Application Modernization

This document guides you through the process of application modernization with SAP LeanIX, starting from planning your to-be architecture to tracking modernization initiatives (e.g., cloud migration) to ensuring they are on time and within budget. You will learn step-by-step:

Why application modernization matters to your business and IT, and which data points you need to kick-start this use case.
How to plan your to-be architecture and create a transformation roadmap for your application modernization.
How to visualize the impact of changes in your target architecture.
How to track the progress of the transformation plan and report relevant KPIs to all critical stakeholders.

Why is Application Modernization a relevant use case?

Application modernization helps companies operate more efficiently, reduce IT costs, improve system reliability, and respond more quickly to changing business needs and customer demands. It is a critical investment for staying competitive and thriving in the long run. Application modernization is more than just updating or replacing legacy software systems with SaaS but updating the underlying IT components, infrastructure, or architecture of a system. This can be a complex process without the right tool.

In this context, it is important to know what your application landscape looks like and to:

know in advance what changes will happen to the application landscape.
know-how and when your planned initiatives will modernize the landscape.
have better context beyond time and money to make the right investment decisions.
keep track of the progress toward your target KPIs and milestones.
improve change management of affected business lines, customers, and partners.

What does this use case mean?

Definition

Application modernization involves updating an organization's applications with the latest technology advancements to meet changing business needs. This can mean different things for different organizations, such as replacing outdated applications with newer ones, developing API-enabled applications for better integration and versatility, adopting a data platform architecture, or focusing on cloud migration.

This use case addresses questions such as: How do I modernize the application portfolio? How do I build my roadmap? How do I define the target state? The ultimate goal is to have a state-of-the-art application landscape to help the organization grow and drive digitization and continuous transformation while maintaining a reliable, secure, and cost-efficient IT infrastructure.

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Every organization has its own definition of what ‘modern’ is and it is also something that can change in the future. E.g., shifting to the cloud might be relevant for most of the companies today, but once your organization is in the cloud, you might want to focus on other priorities. Also, shifting to the cloud does not need to be a high focus or the right strategy for the orgnization or all applications. The benefit of planning your modernization with SAP LeanIX is that you can apply all changes in your definition of ‘modern’ along the way, since SAP LeanIX supports continuous transformation.

SAP LeanIX helps application and business owners address their CIOs' and CEOs' strategic objectives by providing the data needed for a comprehensive assessment and decision-making around application modernization. SAP LeanIX Architecture and Road Map Planning capabilities, such as Milestone planning in projects, Transformation, and differential report views showing transformation impacts, help business stakeholders understand the reasoning behind decisions made during modernization.

Benefits of the Application Modernization Use case

For CIO:

Understand if your app modernization is on time and within budget.
Have a view of the target architecture, track progress towards the to-be state, and have transparency of milestones.
Understand if the quality of the business support of applications is increasing and meeting the goals.

For EAs:

Build your as-is landscape for applications, business capabilities, etc., and easily connect them to identify gaps and dependencies.
Model expected transformations to visualize and compare scenarios of your to-be state.
Share your to-be application landscape and transformation roadmaps with stakeholders for better planning and coordination.
Establish a single source of truth for all transformation-related activities instead of being dependent on unreliable and out-of-date spreadsheets.

For Program and Project Managers: Track milestones, adjust to changes in timelines, and understand dependencies in your app modernization initiatives.

Doing an application modernization with SAP LeanIX helps to improve on the following dimensions, and it depends on your organization's strategic priorities on which of the dimensions you want to improve. The benefit of SAP LeanIX is that you can play with those categories to identify the next best step and track the progress with our build-in features and attributes:

Increase technical fit: Shift from inadequate/less appropriate to appropriate technical fit of applications. E.g., in a cloud migration scenario, by re-platforming the Applications' underlying technology platform to cloud services.
Increase the functional fit of your applications, e.g., by rearchitecting the Applications' functionality to have better support for the business.
Ensure that XX% of your applications are in the cloud, e.g., to fulfil a contract with the provider and receive a cashback.
Ensure that XX% of your applications are in the Invest category (or any other of the Gartner TIME categories)

Which SAP LeanIX products do you need for Application Modernization?

