Published on November 9, 2023, 5:06 am

Businesses are constantly evolving, and according to futurist Bernard Marr, this rapid pace of change is not expected to slow down in 2023. Marr predicts that digital transformation will continue to accelerate and be facilitated by transformative technologies such as artificial intelligence (AI), the internet of things (IoT), virtual/augmented reality (VR/AR), cloud computing, blockchain, and 5G network protocols.

One consequence of this digital transformation is the need for IT architectures to become more agile and adaptable to changing business environments. Legacy systems are often seen as a hindrance to business initiatives and processes. Application leaders must therefore consider application modernization as a solution to eliminate these obstacles.

While on-premises systems are not expected to be completely abandoned, organizations are increasingly deploying cloud-native applications where it makes business sense. In fact, according to IDC surveys, application modernization has become a high priority for businesses, with over 83% of respondents rating it as such in 2021 compared to only 33% in 2015. This coincides with the migration to the cloud and the shift towards a cloud-first IT strategy.

Application modernization aims to enhance existing business applications by extending their technical functionalities and value creation capabilities for both internal and external stakeholders. A closer look at Hong Kong and Singapore reveals that both regions prioritize application modernization but differ in their progress. In Hong Kong, 72% of enterprises consider it a top priority in 2022, while in Singapore, the figure rises higher at 95%. Furthermore, Singaporean enterprises are taking a more aggressive approach by scaling application modernization initiatives across enterprise functions and driving innovation on these modernized applications.

IDC predicts that by 2025, approximately 80% of organizations will embark on application modernization journeys driven by factors such as data security, organizational flexibility, agility, and productivity gains. Interestingly, skill shortage has also become one of the top three reasons for modernizing legacy applications as enterprises struggle to find talent knowledgeable in these outdated systems.

Gartner suggests that application modernization can be driven by two perspectives: business fit, value, and agility; and IT concerns such as cost, complexity, and risk. If legacy applications fail to meet the requirements of digital businesses or lack agility, modernization is necessary. Similarly, if the total cost of ownership is too high or if security, compliance, support, scalability, or other issues arise, it’s time to embark on the modernization journey.

There are multiple tactics organizations can use when approaching application modernization. Gartner identifies options like rearchitecting, rebuilding, refactoring/migrating to a new runtime platform with minimal code changes, or completely replacing the legacy application component altogether. Each option carries its own costs and risks, so organizations should carefully weigh their choices based on desired outcomes.

In the Asia-Pacific region specifically, IDC’s research indicates that integration with modern development tools (IDEs, DevOps toolchains), accessing legacy data/functions through APIs, and replatforming are the top three modernization tactics being considered by enterprises. There is a growing trend where innovation is being layered on top of legacy applications without fundamentally altering the underlying codebase. For example, lifting and shifting a legacy application to a cloud environment can provide immediate benefits while paving the way for future enhancements.

Application modernization remains an ongoing journey that requires a combination of tactics for success. The key lies in leveraging technologies such as cloud computing, containers/virtualization, DevOps practices,and Agile methodologies to maximize value from these initiatives. It’s important for organizations to assess their options carefully and choose strategies that deliver meaningful impact with minimum effort.

In conclusion,application modernisation is crucial for businesses seeking to transform themselves in this rapidly evolving digital landscape.It facilitates agility,fosters innovation,and enables businesses to keep up with changing customer expectations and market demands.Adopting the right tactics,prioritizing the drivers of modernization,and leveraging technology can position organizations for long-term success and value creation.

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