Dive Brief:

• Businesses are making headway on modernization, but efforts may not be going far enough. Around 70% of organizations say at least one in four applications are undergoing modernization, according to a Rackspace survey released last week. For 24% of organizations, half of applications are in ongoing modernization.

• More than half (54%) of respondents cited improved customer satisfaction as a motivator for application modernization, and 47% also credited employee efficiency and satisfaction. Coleman Parkes, on behalf of Rackspace, surveyed 1,420 IT decision-makers across sectors for the research.

• Delaying modernization can have a high cost for businesses. More than half (56%) of IT decision-makers said delaying application modernization resulted in failure to meet compliance requirements and 51% reported inability to scale critical services when required.

Dive Insight:

Businesses undergo application modernization to bring older software up to speed to current computing standards. The effort usually fits into larger digital transformation goals. 

"If there’s one overarching driver of application modernization, it's the need for the flexibility and agility required to integrate IT technologies in a way that aligns with business demands," Deloitte Application Modernization Leaders Marlin Metzger and Thorsten Bernecker wrote in a blog post. 

But barriers persist. For 28% of respondents to the Rackspace survey, the fear of impacting customer experience is the top hurdle delaying modernization, 26% said entrenchment of legacy IT systems and 24% said the need to work within budget constraints. 

Gartner recommends a three-step process to evaluate how to approach application modernization:

• Evaluate legacy systems through the business and IT perspectives.

• Analyze modernization options by ease of implementation. 

• Choose a modernization approach with the highest effectiveness and value to the organization. 

Yet a cultural shift may be the necessary foundation for any modernization effort before weighing further options. Four in ten (44%) of technology and business decision-makers believe extensive talent structure changes, such as stronger diversity and inclusion strategies or training and development programs, are necessary for successful digital transformation, according to a TEKSystems survey.

"There are also issues of costs, particularly when modernization is being pursued in a coexistence strategy, in which the old and new exist simultaneously for a while, with costs being incurred for both on an ongoing basis," Bill Martorelli, principal analyst at Forrester, told CIO Dive via email.

Tech leaders face pressure to produce results. Dragging out modernization without tangible results could even threaten organizational change, according to Martorelli.

"I would recommend that tech leaders optimize for time-to-value by emphasizing quick wins and planning [in] a comprehensive manner including the need for organizational change management in their modernization approach," Martorelli said.

Martorelli recommends hiring an outside party to help gain momentum and build acumen alongside using well-known approaches to avoid ongoing costs of the coexistence approach.