, monolithic, expensive, brittle, and inflexible applications. And I’m not just talking about a small number of these applications; CIOs I talk to report having enormous application spread, with hundreds or even thousands of applications and data repositories, where a line-of-business manager with a credit card can purchase a new SaaS app and totally redefine the underlying business process.

Application modernization addresses the urgent need to evolve to modern, cloud-native applications. Whatever your starting point, you may be looking at one (or all three) of the following paths:

  • Adding APIs to extend the life of legacy systems. This may be the easiest route to take, but is not necessarily the best. APIs alone can’t deliver the enterprise scale you need.
  • Purchasing SaaS applications and services to replace legacy systems. The challenge is to integrate these new apps with your existing business processes and applications.
  • Building new cloud-native apps using microservices. Developing these truly modern apps and services is a goal of many leading organizations. Because of the modularity and scalability of cloud-native applications services, they easily integrate with existing apps, data sources, and business processes to help drive digital transformation. And they are quickly becoming the norm —  by 2023, more than 500 million digital applications and services will be developed and deployed using cloud-native approaches.

Top Application Modernization Challenges

Despite the urgency of modernization, the challenges are significant. In fact, 74% of modernization efforts fail. That’s quite a stat.

I could list a dozen challenges IT leaders face in modernizing their applications – everything from mandates for multi-cloud, CI/CD, and GDPR, all the way through developer expectations for productivity and the use of MLOps. But in my conversations, these five reasons come up most frequently

1.  Business and technology teams are widely misaligned

In many organizations, business groups have run amok, making technology decisions, like buying or developing applications, on their own without consulting IT. This has resulted in a massive number of apps and data stores, many redundant or overlapping in functionality. Cloud use in particular is out of control in some organizations, since anyone with a credit card can procure cloud services or SaaS applications for a department or division. IT is having trouble reigning in these “shadow IT” activities, which leads to runaway costs and inefficient – because not integrated – business processes.

2. New apps aren’t integrated with other applications and processes

The approach of app-to-app, or point-to-point, integrations is simply not an option in a world where hundreds — or thousands — of apps are being spun up by pretty much anyone. Deploying a new application is often the result of, or the cause of, a change in the business process.  Modernization cannot happen if these new cloud applications exist in silos, as this fragments data across the enterprise. Modernization fails if a new modern cloud application brought in for sales automation, human resources, or marketing can’t communicate with a mission-critical legacy ERP application or integrate with its established business processes.

3. Too many organizations take an API-only approach to app modernization

Many organizations simply make existing applications cloud-compatible by slapping cloud APIs on legacy apps and calling it a day. Although this is the easiest route for getting apps into the cloud, these “cloud-washed” apps are difficult to scale. APIs are necessary but not the whole answer. Application modernization often means refactoring and breaking down big, heavy monolithic applications into a collection of small, loosely coupled microservices developed expressly for the cloud.

4. The technology tools are complex

Existing tools to help with app modernization are difficult to learn and use, and require special expertise by trained professionals. Also, until recently, there were gaps in the marketplace for necessary functionality that existing tools didn’t cover. A full 78% of your users say they want simpler, more reliable, and easier-to-use tools. Adding to this problem is the need to expand the number of people capable of developing, deploying, managing, and monitoring applications, integrations and APIs. These tools must allow “citizen developers” to work in harmony with “code developers.”

5. Budget, Budget… Budget!

The biggest constraining factor – the one complaint I’ve heard more often than any other – is budget. Yes, of course, you can solve world hunger with an unlimited budget. In the real world, every single initiative is judged by three dreaded letters: ROI. Terms like time-to-value and total cost of ownership are critically important to your application modernization effort.

To meet these challenges, organizations need an approach to application modernization that enables three key criteria for enterprise success: simplicity, productivity, and scale.


 Want to Learn More About Application Modernization?

On Thursday, February 11, Informatica will host the AI-powered App Modernization Summit. In it, you’ll hear from industry luminaries and real-life customers about proven strategies for application modernization. You’ll also learn about the breadth and depth of Informatica’s AI-powered IICS platform, which delivers the simplicity, productivity and scale necessary for application modernization success.

Register for an event in your region, and be sure to catch the replay if you can’t attend live: North America, EMEA, APJ. We look forward to seeing you there.