NeuEon Insights / Business & IT Strategy, Technology Selection & Program Management

Five Planning Practices That Ensure Legacy Modernization Success

While Gartner proclaims digital business maturity has reached a tipping point, research shows many CIOs are still in legacy modernization mode, determining how to move from decades-old, monolithic systems in on-premise data centers to cloud-based, flexible solutions that help them compete in today’s digital era.

Take the story of a large, 60-year old manufacturer we work with. Their 30-year old ERP/MRP solution was written in an early programming language and still runs on an aging, in-house midrange system. It has been customized over the decades, complicating maintenance. Costs are high, and integration is challenging. It’s tough to find skilled people to support this application that contains the “secret sauce” that has distinguished the manufacturer’s products for decades.

This company wants to modernize because the potential benefits are clear. But so are the challenges! There are many paths forward, a high level of complexity, budgeting considerations and a huge risk to the business if modernization strategies fail. And this company is not unique. So many CIOs face similar dilemmas.

While there’s no cookie-cutter road map for firms in this situation, I’ve identified a few top planning practices that can boost your chances of legacy modernization success.

1. Begin with the business case, and let it drive the road map.

This is an important first step. Leaders of successful IT modernization programs understand what’s driving the need for modernization and the business value it should deliver. They develop a clear picture of the business’s current state and a vision for it in five to 10 years. And they articulate constraints and risks the organization will likely face.

They also know modernization road maps often span multiple years and many decisions will need to be made regarding each legacy component. Defining the best path forward can be tricky, and the most successful outcomes stem from decisions driven by two important questions: How will modernization of a particular solution contribute to the company’s vision, goals and objectives? And how will it create business value? Creating a business-centric foundation for modernization provides a framework for making sound decisions along the journey.

2. Establish meaningful metrics.

Business and technology are inextricably intertwined and both are changing rapidly, making cross-functional teamwork more important than ever. And while the traditional metrics of “on time, on budget and meets requirements” can be informational, they tend to become checkboxes that provide little real knowledge of how the organization is performing. During transformation, successful leaders establish a more visionary metrics program, focusing on three categories:

Business Results: These can include sales, revenue, time to market, market share and customer satisfaction numbers.

Team And Organizational Health: This includes employee engagement, cultural change, efficiency and effectiveness as key indicators of overall health and well-being.

Delivery Performance: This involves the “on time, on budget, meets requirements” of yore with the additional measurements of quality, predictability and velocity.

Changing times demand new metrics that really matter to the business.

3. Plan for legacy applications that could be here to stick around.

Often, it doesn’t make sense to replace legacy components, for example, when a legacy solution supports a declining line of business or one that isn’t a priority in leadership’s five- to 10-year vision. Successful leaders know that these old-school components are still critical for the business today. They plan time to understand what it takes to support these solutions and integrate them with other, more modern solutions, and they limit the role these applications play in the organization by moving functions that are better served by other applications. A great example is the modernization of reporting/business intelligence/analytics solutions: While older monolithic systems tend to have limited reporting systems that were purpose-built for specific departments, newer business intelligence systems can be used to replace the static reporting functions on older systems and also allow users to discover new insights within their data.

Importantly, successful modernization leaders allocate time and funds to establish new partnerships as needed to augment teams when legacy skills are lacking. And they develop strong service-level agreements to make sure these aging, but still mission-critical, platforms can go the distance.

4. Create robust transition plans.

Technology big bangs rarely go well, often creating years of strife and anguish and putting the business at risk. Successful change leaders understand this. They break monolithic systems into functional components, replacing them with new technologies in phases. They plan for transition periods with side-by-side operations and a heightened level of post-launch support to avoid downtime for the business. They make sure all teams are ready to support new solutions and that the business is aware of what is happening when, and they ensure plans are in place to retire legacy solutions pragmatically, creating a smooth transition from old to new.

5. Prioritize your people and their change tolerance.

Every organization has a certain tolerance for change. Successful leaders spend time talking with employees at all levels to discuss the change’s potential impact in real-world terms. They hold company meetings, lunch-and-learns, focus groups and one-on-ones to illuminate the risks and gain insights for mitigating them. They find the right pace for their organization and plan change management activities based on what they learn.

They also know that managing the people impact of modernization is perhaps the toughest challenge they face. Organizational changes — new or changing departments, reskilling employees, different reporting structures and added or eliminated positions — all require great attention. And successful transformation leaders invest it, planning thoughtfully. They know people are the lifeblood of any company, and employees deserve respect, due diligence and a clear understanding of where the business is going and why.

Move past legacy.

Legacy modernization is an important job for today’s CIO. A smooth transition can help the business keep up with — or catapult past — the competition. Our story of the manufacturing company ends with a decision to keep some legacy components while building digital, automated functionality around them. What will your road map look like? Contact us today to discuss.