This is the Time to Consider Application Migration Projects

Most IT shops have a large backlog of deferred application migration projects that have been sitting for some time (years). As time goes on, the cost of conversion gets higher. The lost opportunity cost of not converting also gets higher. A coming together of infrastructure improvements, money available to companies, and expertise makes this the ideal time to get on board. There is no time better than now to increase the priority of these projects and get them done.

What is an application migration project?

An application migration project is one where an application exists and is in operation but would benefit the corporation if it were changed over to a replacement application. There are a wide variety of projects that fit this definition. Some of the more common ones are:

Legacy applications, home grown

The world is littered with applications that were written back in the 1960’s and 1970’s to run on what was then the best IT infrastructure available. Some of these were written by the IT shop itself, others by outside teams hired by the IT shop. They were written for infrastructure (computer hardware, communications, database systems) that was the best available then but has since been replaced by much superior infrastructure technology over the years.

The application may still run OK on prior years standards but is not running as optimally as it would be if upgraded to modern infrastructure. The application also suffers from old problems of data quality issues, connectivity issues, and the inability to use the data generated by it in extended applications such as BIG Data Analytics or AI.

Legacy applications, packaged software

These started to take over the IT world in the 1870’s and 1980’s. Companies emerged that offered complete application support for a business function. The IT shop did not write code, it just paid for the package, installed it, and has been using it for many years. These older application packages were built on top of IT infrastructure prevalent in those years. Most have not moved on to new infrastructure.

Examples are Siebel Systems. Some of these packages have literally millions of current users running on older legacy hardware and database systems.

Consolidations from M&A

Almost all companies have extended their IT responsibilities through the corporation merging with or acquiring other companies. These companies come with their own portfolio of application implementations that almost never match the ones the acquiring company is using. The IT shop always has intentions of migrating the newly arrived applications to ones they have in use. They usually don’t get this done and end up supporting multiple variations of the same business function application on multiple, different hardware and operating system platforms.

There are other reasons why a company may want to change an existing application, but the ones above generally constitute a formidable backlog of work and opportunity.

Why have so many of them been deferred for so long?

A deferred project is one that has been around for a long time and the business case for completing it has been known for much of that time. This is true of almost all of them on the list. As time goes on the business case for executing them just gets better.

Projects are deferred for a variety of reasons. Number one on the list is cost. These are not cheap projects. It’s like remodeling your home: the costs can escalate quickly and get out of control. Lack of staff to work on them is another reason. These projects usually get executed by external consultancy groups. However, they still require involvement to some extent by the existing IT staff.

The risk is also high in most cases. There are lots of stories out there about projects that fail to get done correctly and end up costing the corporation a lot of money with little or nothing to show for it.

CIO’s are infamous for putting off these projects for the reasons stated above and others not stated here. They acknowledge the value they would give to the company if they ever get done but put them off saying that it is not the right time to do them. It is easier and safer to put off for another year.

Why is this a better time to move on getting them done?

Several factors exist that make this an optimal time for doing these projects. They include both positive and negative tipping points. The positive ones indicate that the ROI of these projects have never been greater; the negative ones indicate that the dangers of putting them off for longer may increase the cost and negative impacts quickly.

Modern Infrastructure for hosting applications has matured

If you were to build an application from scratch today you would most likely choose to build it on an infrastructure base that includes the cloud, a strong and secure database system, secure IP connectivity, modern programming languages, and a SaaS design. If you acquired a new application package, you would expect it to be hosted similarly.

The availability of cloud services, secure and efficient database services and extensive connectivity capabilities has reached a level of exceptional performance at low cost. Once migrated, your application will experience new levels of performance, efficiency, availability and connectivity. Your cost of hosting and supporting these applications will drop dramatically.

Data exploitation is favoring companies who can do it and who do it well

Recent years have shown that the data created by applications is extremely valuable to corporations by extracting it and using it in analytical, Big Data analytics, and artificial intelligence. Companies using older applications to generate data find that it is hard to impossible to exploit these capabilities and sometimes not possible. Those on a newer infrastructure base do so with ease.

