Survey: Application modernization in industry

A survey of IT managers in various industrial companies has shown that, in many places, the systems are adequate for current needs but not fully ready to meet future demand. Application modernization projects are therefore essential, with particular focus on ERP systems. How should these application modernization projects be handled?

In a qualitative survey, Zühlke asked IT managers in industrial companies about application modernization. Their responses highlight the different reasons for modernization projects, the different approaches used, and the underlying success factors.

Why is modernization necessary?

The reasons for application modernization projects are complex. Essentially, however, there is always a change in requirements: the existing application no longer meets the current business needs or the systems make it impossible to implement a strategy consistently – such as in the fields of data analysis, the ecosystem, and a customer-centric approach. In addition, the relevant internal knowledge will often have been lost over the long application lifecycle and, along with the increasing complexity of the application, the risk to the company becomes so great that taking action is unavoidable. Another potential reason for application modernization is the reorganisation of the company – for example, through mergers, takeovers, or spin-offs.

Challenges of application modernization

The survey participants most frequently mentioned the following challenges:

• Proliferation of semi-redundant systems and technologies (e.g. multiple ERP systems)
• Standard applications that are too highly customised to the company; updates are almost impossible and not performed for a long time
• The business department is not ready for changes
• Knowledge about the applications has been lost
• The wait for modernisation has been too long; time pressure increases

Key success factors

The survey participants agree that it’s vital to approach application modernization from a business perspective rather than an IT perspective. Far too often, it’s forgotten that modernization projects always involve aspects of change. Small substeps adding concrete value increase acceptance by the business departments. In addition, the survey participants regard support from management as critical. The corporate culture must also be tolerant of change. As in every project, it’s important for the dimensions and complexity to be assessed correctly and to appoint a competent project management team. Another critical success factor is the topic of user-centricity: the needs of end users must be prioritised and understood in the context of the application. When working with new partners in particular, it’s important to be cautious and evaluate the quality of the collaborator and the deliverable with a proof of concept before making a long-term commitment. Working with external partners is also an opportunity to explore new avenues.

Conclusion

The survey shows that application modernization is a topic that will become more important for many (industrial) companies in the near future. To be able to modernise successfully, it’s essential to take certain critical success factors into account.