SUMMARY

Given today’s fixed or reduced IT budgets and an ever-shifting business and IT environment, CIOs and enterprise architects must make pivotal tradeoffs: how much of their budget to allocate to maintenance of legacy systems versus strategically important development and innovation, and how to get the most business value possible from their existing IT investments. Even in difficult economic times, companies realize that in order to become more efficient and competitive, they need to replace restrictive legacy systems with newer, open-standards-based solutions that improve their ability to react to business demand, reduce total cost of ownership, enable consolidation, and minimize reliance on legacy skill sets.

Underperforming legacy applications consume a disproportionate share of resources, with the average company spending 60 to 85 percent of its IT budget maintaining systems that are unable to meet the changing competitive needs of the business. To make funds available for ongoing business needs, IT organizations need to reduce the amount they spend on legacy applications and environments.

However, one aspect of IT that has always been a challenge is how to introduce new technology solutions and integrate them with existing systems without losing valuable data and processes. To evolve to the next-generation IT environment, organizations will want to reuse the content of existing applications and effectively leverage the latest technology solutions -- combining the best of the old with the new. IT modernization is the approach that allows this process to occur.

Modernization -- when companies supplement or replace restrictive legacy technologies with newer, open-standards-based technologies, while retaining the business content stored in their legacy systems -- allows organizations to maximize the use of their existing application assets as they move toward better technology environments. The need for IT modernization is often painfully obvious for any organization that relies heavily on legacy systems -- it is usually these systems causing the greatest pain. But how do you know when “do nothing” is no longer a viable strategy? How do you know that it’s the right time to modernize?

These four patterns are good indicators that you should plan your modernization project as soon as possible.

1. Loss of business agility
2. Restricted or delayed access to information
3. Higher operating expenses due to maintenance
4. Shortage of resources with legacy skill sets

Note: Although the phrases application and infrastructure software modernization, IT modernization, system modernization, and data center modernization do not always have the same meaning, for the sake of clarity, this article uses the term modernization to refer to application and infrastructure software modernization.

Loss of Business Agility

In their ability to adapt to business needs, legacy applications are anything but agile. The architecture of legacy applications is typically very rigid and cannot support the pace of business today -- processes that are easy to change in business are often difficult and costly to change in legacy computer applications. An increasingly outdated set of systems and infrastructure has become the source of higher costs and increased complexity and problems. IT departments are forced into employing a patchwork approach when these older systems need to be modified.

To obtain the maximum strategic business benefit, it is important to adopt an architecture that is built on open standards and deployed on open systems. A service-oriented architecture (SOA) approach is highly responsive because it focuses organizational efforts on the use of fewer, reusable applications that can be easily integrated and repurposed. This helps to quickly standardize changing business processes; integrate disparate applications; and rapidly assemble services into new, composite applications. In short, when business requirements change, the application architecture can change right along with them.

Due to SOA’s reuse and integration of applications, you can create assets from existing services rather than building them from the ground up every time a change is needed. In industries with constant change, consolidation, multiple business channels, and a need for customization, SOA can add substantial business value in savings of time, money, and resources. SOA’s flexible, adaptable IT infrastructure includes the following lifecycle components:

• Building and deployment of Web services and service-oriented applications
• Integration of a portfolio of reusable services to exchange information between applications
• Combination of services in orchestrated steps to create seamless process flows and rapid development of composite applications
• Security through service authentication, encryption, and authorization management
• Deployment of services and service-level agreements supported by a services directory
• Access through a Web portal, desktop client, or wireless mobile device