In many industries we are at a tipping point where those that can respond quickly to data exposing changes in the marketplace or who can build marketing programs that are more directed are or will be passing up those that cannot.

Support for old applications on old infrastructure bases is getting less available and more costly

We are at a negative tipping point for many older applications. The vendors who control the applications are moving to remove support of older instantiations and require the customer to move to more modernly hosted versions and that they be replaced entirely by new applications. Many companies are using applications that have no vendor support at all.

The reason for this is that it is becoming harder and harder to find people who have the knowledge and experience to work with older infrastructure components. Young people do not want to spend their careers learning and on obsolete technology. For example, applications still running on IBM mainframes require people knowing how to work with the old mainframe operating and database systems and, in many cases, the assembler languages used to implement them. This group of people are at the end of their careers and will soon not be found anywhere.

Companies are doing more acquisitions and mergers than ever before

All industries are exhibiting a large appetite for growing through M&A. To compete in this world a company must be able to show synergistic benefit from the combination quickly. Wall Street is impatient in waiting for benefits to emerge to the bottom line. A lot of the potential benefits of an M&A come from combining the application portfolios and eliminating redundant costs.

Companies that consolidate quickly gain a clear advantage over competitors who do not.

Companies have more cash than ever before

The recent surge in the overall US economy, corporate tax reductions, and the rule change for taxation of profits made from overseas operations when returned to the US has given most companies a bubble in cash available for investment. This bubble will diminish soon due to rising interest rates.

The CIO of company needs to be getting a piece of this available budget dollars to modernize and streamline their operations.

A smart approach to getting to work on them

Smart companies will be looking at their portfolio of deferred projects and figure out how to get them into their IT budgets. CIOs should be lobbying for an increased or special budget to tackle the backlog.

They should build a new structure for executing projects that eliminates much of the risk and cost overruns experienced in the past. Application migration projects have a negative success ratio in the past. This is not necessary. Projects can be planned, executed, and completed efficiently and at reasonable costs if a more modern approach is taken.

Inventory and prioritize projects

It is advisable to create a special group within IT to identify all projects that need to be done, to investigate the work and time needed to complete them and to prioritize them based on cost, business value returned, and time to complete.

Structure projects for maximum involvement

A common mistake made in the past was to hire an external IT services company and let them do all the planning and work. This approach is highly susceptible to unexpected surprises popping up during the project execution resulting in delays and cost overruns or, in some cases, total failure.

A modern approach is to build the project team using external services companies for most of the work and some of the guidance but relying on in-house people’s participation where it is most beneficial. This not only includes relevant IT experts who have been supporting an application but also business side subject-matter-experts and vendor experts.

If the company has an existing data governance group watching over an application, they should be heavily involved in the planning and design of the project.

Emphasize up front planning and discovery

Many projects have failed in the past through failure to thoroughly understand all parts of a project early in the project process. Discovery of data quality issues, data mismatch issues, private interfaces, downstream users of the data should be done at the beginning as part of the project planning. Too often in the past these issues were overlooked resulting in major project stoppages in the middle of implementation.

Planning for new uses of the application’s data should also be part of the process. If a purpose of the project is to move the application to an infrastructure that will allow it to be extended for analytics or AI, then understanding what the users are thinking will make the project more successful once completed.

Control project costs

A lot of dollars will be spent on outside services companies. Time should be spent to find companies that are offer a better cost proposal. Cost proposals not only include the cost per billable hour but the productivity that the vendor can deliver.

Some of the older service companies have bloated management, administration, and marketing budgets that result in higher billable hour rates. Some have very junior staff that result in lower productivity rates.

IT services companies that provide continuing support to an IT function are not always the best choice for tackling these one-time projects. Don’t assume that a company that served you well in the past for continuing support will provide a positive outcome for application migration projects.

Time to Act!

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