In 2020, Australian government departments have shown they can innovate quickly to deliver more services online. But while they have made immense progress in digital transformation, hundreds of legacy applications are still in place in every state.
How do government agencies that have roadmaps set and budgets allocated, assess which legacy systems to update or prioritise?
We’ve gained insight into this issue over the 25 years we have delivered software for enterprise and government. Below are a few common factors that indicate it’s time for an application renovation.
The cost to maintain legacy applications is growing
Traditionally there’s been a misconception that investing in new software and platforms is a costly exercise. That’s partially true, however the cost of maintaining legacy environments is much higher. Consider this: an Avanade survey of IT departments back in 2017 noted legacy IT systems make up around 31 percent of the tech stack for organisations, yet it has been estimated in year’s past that the cost to maintain these systems can account for up to a staggering 80 percent of total IT department spending.
To put this in perspective, in 2020 the South Australia Auditor Generals Annual IT review revealed the State Government spends over $20 million per year in vendor support costs to maintain legacy systems. Imagine the possibilities of funnelling this level of funding into creating new online experiences for government staff and citizens.
IT resources are becoming stretched
When it comes to legacy systems, it’s ironic that as a massively scaled, standardised and simplified IT system ages, it becomes more niche and challenging to manage. Why? Because in many cases the platform and software departments are using could be several decades old. This leads to a range of flow on effects.
The platform may no longer supported by a vendor, meaning more internal IT resources are needed to maintain the system or deploy enhancements. And, in addition to being a financial drain on IT resources (remember, up to 80 per cent of IT budgets could be wasted on legacy systems), the number of IT practitioners who know the ins and outs of a legacy system begin to dwindle as the technology, and thus training and practice, moves on to newer technology. Essentially, the pool of talent needed to manage legacy applications is continually shrinking.
In addition, when deploying enhancements, legacy systems are shown to slow things down. A 2017 IBM-commissioned survey by Forrester found that the right cloud technology can modernise applications and development services, enabling developers to be more productive and improve time-to-market.
Legacy technology is restricting innovation
Logically, if your IT teams are spending inordinate amounts of time maintaining a decades-old system, then they will have less time and budget to spend on innovating and improving software experiences for employees and customers.
In fact, one in two organisations surveyed by UK research group Nimbus Ninety stated that legacy applications were the biggest blocker to digital transformation. What does this mean? It’s the complexity of transitioning data storage, and workflows or rules engines into new environments which puts many transformation projects in the ‘too hard’ basket. The prevailing view that legacy application modernisation projects are costly and time consuming is shifting however.
Renovate, don’t rebuild
This is playing out locally, with the federal government recently announcing an $800 million program to fund digital transformation of their digital services. As in Australia, the COVID-19 pandemic has accelerated transformation roadmaps globally. In the US, Federal Agency, the Small Business Administration saw immediate benefits to modernisation of their application environment when put to the test by President Donald Trump.
“[The crisis] absolutely validated the reason why the cloud is a great customer service, because we are able to immediately expand as our user base increases. For example, when the president tweeted out the sba.gov web address, we had an 8,000 percent increase [in traffic] within one minute. If that had been an on-premise application, which it was a year earlier, it would have collapsed,” said Guy Cavallo, former deputy CIO, Small Business Administration, as reported by fedscoop.
Government departments are steering in the right direction, despite the challenges legacy applications pose. For modernisation projects, application renovation is the way forward for departments who have a significant change agenda but can’t afford to tear the whole house down. Application renovation takes the best of existing solutions and builds on it, meaning applications can deliver more value to the organisation and user experience is transformed.
Contact Kiandra to get started on your application renovation today.