- App modernization fails in more than two in five modernization efforts due to unclear project expectations, according to data from vFunction published Tuesday. Research firm Wakefield Research polled 250 U.S.-based executives at director level or above.
- Company structure changes and costs can also derail ongoing projects. Executives also attributed failed modernization projects to lack of tools and skills.
- It takes 16 months on average to modernize enterprise applications and project costs can reach at least $1.5 million, the report found.
In modern businesses, apps manage core business processes, from financial transactions to product delivery or customer service. Each second an application has to go offline as modernization takes place has a cost associated with it.
Even after an application is overhauled, if workers and leaders are not on the same page regarding the outcomes of a project, the mismatch can lead to failure.
"When you're defining the goals of your modernization, let's say, to be more innovative and accelerate your engineering velocity, but the strategy that you're pursuing is migration and not really modernization, then of course you're going to fail in meeting the expectations that you set for yourself," said Moti Rafalin, CEO and co-founder of vFunction.
Cost overrun and opaque expectations on a project go hand in hand. Businesses will spend more if the outcome of modernization is unclear, according to Rafalin.
In addition to the cultural and cost issues, a dearth of talent can impair a company's ability to bring its technology up to speed.
“A lot of executives don’t necessarily know the extent of the gaps they have between the skills they have today and the skills they need in the future,” said Suman Thareja, partner at McKinsey & Company, speaking at the MIT Sloan CIO Symposium in May.
Nearly one-third of respondents to the vFunction survey mentioned a lack of employee skills or training as a key factor in failed application upgrades.
Ultimately, the risk to businesses failing to meet modernization goals is the inability to quickly respond to new business requirements. The pandemic pressure tested the majority of companies on their ability to quickly respond to change.
Correction: This story has been updated to clarify a quote from vFunction's Moti Rafalin.