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How To Invest Your App Dollars Wisely To Lower TCO
9 Min Read

How To Invest Your App Dollars Wisely To Lower TCO

October 27, 2020

Never has there been a greater need to maximize efficiencies and lower total cost of ownership (TCO) for apps. Yet legacy apps are notorious for limiting business agility and competitive advantage while racking up significant operational overhead and cost to maintain.

In an effort to address that, companies are increasingly seeing the value of lift and shift, meaning lifting the current footprint — including infrastructure and applications — to a cloud (whether private or public) without making any additional changes. The migration of a workload to a cloud is simple, as it does not require application refactoring, rebuilding or architecture changes, and it provides elastic infrastructure management.

But in doing so, organizations may assume that the lift-and-shift approach is a panacea of sorts in lowering TCO. The idea that lift and shift alone will provide a strong ROI is a misconception.

It is not “lift and shift” that provides ROI; rather, it’s the balanced modernization of apps and the use of lean transformation processes — of which lift and shift is a part — to address business friction points that will enable you to enjoy the financial benefits you seek from such efforts.

Identify Key Business Friction Points

Organizations seldom do much research to identify their actual business friction points. Bypassing this important step is a mistake because app modernization that does not truly address business friction points will not provide the desired ROI and will also increase effort significantly.

Forward-looking companies realize that ROI is driven by addressing business friction points. That said, it is crucial to identify what those friction points are for your company and to target those points with modernization. These friction points could include a lack of innovation agility, insufficient speed to market, workforce or security issues or other factors.

An important note here is that many companies seek to modernize their legacy applications first. This can be the right choice. But if you are looking for ways to realize maximum ROI, you need to shift your focus to the apps with the friction points that are most negatively affecting your business. Those are the apps to modernize, regardless of whether or not they are legacy applications. By modernizing true pain points first, companies can get it right the first time.

Take A Balanced Approach To Modernization With A Cost-Conscious Culture

Once you commit to transitioning workloads to a cloud, you may experience the common desire to modernize all your apps that are now cloud-based in an effort to take advantage of the benefits of cloud-native services. But you will soon realize that modernizing all of your apps simultaneously is prohibitively expensive.

Therefore, you will want to use a balanced modernization approach in which apps are updated incrementally. Decide which apps to update first based upon which of those apps are the biggest business friction points for your business.

One example of balanced modernization in action is the use of automation to cut down on TCO and make it possible to update the most important apps while engaged in the lift-and-shift process. You can achieve this through a conscious move away from full dependence on DevOps and instead take steps to implement more automation incrementally where it makes sense. You can integrate automation in many ways, including in software development (continuous integration), deployment (continuous deployment) and operations (continuous monitoring).

Embrace LeanBiz™ Transformation

In addition to a balanced modernization approach, there are also great ROI opportunities in adopting what is known as a LeanBiz transformation model. Lean business transformation is a significant change in mindset from traditional wisdom, combining agile, CMMi and lean principles, which often dictates in-house app modernization projects that are large in scope and budget.

By adopting the LeanBiz model, your business can use existing solutions and blueprints to cut costs and expedite the modernization process. This will also allow you to prioritize a data-driven and forward-looking approach (i.e., continuous testing, deployment and monitoring).

Here are a few examples of this process in action:

  • Licensing costs related to legacy software can be astronomical. By using built-in-the-cloud native services, such as a Microsoft SQL license, instead of continuing to pay the big bucks for legacy software, you can realize huge savings.
  • You will also want to consider integrating existing applications in cloud service providers’ marketplaces (such as AWS, Azure or Salesforce) into your environment rather than creating your own apps from scratch. Many of these marketplaces offer apps that speak to the specific needs of industry verticals. Although these marketplaces still have room for growth, they already provide significant selections of apps.
  • By using existing apps from cloud service provider marketplaces, you will benefit because these apps often have built-in security and compliance. But if you modernize and create your own app, you have to dedicate significant human resources and budget to address security and compliance. Not having to worry about such concerns will free you up to focus on innovation rather than building these capabilities.

Consider Working With An Integrator

Many companies struggle to navigate the minutiae of app modernization. If you’re one of them, consider working with solution integrators, which can help you manage these steps.

Solution integrators are knowledgeable about existing solutions, as well as lean transformation processes. They specialize in leveraging and integrating these solutions. They can also help you identify existing apps that already meet all or nearly all of your company’s needs, so once the integration is complete, the resulting solution will almost be as easy as plug and play.

Organizations that apply LeanBiz transformation to modernize the applications and processes that create the most friction for their businesses provide better experiences and reduce business pain points while lowering TCO. With a balanced approach between lift and shift and apps modernization, you can lower your TCO and innovate faster.