Rip-and-Replace or Targeted Modernization? How to Make This Critical Software Decision

Imagine you head IT for a national restaurant franchisor relying on a customized, decade-old software platform to handle vital workflows for all franchise owners; things like inventory and staff management to customer loyalty programs.

Over the years, you’ve worked closely with the platform vendor to tailor and tweak the system to the brand’s complex needs. But it’s begun seriously showing its age. Franchisees are unable to leverage data insights or benefit from innovations like mobile apps. And your requests for serious modernization aren’t being met.

So, when the vendor says:

“No problem, we’ll just rebuild the platform from scratch so you can have all the latest, greatest capabilities.”

It sounds perfect. A clean slate approach without having to nurse along dated technology. You sign off, excited by the prospect.

But soon project delays and ballooning costs reveal overpromising on the vendor’s part. Then the “game-changing” new platform finally launches and franchisees can’t execute basic operations without serious handholding. The rollout is nothing short of a disaster, threatening business continuity.

You wished you had explored a more strategic evolution focused on preserving and gradually upgrading what still worked at the core rather than starting totally from scratch. But it’s too late now. Or is it?

There are a few important considerations as you decide on your application modernization strategy. Before we dive into specifics, let’s level set on what we mean by application modernization.

What is Application Modernization?

There are many definitions thrown around. Our preferred definition is:

“Making intentional changes to existing business software to better support your organizational needs.”

In our experience, it’s not useful to modernize an application just for the sake of having the newest, coolest technology. There needs to be a strong business case for how it can help reduce administrative workload, bring new benefits to customers, or realize new cost savings. In other words, evolving legacy systems should deliver new value not just chasing the latest technologies. Getting clear on your goals will help inform and guide the strategy for application modernization.

Now, let’s explore this notion of preserving what works while strategically upgrading what doesn’t by tackling some relevant steps any business should go through before a drastic overhaul.

Replace or Rebuild

Some service providers refuse to work with outdated technology, claiming it’s old, unmaintainable and needs a complete rewrite. This is particularly popular among early adopters as new technologies are constantly emerging. Starting fresh may seem appealing, but there are drawbacks to this approach. Have you considered the investment you’ve already made in your current software? Are you prepared to invest even more, along with inflation, and wait months or even a year for a software that’s just a more modern version of what you have? Yes, there will be upgrades, but there are hidden costs too, such as lost familiarity and features.

Your existing software is familiar and your employees are comfortable using it. Moving to a new system, even if it’s similar, will come with a learning curve. Even with a detailed list of features you currently rely on, there will be something that’s overlooked or missing in the new software. That workaround Cathy uses to get her work done? It’s gone.

The strongest argument for replacing or rebuilding is when you want to consolidate multiple systems into one and not simply replicate what you already have.

Let’s look at an alternative application modernization strategy.

Upgrade In-place

Upgrading your existing software by making surgical changes to add features, enhance security, or fix bugs is another viable strategy.

This option can be more cost efficient. By not having to rebuild everything from scratch, making changes to add features becomes simpler and less expensive. You can avoid months of downtime, cutover complications, and data migration issues by continuing to use your current software.

Upgrading in place also preserves familiarity. Your employees can continue working with the software while the upgrades are taking place. This reduces organizational change and minimizes downtime during the adjustment period for the new software.

The challenge with upgrading in place lies in finding a competent team to assist you. It can be difficult to find an employee with the skills and experience to handle in-place system upgrades. While outsourcing is an option, many companies prefer to avoid the uncertainties associated with older software. When interviewing potential candidates, look for longevity in projects and real-world experience in modernizing legacy software.

Contrary to common belief, upgrading software in place is very much achievable. It saves time and money, provides a smoother user experience, and reduces change management.

Gradual Change

Like a strategic advisor, we guide companies away from the massive costs and business instability inherent to chasing “all new” systems. Because evolution trumps revolution when it comes to infrastructure enabling resilient operations.

Going back to our franchisor, this could have meant…

• Migrating data to enable advanced analytics: By keeping established interfaces in place, we could effortlessly elevate huge pain points like reporting.

• Infusing AI to drive growth: Existing code can be leveraged for innovations like automated customer engagement while avoiding core workflow disruptions.

• Upgrading integrations to ensure cashflow: Careful enhancements maintain real-time sales/royalty data exchange while avoiding financial disruptions.

It’s clear there are two key paths forward:

1. Rip-and-Replace - Throw out legacy systems to build the “perfect” platform from scratch. Major risk of budget overruns, delays and business disruption.

2. Targeted Modernization - Surgically upgrade what’s outdated while preserving core code, data and workflows. Faster ROI while minimizing cost and change management challenges.

While option #1 speaks to our appetite for the “latest and greatest,” the reality rarely aligns with the vision…at least not without immense growing pains.

That’s why many companies opt for targeted modernization – evolving existing mission-critical systems to meet current challenges before considering drastic overhauls down the road.

Does your business software ecosystem mix aging platforms with rising modern demands? Be wary of vendors overpromising seamless migrations to new systems. There is often a smarter path forward by preserving your technology foundation while strategically enhancing it.