Software developers with valuable legacy products or portfolios are pondering a question with massive implications on their business: when is the right time to modernize a legacy software product?
Software modernization aligns legacy software codebase with today’s business needs and environments in one of three ways:
- Refactoring: transforming the aging, unwieldy code into a simple, easy to read and maintain code.
- Rearchitecting: examining the existing codebase, determining its quality and fitness for future use, and fundamentally rebuilding to ensure future value.
- Replacing: eliminating legacy code and rewriting it from scratch to fit current and future needs.
Software modernization minimizes the in-house server footprint and the costs that come with it while making these expenditures more predictable. Moreover importantly, software modernization enables a highly scalable and always-on IT ecosystem that allows organizations to focus on their core business and launch new and innovative products, rather than having to be distracted by IT-related issues and limitations.
Finding the right moment to modernize
Software products follow the lifecycle as any other product, beginning with initiation and growth through maturity and into decline and obsolescence. The real challenge is understanding when a software product enters each phase, and how long it remains in each phase depends on a variety of factors, including user expectations, market fit, market externalities, and the competitive landscape—all of which are constantly changing over the course of the product’s useful life.
The most essential responsibility for product managers and developers alike is to identify the Pivot Point—the moment when a software product transitions from the growth phase into maturity. This moment offers a unique opportunity in the product lifecycle where a modernization initiative can keep that product at maximum market value, maintaining and even growing market share, revenues, and profits.
As the product enters the “sustain” part of the curve, software developers and managers need to ask an important question: can a targeted investment be made to modernize the product and spur another growth cycle or position it for a bigger market?
If not, do you choose to simply sustain a product until you’re able to migrate users to newer product lines?
The timing is critical: Pivoting too early could mean lower ROI on any investment made in the pre-launch, initiation and growth phases of the product lifecycle.
If you make the pivot too late, customers may have already abandoned the product for more modern competitors. The time for initiating a software modernization effort is when you are still on the growth curve, but the curve is flattening. If you can begin modernizing precisely when you know that a given product is about to hit maturity, you will have maximized your initial investment and given your modernization effort the highest potential ROI.
Why software companies fail to act at the Pivot Point?
Even if they properly identify the Pivot Point—no easy task—many software companies fail to consider modernization at that unique moment in the product lifecycle. Why? It’s often due to two common misconceptions:
- They believe modernization is an all-or-nothing, end-to-end proposition. It’s a full commitment or nothing.
- They think everything needs to be accomplished at once to receive business benefits. Once again, it’s 100% or nothing at all.
That’s a very high ceiling for many organizations. Thankfully, it’s not true.
Modernization has levels, each of which offers benefits. They can be addressed in a stairstep fashion to the point that it satisfies your business purpose—and passes muster with your cost-benefit analysis.
The cost-benefit analysis for software modernization
The path to modernization begins with an in-depth assessment of your specific product, balancing the costs and benefits accordingly. Product managers and developers should analyze the product across multiple dimensions, such as applications, infrastructure, costs, cloud, digital readiness, and resource allocation.
This assessment should also look across domains and business processes to identify what to eliminate, consolidate, modernize, replace, or remove, and the way forward to invest in the future for maximum product lifespan and value
This cost-benefit analysis allows you to look at the situation with two outcomes in mind:
- Simply maintaining and sustaining the existing architecture with minimal operational investment
- Migrating to a new, modernized architecture that is built for longer-term sustainability, but will require significant capital investment.
This type of formal cost-benefit analysis will ensure that the organization can move with confidence and agility, pivoting quickly, and delivering results ideas as quickly as possible.
Whether you’re at the beginning of your modernization journey or looking to advance to the next level of digital business, Persistent’s team of software product engineering experts stands ready to help you embrace Software Modernization.