The Four Metrics of Success When Planning a Legacy Modernization Project

In the era of ‘do more with less,’ IT groups are constantly being asked to justify each dollar spent and prove its worth. In fact, no IT project should be considered complete before a thorough post-mortem analysis of costs and benefits. While everyone knows how to add up expenses, many IT groups struggle to fully articulate the benefits. 

This is a critical aspect of any legacy modernization and integration project. After all, enterprise modernization is not really about technology – it’s about creating business value and finding the most effective pathway to get there. From the beginning, every option should be considered with metrics for success driving the decision-making process. That might mean a traditional solution or considering technological advances that make it possible for an enterprise to keep their existing legacy system, without any need to “re-platform. 

With that in mind, I want to share a few key metrics to consider when it comes time to look at the results of your next modernization project. As you’ll see, I’ve included specific examples from some recent modernization projects I’ve been involved with. 

Lengthy development timelines are frequently cited as a key reason for migrating away from IBM System i solutions. Therefore, increasing agility is a critical aspect of any modernization project. Typically, these projects utilize lightweight, open source languages such as Java which requires 80% less coding when compared to developing in COBOL which therefore lowers costs and speeds deployment time.

Example: In just three weeks, an automotive dealer was able to incorporate more than 120 IBM System i application screens into its newly deployed CRM solution to gain a 360 degree customer view – a solution that both enhanced agent productivity and increased sales conversion rates. 

IBM System i applications require users to navigate through a predetermined set of possibly redundant screens to access/enter a specific piece of data or complete an assigned task. Modernization solutions enhance productivity by creating customized workflows for specific departments, job functions and/or business requirements – and making them accessible to a mobile workforce. By quantifying average time saved by employee, IT groups can easily report cost/benefits for this type of solution.

Example: One healthcare HMO created a new web application that transformed its IBM System i “green screens” for today’s call center operations – an innovation that increased average agent productivity by 60%. 

Website Response Rates

Customer-facing web and mobile applications must be fast if they hope to deliver a great user experience. In fact, KISSmetrics reported that a one second delay in page response could result in a 7% reduction in conversions and a 16% decrease in customer satisfaction. Meeting stringent performance goals will help boost adoption, engagement or conversion rates – metrics that any finance department will approve of.

Example: A financial services client clocked a 260 millisecond response rate for its revamped cardholder services website. The enhanced experience significantly improved customer satisfaction and competitiveness. 

This is the bottom line criteria for any IT project; did the cost of development exceed the value to the business or vice versa? If the development costs can be kept far below those associated with creating legacy applications, then the modernization project will deliver ROI very quickly and actually reduce the Total Cost of Ownership. More importantly, it will enable IT groups to effectively deliver key services to support critical corporate objectives on a continuous basis.    

Example: An insurance customer found a way to keep its existing legacy system using an open-source software solution to enable mobile, web and cloud access to functions, data and services currently governed by legacy systems, to re-launch its online quote service.  While the previous solution took over six months to develop and failed to deliver against functional requirements, the revamped solution was 10x faster and reduced Total Cost of Ownership by 75%. 

Just as other management groups are asked to report on specific initiatives, IT managers need to be prepared to prove their worth to their organizations. Understanding the fundamental metrics for success before the start of any project will provide a baseline for determining the true success of the endeavor. Added to any additional metrics that correlate with your organization's key corporate initiatives will provide you with a meaningful and true analysis that will serve you and your organization well.