3 Steps to Building a Successful Application Modernization Strategy

Technology News Wednesday August 3, 2022 10:00 —PRESS RELEASE LOCAL

3 Steps to Building a Successful Application Modernization Strategy

By Mr.Termsak Virakachornpong, Regional Vice President Southeast Asia, OutSystems

The pressure to deliver innovative products and services is at an all-time high. Until recently, when organizations talked about innovation and digital transformation, they were most often talking about customer experience. Now with the prevalence of remote/hybrid work, both employee and partner experiences have become just as critical in order to succeed in a distributed environment. But to be able to innovate and succeed across all three of these digital transformation priorities, companies need to cut the shackles from their outdated technology and processes that are holding them back.

So, we can't be surprised when we read that IDC predicts that by 2024, most legacy applications will receive some modernization investment, with cloud services used by 65% of the applications to extend functionality or replace inefficient code.1

Delivering modern, cloud applications is essential to increasing flexibility, resilience, agility, and even opening new opportunities for the business. However, building these applications can be extremely hard. Moreover, the challenge of delivering these modern cloud apps grows even more daunting when companies are already spending big chunks of their time and resources just managing the technical debt of their existing technology investments.

We recently hosted a session with Lara Greden, Research Director at IDC, about how companies can overcome the most common challenges when modernizing their applications in order to transform themselves into software innovation factories in a digital-first world. Here are the main takeaways.

App Modernization Challenges

Let's start from the beginning: why is it so hard to deliver modern applications? Unlike a few elite software companies, like Netflix or Apple, most organizations typically face three challenges that hamper their ability to modernize their products and achieve software innovation:

  • Lack of developer talent: according to IDC, in 2021, there was a shortage of 1.4 million developers ? the equivalent of 10% shortage when considering today's population of full-time developers, a number expected to rise to 20% in the next four years.
  • Technical debt: on average, 50% of applications in an organization are legacy and, of those, less than half have been integrated with modern development tools, like DevOps toolchains and integrated development environments. To clarify, legacy systems are not useless systems forgotten on a shelf; they often serve mission-critical needs. However, problems arise when you're trying to innovate, and you need to integrate the aging system to, for example, access data or create a new app on top of it to make it easier for customers to do business with you. Integrating with or building on top of these aging applications can be complex and expensive.
  • Lack of an innovation program in place: by innovation programs, IDC means programs that serve as the scaffolding to create the culture, the KPIs, and the necessary toolsets to empower developers. Although innovation programs are critical to keeping developers motivated, 41% of companies that say they are on a mission of digital innovation lack innovation programs.2

The question that naturally follows is: does this mean that most companies, the ones struggling to hire developers, the ones dealing with increasing backlogs and technical debt, are doomed? Rest assured, they're not. But to cope with innovation, companies need to change the way they perceive software development.

3 Key Takeaways to Become a Software Innovation Factory

During her session, Greden shared three common maturity trends at innovative software companies. This concept includes both native software companies and companies that have digitally transformed their business to add revenue streams enabled by software development.

So, here's how you too can surpass the challenges mentioned above and become a software innovation factory:

  1. Drive a Well-Developed Software Sourcing Strategy

According to IDC, companies that deliver business outcomes with software ? what they call "high innovators" ? are more likely to have a well-developed software sourcing strategy. When creating their development strategy, high innovators plan for the long term and don't just look to solve a single problem with a single vendor.

A well-developed sourcing strategy should be created from across organizational strategic perspectives and should include the ability to leverage existing systems. It is what allows these innovators to deliver solutions in weeks or months instead of years, including integration with legacy and other existing systems, and be able to do so quickly, securely, and reliably.

In developing your sourcing strategy, you need to make sure that your house is in order with your business strategy and then look for the right vendor partner. The right partner should provide you with a technical architecture that allows you to meet your strategic requirements and provide a clear path to how the platform will address other important requirements such as governance, privacy, and security, as well as integration with your existing systems, namely legacy systems, SaaS systems, and cloud providers.

But most importantly, it has to be about empowering developers to deliver functionality and build and extend code; it's all about getting the app they create into the hands of users to deliver business outcomes. So also include your application roadmap and key use cases in the earliest stages possible of these discussions so that you can get the highest impact results.

  1. Be a Software Producer

By this, we mean to be a software producer and not a software consumer. According to IDC, by 2025, up to a quarter of Fortune 500 companies will become software producers in order to maintain their status3. But in reality, every company, no matter its size, should produce software.

Whether you have in-house talent or need to outsource, to be a successful software producer you need to strive for software elegance. In other words, to deliver value with less code and less code complexity. And this is where low-code platforms excel.

There's still a stereotype that low-code platforms are not for real developers. While this may be true for many low-code offerings, for the leading low-code platforms, that characterization is patently inaccurate. What low-code does is provide an abstraction to remove some of that complexity that developers typically face when creating an app or system.

Low-code platforms can also automate mundane or undifferentiated elements of the CI/CD process enabling developers to focus on the highest value elements of an application. These points align with the findings from IDC: when they asked full-stack developers what the most important attributes of the development tools and platforms they use were, the number one answer was code abstraction as represented by low-code tools.

Developers want to code, produce functionality, and not spend their time debugging or conducting software requirement analysis. These types of model-driven, visual solutions allow them to focus on creating highly impactful software.

  1. Don't Start From a Blank Sheet

Today, there's no need to create every piece of software from scratch. You can easily access repeatable bits of code in cloud marketplaces.

It's all about driving a platform approach to enable developers with the tools, processes, and ease of using cloud marketplaces. By investing in your people and getting them better tools, you're empowering your dev team and improving the retention rate while getting the job done bette

About OutSystems

OutSystems was founded in 2001 with the mission to give every organization the power to innovate through software. The OutSystems modern application platform's high productivity, connected, and AI-assisted tools help developers rapidly build and deploy a full range of applications anywhere the organization requires. With more than 435,000 community members, more than 1,500 employees, 350 partners, and active customers in 87 countries and across 22 industries, OutSystems has achieved global scale while helping organizations change the way they develop applications. Visit us at www.outsystems.com or follow us on Twitter @OutSystems or LinkedIn at https://www.linkedin.com/company/outsystems.

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