ROI strategies for IS Modernization


IS modernization projects have a difference with IS evolution projects: unlike a new application or an application which evolves on business demand, an application to be modernized does not bring any direct new business related functionality. So, at first glance, IS modernization projects are unlikely to be sold to CEOs, unless…

To better focus on the problem, we don’t bother with very good but not short term financial reasons to modernize (like keeping the IT team proud of its job :D…). So, how do we get back money with a modernization project? Mainly three ways:

  1. Costs savings
    • Easy to explain
      • Get rid of expensive software/hardware contract: development environment, execution environment…
      • Get rid of dependency to rare expertise consultancy/IT services: exotic technology, ultra-rare knowledge…
    • Hard to explain
      • Decrease maintenance costs by having a better organized and more maintainable source code
      • Decrease costs for educating new developers
      • Getting better overall quality code decreases test efforts and associated costs
  2. Getting rid of technology related business risks
    • Easy to explain
      • The execution platform hardware  is no more supported by the provider nor by an alternative provider
    • Easy to explain… But hard to grasp a decision
      • The execution platform software is no more supported by the provider ; the source code is not available or not understandable
    • Hard to explain
      • The application code is more and more hard to support and upgrading maintenance operations will soon (“one day”) be too much complex to be safe
  3. Creating value outside the application functionalities field
    • Easy to explain
      • Increase application delivery throughput and so business volume (usually tied to infrastructure rehosting operations)
    • Easy to explain but hard to grasp a decision
      • Arranging the application interface so that partners can use it, and so expanding the application’s ROI
      • Arranging technology issues to enable new channels (usually sales channels)

Once proper reasons picked up, how do we prove the ROI? Just as usual: in IT field it always relies on figures… And confidence! One advice: stick to simple reasons; the simpler the better!

However, the key point here is to secure the capacity to execute the modernization project in times and costs. If it is your first modernization project, no much choice here: you have to call for an experimented software & services modernization company. It’s your only chance to prove the feasibility and finally to give you a success.