The following SAP LeanIX products help you to assess your application portfolio, derive scores and roadmap recommendations, and track modernization efforts:

SAP LeanIX Application Portfolio Management is the SAP LeanIX base suite to create a single source of truth for your application portfolio. It allows you to precisely assess your as-is landscape by creating an application portfolio repository, collecting data with surveys, gaining overviews with pre-defined reports, and assessing your portfolio with frameworks like TIME, 6R, Pace Layering, and more.
SAP LeanIX Architecture and Road Map Planning is to advance your transformation initiative and be able to model and visualize your target (to-be) architecture. Based on the data points you already have by using the SAP LeanIX Application Portfolio Management and SAP LeanIX Technology Risk and Compliance, you can design and plan out your application modernization using LeanIX Architecture and Road Map Planning. It helps you build and communicate roadmaps, visualize the target landscape, and visualize the dependencies in your transformation.
SAP LeanIX Technology Risk and Compliance (optional for this use case) further enhances this use case as it helps prioritize IT component upgrades by detecting current and future security risks caused by outdated components. It provides the latest data to plan and prioritize actions and keeps track of identified risks that have been addressed or are pending mitigation.

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Activate SAP LeanIX Architecture and Road Map Planning and SAP LeanIX Technology Risk and Compliance
The SAP LeanIX Architecture and Road Map Planning (previously known as BTM module) and SAP LeanIX Technology Risk and Compliance (Previously known as TRM module) are products you could include in your SAP LeanIX workspace. If these products are not already part of your contract, you can contact your Customer Success Manager who will assist you in adding the products to the contract and activating them through your Account Executive.

How to do Application Modernization with SAP LeanIX?

When you start planning your application modernization, you will usually build on previous work, such as having your application repository, scoping applications for potential modernization, and having a good understanding of your business and IT strategy. Application modernization has many faces, and we suggest opting for the most suitable modernization per application. However, many companies see a move to the cloud as the next best step for modernization. For example, the objective of becoming a cloud-first company requires an individual cloud assessment of your applications. In this use case, we will use cloud migration as an example of Application modernization.

Step 0. Pre-requisite: Application Portfolio Assessment

Before you start your journey of creating a transformation roadmap, you should already have data in your workspace to work with. If you haven’t done already, please refer to the Application Portfolio Assessment use case documentation for a detailed step-by-step guide.

In a nutshell, to have your application portfolio assessment completed, you will need to do the following:

Create your Application inventory in SAP LeanIX
Create a Business Capability Map and IT Component inventory.
Enrich your data and establish all relevant relationships among various Fact Sheets.
Assess all your applications and classify them with 6R decisions.

Application portfolio assessment is the first step in assessing your as-is architecture before starting an application modernization initiative. Since this documentation highlights a cloud migration example, the pre-requisite is to do an application portfolio assessment focused on cloud migration (click to see example).

You can use surveys to ask relevant application owners to assess and classify the applications using the TIME and 6R frameworks. SAP LeanIX offers free survey templates that you can download from the store and use to collect the required information. To learn more, see Designing a Survey from Existing Survey and Survey Template.

The relevant survey templates are:

Application Rationalization (TIME): for TIME classification.
Cloud Assessment: for 6R classification.

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Gartner® TIME and 6R Framework
The Gartner® TIME framework is a methodology to assess an organization's application portfolio. TIME stands for Tolerate, Invest, Migrate, and Eliminate. It categorizes applications based on their strategic value and the effort required to manage them effectively. The TIME classification helps in assessing and prioritizing applications for rationalization and modernization initiatives. To learn more, see Gartner® TIME Framework.
The 6R framework is a popular approach developed by Gartner and AWS that helps organizations classify their applications for cloud migration based on six different strategies, including Rehost, Replatform, Rearchitect, Repurchase, Retain, and Retire. In SAP LeanIX, these strategies can be applied through the 6R Classification fields in the Application Fact Sheets. To learn more, see 6R Framework.