Out-Law News 2 min. read

Dell report: Legacy IT applications need streamlining and updating to drive digital innovation

Businesses must streamline and update the applications they use if they want to create and maintain a competitive advantage over rivals, according to a new report by Dell and the Outsourcing Center.

The report identified the high cost associated with maintaining legacy IT applications and said that by rationalising and modernising their portfolio of applications (registration required for 11-page / 817KB PDF), businesses can devote more resources to innovating.

"Lower total cost of ownership, greater flexibility, seamless operations, and business agility are just a few of the benefits your organisation can expect from initiating an application modernisation project," the report said.

It said businesses should not take steps to introduce new technology into their organisation until they first understand what existing applications are at their disposal, how they are used and their value. Only then should businesses look to discuss the options for modernisation with their suppliers, it said.

IT contracts expert Clive Seddon of Pinsent Masons, the law firm behind Out-Law.com, said that the report reflects the fact that businesses must deal with "the nuances associated with not starting from scratch" when looking to move to introduce new digital technology to their organisation.

"The need to leverage the most from IT is at the absolute core of most companies' ambitions to innovate and grow at the moment," Seddon said. "However, because the recession drove many businesses to cut back their internal IT operations and enter into outsourcing agreements in search of efficiencies, businesses will now find that their legacy IT estate is backed by a complicated set of contracts."

"Businesses need to review their legacy IT and the underlying contracts and decide which applications and functions are core, which are flexible and which should be discarded before seeking to introduce new technology into their organisation. This review, which should accompany a wider assessment of the financial impact and legal risks associated with the shift to new technology, will help businesses understand costs and risks associated with digital transformation projects and ensure the technology in use by the organisation is aligned to the wider business objectives," he said.

In their report, Dell and the Outsourcing Center said businesses should assess the objectives of their various in-house departments so as to better understand what technology they require, but added that it may be possible to make updates to legacy IT that avoid the need to undertake transformational projects.

"Consider carefully any opportunities to consolidate, standardise or re-host/re-platform applications that are currently meeting business needs but running on costly legacy platforms," the report said. "Look for opportunities to re-architect or re-engineer workloads that need enhanced agility to better meet today’s business demands. Modernising a complex application environment built up over decades requires a holistic, end-to-end services approach with structured governance and communication."

The report said that businesses' move towards greater mobility and use of cloud computing technology can be hampered if legacy IT applications are not modernised. In addition, it said that big data projects can be hampered if existing applications prevent data from being analysed.

"The data needed to feed many big data initiatives is often trapped in legacy applications running on outdated platforms," it said. "For large-scale processing requirements that can be parallelised, implementing big data solutions on open systems can provide a scalable, high performance solution at a low cost."

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