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Read moreFuture-Proofing Your Business: Why Application Modernization Matters
According to Gartner, the adoption of multimodal AI technologies is projected to grow exponentially, with an estimated 60% of enterprises implementing multimodal interfaces by 2026.
In today’s fast-paced digital landscape, businesses face immense pressure to stay competitive and relevant. According to Statista, 55% of businesses report inefficiencies in their current systems and acknowledge the need for better security and integration capabilities. For businesses reliant on legacy systems, this challenge is particularly acute, as aging platforms not only hamper performance but also drive-up operational costs and leave companies vulnerable to security risks.
To keep pace with evolving market demands, businesses must embrace application modernization—a strategy designed to enhance performance, reduce costs, and secure future growth. This blog explores the core benefits of application modernization and offers insights into how businesses can overcome common challenges to achieve success.
The Key Factors Driving Application Modernization
When we talk about application modernization, we refer to the process of transforming outdated applications to meet current business needs, which ultimately results in better performance, reduced costs, and enhanced security. Three major factors underscore why modernization is critical:
- Performance: Outdated systems slow down business operations, making it difficult for companies to respond to new market trends and customer demands.
- Cost: Maintaining legacy systems is expensive due to the need for specialized skills and outdated infrastructure that doesn’t scale easily.
- Security: Cybersecurity threats are increasing every year, and legacy applications are prime targets due to vulnerabilities that cannot be patched easily.
The Need for Modernization: Unlocking Business Value
Application modernization is about unlocking new business value. This includes faster time-to-market, improved user experiences, and the ability to innovate and scale at unprecedented rates. Modernized applications enable businesses to adopt cloud-native architectures, leverage advanced analytics, and embrace AI-driven insights.
For instance, re-platforming a legacy system onto the cloud allows businesses to scale seamlessly, optimize their resources, and enhance operational agility. This shift also opens the opportunity for integrating new technologies, like microservices and containerization, which make it easier to develop and deploy new features faster. Modernizing can also involve re-engineering applications to improve their performance, while maintaining the flexibility to add new functionalities as market needs evolve.
However, it’s important to note that modernizing is not a one-size-fits-all solution. Companies must choose from various approaches such as re-platforming, recoding, re-engineering, or even completely replacing or retiring legacy systems for modernization, based on their unique needs and goals.
However, note that at the time when this text evaluation benchmarks were released, Meta had not completed the training of its 400b variant model and so the outcome is based on the comparison of the 400b variant of Meta’s Llama3.
The Challenges: Why 70% of Transformations Fail
Despite the undeniable need for modernization, it’s not without its challenges. According to BCG research, 70% of application modernization efforts fail to meet their intended goals. The reasons?
Many companies underestimate the complexity involved in transforming legacy systems while maintaining business continuity. A lack of skilled workforce familiar with both legacy and modern systems further exacerbates the problem.
Let us have a closer look at why this is important
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1. Building the right strategy
The foundation of any successful modernization effort is a clearly defined strategy. This includes understanding the intent, scope, and desired outcomes from the outset. It’s essential for CFOs and other decision-makers to establish a steering committee that can make quick decisions, monitor progress, and control total cost of ownership (TCO).
A well-thought-out strategy also considers the talent gap. Modernizing applications often requires upskilling or reskilling the workforce, particularly in cloud environments. Having a skilled, cloud-ready team is crucial for ensuring smooth transitions and maintaining operational effectiveness during and after modernization.
2. Creating an operating model
Modernizing applications typically involves integrating new tools and automating repetitive tasks. This not only improves operational efficiency but also enables teams to focus on innovation rather than just keeping systems running. For example, leveraging cloud-based platforms can provide businesses with the scalability and flexibility they need to adapt quickly to market changes, reducing operational friction.
A well-planned operating model ensures that businesses can transition smoothly to modern platforms while maintaining a focus on security and compliance. With modern applications often interacting with a range of systems and databases, security becomes paramount. Implementing automated security protocols such as real-time threat detection and automated patch management ensures that modernized applications are protected from external threats without overburdening IT teams.
3. Cost Optimization
One of the most significant benefits of modernization is cost savings. Maintaining legacy systems is not only expensive but also inefficient. A Forbes report revealed that companies that transitioned to cloud-based platforms saw up to a 30% reduction in operational costs. With modern platforms, organizations can optimize their infrastructure, eliminate redundant resources, and scale more efficiently.
Moreover, modern applications make integration easier. They support APIs and microservices, enabling seamless communication between various systems and processes, which in turn drives operational efficiency and accelerates time-to-market.
Measuring Success: Is Your Modernization Strategy Working?
For businesses to understand whether their modernization efforts are paying off, they need to establish clear Key Performance Indicators (KPIs). These measurable metrics help track the effectiveness of modernization initiatives across various dimensions, such as user satisfaction, system performance, and cost savings.
Key KPIs could include user experience scores, the rate of user retention, or the number of issues reported by users. Regular benchmarking of these KPIs helps businesses understand how modernization efforts are driving value and whether adjustments are needed to achieve strategic goals.
The Future of Digital, Data, and AI
Looking ahead, the role of AI, machine learning, and advanced data analytics will become increasingly important in application modernization. Organizations are already integrating AI-driven features such as predictive maintenance, automated scaling, and smart pricing. However, the challenge lies in scaling these innovations across multiple divisions, regions, or business units.
By adopting an API-centric design and decoupling legacy systems from newer, smarter layers of business logic, companies can build modular, flexible architectures that can scale more effectively. This allows businesses to integrate new functionalities quickly and efficiently, adapting to market demands without overhauling their entire system.
Wrap Up:
The success of application modernization depends completely on the planned strategy that integrates both business and technical perspectives and aligns the desired outcome. Quinnox stands as your ideal digital partner, offering a deep understanding of modernization challenges, industry-specific expertise, and a proven track record of delivering success across various sectors.
Our comprehensive approach ensures seamless transitions from legacy systems to cutting-edge platforms, leveraging the power of cloud, AI, and automation to optimize performance, security, and costs. At Quinnox, we focus on aligning business goals with technical solutions, enabling agility, scalability, and long-term value.
Let us help you future proof your business with a modernized, scalable application infrastructure that drives growth and innovation.
Connect with us today!
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