What is Application modernisation?
Legacy application modernisation otherwise known as legacy system modernisation is an essential process for businesses to keep up with the ever-evolving technologies of today. It involves taking outdated and potentially obsolete applications, analysing them, and updating them to meet modern standards. This can mean replacing outdated code or legacy systems with newer ones that are more efficient and secure or integrating cloud computing into the system for added scalability. Application modernisation also includes reengineering existing applications so they will work better within a company’s current IT environment. Keeping up with application modernisation means that businesses remain competitive in their respective markets, while also reducing operational costs.
Read our guide about the hidden costs of legacy technology and how application modernisation can help reduce risks of old technology.
Why modernise legacy applications rather than build new applications?
Modernising legacy applications rather than building new applications presents clear advantages to businesses. Legacy applications are often deeply embedded in a company’s operations and processes, which could be costly to replace if developing a new application. To modernise, however, requires less change to existing systems and allows for flexibility in the customisation of user interface or system processes.
By modernising legacy applications instead of building new ones, businesses are able to benefit from increased scalability, greater cost and time efficiencies, improved agility and an enhanced end-user experience. Additionally, businesses avoid the risks associated with new development cycles and gain access to previous data that cannot be replicated in a newly-built application. It is clear that companies stand much to gain by optimising their age-old systems with modern technologies so that they may stay truly competitive throughout today’s digitally centric landscape.
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It is a fact of life that emergencies are when we see the power and abilities of civil services. The UK’s tax collection body, Her Majesty’s Revenue and Customs (HMRC) is just one example, the set of services launched by HMRC to protect the national economy from the ravages of the Covid-19 pandemic is an example of a public sector body being fleet of foot and able to respond to a crisis. HMRC’s response is also an example of how application modernisation is vital and protects an organisation, or in this case, a nation.
Looking beyond the pandemic, organisations that need to drive more value from their technology investments will prioritise application modernisation, which will deliver both a value increase and enable the decommissioning of old legacy platforms. Not only will organisations see a return on investment, but also an increased ability to respond to events, whether that be a global healthcare incident or sudden changes to the market. HMRC was able to respond to the pandemic as it had the modern application platform in place following six years of application modernisation. So when the call came in spring 2020 to respond to the pandemic, three new technologies to provide job retention, self-employment income support and sick pay rebates were quickly delivered.
Antony Collard, HMRC Director, Strategy, Design, Architecture and Innovation, explained that a cloud computing infrastructure and the Multi-Channel Digital Tax Platform allowed the department to rapidly and securely build three new services “from scratch”. He described the launch of these services to one business and technology title as: “trying to land a jet on an ironing board.” (https://diginomica.com/inside-look-how-hmrc-delivered-its-rapid-covid-19-response)
Application modernisation not only allowed HMRC to respond to a global event, in financial services, but banks that have modernised their application estates are also able to deliver new and demanded services to their customers. Traditionally banks and their application estates have grown through acquisitions and integrations; this results in a monolithic technology stack that lack agility has an integration that is vertical and cannot, therefore, support the business horizontally. At OakNorth Bank, the CIO Sean Hunter has used cloud-native application development to allow the bank to develop an ecosystem approach. This supports OakNorth in vertical or horizontal developmental demands. Like HMRC, Hunter told a recent interview (https://diginomica.com/oaknorth-bank-grows-aws-infrastructure-code) that this enabled the bank to change rapidly when the pandemic hit the UK.
Large financial service providers with traditional application estates have used application modernisation to reduce the risks of a monolithic technology stack and to improve their services; for example, one of the world largest payment processing organisations had 12 individual payment gateways, again a result of an acquisition, each application and gateway was focused on a specific customer segment, this created complexity and technology debt to the business. An application modernisation strategy led to the creation of a single overarching interface that consolidated the 12 payment gateways into one, which was a cloud-based and scalable application with improved security.
In developing the new gateway applications, the payments service provider was able to adopt the latest technology languages (Scala and Akka) and use the Amazon AWS infrastructure platform for increased flexibility. This has led to reskilling of the internal capabilities of the technologists in the financial services provider and, as a result, a move to a DevOps method of working, which both supports the organisation’s business and technology strategy going forwards. For example, new features are delivered within three months, and the financial services provider is able to take on large increases in demand from global clients. Without full-scale application modernisation, it is unlikely that the organisation would have been able to respond with this level of agility.
Application Modernisation & Cloud Native Working Together
These three examples in financial services and the public sector demonstrate how a cloud-native approach to application modernisation is key. Cloud-native application modernisation allows an organisation to innovate at scale and reduce bottlenecks and scalability issues, which traditionally have always hampered application development and delivery. Bottlenecks and scalability have also damaged the relationship CIOs, CTOs, and IT has with the rest of the organisation. We are increasingly seeing organisations that have carried out a cloud-native based application modernisation approach develop stronger and improved relationships with the organisation. This results in closer alignment and more opportunities to be at the forefront of business outcomes.
A cloud-native application estate will deliver high impact across the organisation. With technology teams able to make changes frequently, organisations are able to respond to changes in the market and therefore delight customers.
Application modernisation is not about ripping and replacing – unless necessary. In most cases, application modernisation can extend the life of valuable legacy systems of record, reduce the total cost of ownership of legacy systems and extract greater value for the organisation. Application modernisation must always be led by business outcomes. Therefore it is vital to select applications and partners that are the right fit for the organisation and its culture.
No one wants to plan for a pandemic, but one lesson from recent events is that organisations must have an application estate that is adaptable and can respond to events, both negative and more hopefully positive.
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