Rethink outcomes for business value from application modernization
- Posted on January 18, 2022
- Estimated reading time 5 minutes
As my colleagues have written, establishing an outcome-based relationship can be a powerful way to incentivize your partners and make real progress towards your strategic goals. This post focuses on rethinking business value from your applications; those sprawling, mission critical applications that run your business. The same apps that scare you a little when they need to be updated.
Focus on outcomes, or you’ll never achieve value
In the courtroom, the movies tell us to “never ask a question you don’t already know the answer to.” The application transformation version of that would be “never invest in a transformation whose value you can’t measure.” Every stakeholder involved should understand what success looks like and how that will be measured, because the question really being asked is “why should we spend energy and money on this, and what’s the return?”
There are three examples I’d like to use to anchor some of the ways to explore a value based approach to application modernization.
1. We’re spending too much time and energy when we need to deploy a new feature
One of our clients had a multi-tier custom application that has worked well for them for a long time. But the organization was lacking agility and struggled to embrace continual change. They realized that they were missing market opportunities because they couldn’t get changes out quickly enough – there were multiple layers that needed updating and a costly regression-testing process needed given the dependency sprawl.
Using a combination of microservices, event-driven architecture and improved automation in DevSecOps, Avanade designed an approach to reduce cross-domain dependencies and make it easier for updates in one business domain to be completed without impacting others. This also allowed for continuous evolution as each business domain identified market pressures or opportunities, making the organization significantly more agile.
Making a commitment to improved time-to-market is a great example of an outcome-based approach. It helps ensure everyone is aligned, from business-process owners to developers to the run team. In this example, establishing a shared understanding of time-to-market enabled the client to create milestones and pay only when those milestones were met – essentially eliminating risk for the organization, with Avanade held fully accountable for delivering against this business value-based outcome./p>
2. Our mainframe is holding us hostage
No single system should keep a business from evolving but too often, hard-to-update or mission-critical systems can create budget or risk-driven barriers. To help one client break out of this cycle, we identified a well-understood business process (accounts receivable) running in a client’s mainframe. Pulling this process out into a modern, cloud-based system started a progression of digital decoupling, allowing more and more business processes to be moved into modern systems.
Another client explained to us that they were deeply concerned about their mainframe experts retiring. In the current market, being able to find or afford resources with those skills is increasingly difficult and represented a significant risk to their business. We helped them to overcome this risk through a similar digital decoupling approach to that above – over time, reducing their dependency on these increasingly rare skills by modernizing the component parts in order of priority and business impact.
Lower spend on mainframe run (hard costs as well as personnel), alongside a greater number of business processes running in the cloud on scalable, secure and broadly understood technology is an outcome tied directly to the bottom line. MIPS reduction and the corresponding cost-saving is an example of a measurement that should get tied to payments-for-outcomes in this scenario.
A more complex approach could incorporate the composition of the support team or even the total volume of tickets and percentage of mainframe tickets as a trailing indicator – this may also be a more complete measure as it reflects the broader costs and opportunities that are being addressed.
3. We really want to modernize, we have a solid plan, but we’re getting lost in internal IT debates
Great strategic thinking has to be paired with execution – one of our clients came to us “stuck” in their modernization journey. They knew they had a great plan but just couldn’t seem to get moving. At every step, their IT organization was questioning the key elements of the strategy. Complicating things further, different groups within IT disagreed on the path forward. Our job was to help connect the tactical execution with the business strategy, so we helped the IT organization identify the business outcomes that drove the strategy in the first place.
This allowed all the stakeholders – including an IT organization that had been left out of critical planning sessions – to buy in and understand what was trying to be accomplished. It also meant that the experience of the team running the existing technology estate could be leveraged to improve plans and speed execution.
As a partner, we provided access to deep Azure expertise, within Avanade and Microsoft, to answer detailed technical questions. We also leveraged our Modern Architecture Workshop to bring IT and the business together through remote, facilitated design thinking sessions to help identify key architecture patterns that would support business functions. The clear focus on outcomes we brought to the client helped to break the logjam and get buy-in on the go-forward approach – quickly.
The end result? The client overcame their sticking points and, jointly with Avanade, accelerated their modernization efforts – driving towards the outcomes and business value improvements that were critical for success.