Nearly three quarters of organizations (74%) have started a legacy system modernization project but failed to complete it. This is according to new global research from Advanced, which suggests one of the largest obstacles to a successful modernization project is a disconnect of priorities between technical and leadership teams.
The IT services provider’s 2020 Mainframe Modernization Business Barometer surveyed business and technology employees working for large enterprises with a minimum annual turnover of $1 billion across Europe and the United States. The report explores trends within the mainframe market, the challenges organizations face, and the case for application modernization among large enterprises across the globe.
With a lack of success or progress in a large number of legacy system modernization projects, the report also suggests a disconnect between business and technical teams could be to blame. In fact, the primary motivations behind pursuing modernization initiatives varies between those with more business-focused versus technical job roles – as does their chances of success when securing funding for these projects.
The research finds that CIOs and Heads of IT are more interested in the technology landscape of their organization as a whole, whereas Enterprise Architects are more internally focused. More than two-thirds (69%) of Enterprise Architects cite hardware dependency and other technical influences as the primary reason to modernize whereas CIOs and Heads of IT cite business competitiveness (65%), security (58%) and integration (54%).
Despite the apparent business benefits of modernizing, there is a significant disconnect between the desire for technical teams to pursue these projects and the level of commitment they receive from broader leadership teams:
- Only 12% of Application and Infrastructure Managers report receiving full funding commitment from leadership teams for modernization projects – and 56% say this failure to get funding is driven by fear of change.
- More than half (53%) of CIOs and 42% of CFOs get full funding commitments from senior leadership. It suggests that, in order to move forward with these initiatives, technical team members need to substantiate the business case better for these efforts using terms that the broader business team can understand.
“Collaboration is absolutely essential to successful modernization,” said Brandon Edenfield, Managing Director of Application Modernization at Advanced. “To achieve this, technical teams must ensure that senior leadership see the value and broader business impact of these efforts in terms they can understand. Without full commitment and buy-in from the C-Suite, these projects run the risk of complete failure.”
Looking to the Cloud
Despite differences in their motivations for modernization, most respondents agreed on the value of the Cloud in modernization. In fact, 98% of those surveyed reported active plans to move legacy applications to the Cloud in 2020. This push is likely driven by key benefits such as enhanced business agility and flexibility as well as the opportunity to attract new generations entering the workforce who expect advanced technologies. Above all, it offers significant cost savings for IT infrastructures. In fact, organizations could save around $31 million if they modernize the most urgent aspects of their legacy systems.
Brandon continued: “As our world grows increasingly connected, organizations need to get more serious about modernization. If organizations are to adapt to market changes and remain competitive, organizations need to consider legacy modernization as the foundation and starting point of their overall digital transformation efforts. Those who fail to prioritize this shift risk falling behind their competition and significant revenue loss in the future.”
To view the full report, please visit: oneadvanced.com/Modernization2020
The 2020 Global Application Modernization Business Barometer Report was carried out online by Coleman Parkes throughout March and April 2020. The sample comprised 400 people working for large enterprises in Europe and the U.S. with a minimum annual turnover of US $1 billion.
Advanced is a leading international provider of application modernization services with unique expertise in the legacy modernization market.
With more than 500 modernization projects completed worldwide, and 2.5 billion lines of code processed through our solutions we have been driving IT efficiency, agility, and competitive advantage for customers through core application and database transformations for the past 35 years. Over that time, we have helped organizations across all sectors, including the UK Department of Work and Pensions, FedEx and the New York Times.
Within the UK, Advanced is one of the three largest providers of business software and services, with a strong track record in helping our customers journey to the Cloud with solutions for public, private and third sector organizations.
We have a £261m turnover, 20,000+ customers and employ 2,500+ employees all helping organizations create the right digital foundations that drive productivity, insight and innovation – all while remaining safe, secure and compliant.
We simplify complex business challenges and make a difference by delivering immediate value, positively influencing millions of people’s lives. Advanced’s solutions enable a variety of fundamental transactions to take place, including helping care for 40 million patients in the UK, sending 10 million sports fans through turnstiles, managing over £4 billion in charity donations, supporting 2.5 million students and, ensuring 1.2 billion passengers arrive at their destinations on time.
Our international modernization business was expanded with the 2019 acquisition and integration of Modern Systems.