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How Application Modernization Can Help You Manage Your IT Budget

Author: David Boyle | | December 13, 2022


In the wake of the pandemic, the Great Resignation, and the war in Ukraine, the future feels more unpredictable than ever. 98% of U.S. CEOs indicate they are anticipating a recession. Layoffs and budget cuts abound. Companies must make efforts to prepare for further economic turbulence.

In times like these, CIOs and IT leaders need to evaluate how to build efficiencies and cut costs. A recent Gartner report states that reducing technical debt is one way to prepare for the oncoming recession. Modernizing legacy applications can produce significant savings while also future-proofing your business. In this blog, we’ll discuss the challenges of legacy systems and the benefits of eliminating technical debt.

Challenges of Legacy Applications

Legacy applications pose a challenge for many organizations because, while the technology may be antiquated, these apps can still be integral to critical business processes. This means that replacing them is potentially incredibly cost-prohibitive and disruptive to day-to-day business operations. As a result, many companies choose to keep them even when their functionality can no longer keep up with the needs of the business.

Unfortunately, skill sets for these applications can be difficult and expensive to find. Up to 80% of a CIO’s budget can be spent maintaining legacy systems, according to some estimates. In addition, maintaining these systems is disruptive to digital transformation — an initiative few can afford to neglect in our post-COVID world.

Why Modernize Your Applications?

Gartner suggests that reducing technical debt contributes to revenue, innovation, and risk reduction. Application modernization is an investment that pays dividends for years to come. When your monolithic applications are re-architected, re-platformed, and refactored, you open up the ability to build and scale with modern tools such as:

  • Hybrid and multi-cloud environments
  • Containerization
  • Microservices
  • Data streaming
  • Low-code/No code development

A 2022 study by Wakefield Research shows that 92% of organizations are either currently modernizing applications or plan to modernize them soon. The cost benefits gained from reducing legacy infrastructure and support — and the time your team spends wrestling with poor performance — can be seen almost immediately. They will become even more apparent as you watch the speed, agility, and efficiency of your applications skyrocket.

Real-world Benefits of Application Modernization

One of our higher education clients is a great example of how application modernization can bring major benefits to the bottom line. The client required help modernizing their international application process, which had been neglected for some time. As one of the largest public colleges in Canada, it was imperative that their portals were efficient and easy to use so they could continue to attract high-performing students.

We worked with their internal teams to build a brand new front end, refresh and integrate the back end, build an application portal and an administrator portal, and migrate the entire application to Microsoft Azure Cloud where they could leverage cutting-edge features like Azure Active Directory B2C, Azure API Management, Azure Blob Storage, Azure Application Insights, and more.

By modernizing and upgrading its international application platform, the client has enabled users to view their status quickly at a glance, which had previously not been possible. Both the college and the students now enjoy faster turnaround time and a streamlined, efficient application process.

In addition to reducing infrastructure costs and regaining lost tuition from students who abandon applications due to performance issues, they have also increased the college’s yield rate (percentage of accepted students who matriculate), making a positive impact on revenue.

Final Thoughts

Application modernization pays dividends to organizations of all sizes. In addition to reducing costs and providing better application performance, it also provides your company with cutting-edge tools that will enable you to scale IT for the future.

But application modernization isn’t the only strategy you can use to cut IT costs. To learn seven more ways you can shrink your budget, download our white paper, Declining Revenues? 8 Ways Datavail Helps You Save on IT Costs.


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