Some of the lowest hanging fruit for cost savings in IT departments resides within legacy applications. We know that in many organizations, up to 70% of the IT budget is spent maintaining aging applications, mostly due to requirements in highly regulated industries for access to data in those systems.
We also know from our experience working with clients in financial services, healthcare, aviation, energy, and others, that the savings to be had from decommissioning legacy applications can be in the millions of dollars and over multiple years.
When budgets are tight, “free money” is hard to turn down. So why aren’t organizations jumping on the chance to recover millions of dollars that they can redirect to strategic projects? The obvious answer is that the upfront cost to retire those aging applications is just another expense that no one wants to incur.
Luckily, application retirement doesn’t exist in a vacuum, and neither does the need to address this key part of your IT strategy. In our work with clients over the past few years, we’ve learned that organizations view their IT ecosystems at a higher level, and legacy applications are just a part of it.
In a similar vein, there are at least four ways you can tackle legacy application decommissioning as part of other strategic IT initiatives.
- Cloud Enablement. Many organizations are actively moving some or all of the IT infrastructure into public or private cloud environments. These moves take time and money. Why move old, outdated apps that may not run well in a cloud environment? Application retirement can be an important component of a cloud enablement strategy – improving the velocity and efficacy of cloud enablement programs.
- Infrastructure Refresh Programs. Many organizations blindly refresh infrastructure, updating applications to use more modern storage, compute and networking components. But this is a poor use of infrastructure funds if, instead, the applications could be retired and access to required data provided by an application retirement solution.
- IT as a service (ITaaS). As IT shops transform themselves into service providers to the business, the economics of application retirement can become very compelling. There’s great hard dollar ROI, it’s easy to explain to the business, and there are quick and measurable results. Providing application retirement as a service within an overall ITaaS initiative provides great synergies between IT and the business.
- Application Rationalization. As part of an “app rat” strategy, some applications will fall into the application retirement bucket. Aligning an application retirement solution with a company’s app rat strategy provides a great end point for app rat programs, where measurable ROI and risk reduction can be provided as an integral follow-on program for a subset of applications that are evaluated within the context of an app rat program.
We’ll dive deeper into each of these in future blogs. In the meantime, if you’re working on any of these initiatives, consider including application retirement along with them. Application retirement doesn’t live on an island. When you consider how tackling your aging applications supports other key IT initiatives, there’s a greater chance you can get started sooner. More importantly, you’ll stop leaving money on the table in the form of costly, aging applications.