Many organizations are reluctant to part with their legacy infrastructure due to cost and other considerations. Fortunately, IT modernization projects make it possible for them to reap the rewards of digital transformation. However, tech leaders face the challenge of receiving funding for these projects. Company funds are tightly controlled and only released for initiatives with a strong business case and a good return on investment (ROI). Let’s explore how you can win the approval of the executive team for your application modernization project.
Prerequisites for Justifying a Modernization Project
Accessing funding for critical legacy application modernization can be difficult for a tech manager. There are four prerequisites (or steps) to win approval for your modernization project:
- Find the right initiative.
- Identify the target audience for your presentation.
- Demonstrate a core vision of the expected project outcomes.
- Determine the business and technical requirements and the project plan.
These proven steps help IT managers prepare robust presentations and successfully pitch to an executive audience. We will consider each prerequisite in detail.
Find the Right Initiative
Business and IT departments tend to operate in silos, rarely having meaningful conversations due to wrong perceptions of each other’s roles. There are several steps that IT managers can take to increase the cooperation across their organizations for IBM i modernization and other application modernization projects.
Explore LANSA’s IBM i Modernization Demo
Step 1: Schedule Regular Dialogues
We recommend scheduling meetings to facilitate business and IT understanding each other and becoming partners with aligned goals. All issues and opportunities should be openly discussed and brainstormed from different angles. As an IT manager, seek to bridge the gap by becoming knowledgeable about the business dimension. Focus on business topics, understand your organization’s current pains, competition, industry changes, growth plans, key marketing strategies, and other areas. You will likely encounter resistance from either side to have regularly scheduled meetings. However, keep highlighting the importance of consensus in moving the entire company toward exceeding its strategic goals.
Step 2: Explore Solutions
Once the dialogues have revealed the pain points or issues, take the opportunity to discuss possible solutions within your IT department. Feel free to ask your business colleagues and customers about the solutions they believe would help them. These internal sessions are meant to foster creative thinking and will yield several possibilities for further consideration.
Step 3: Link the Modernization Project to the Mission Statement
It’s essential to present the legacy application modernization project within the constructs of your organization’s mission. Every company has a mission statement that may be at the forefront of people’s minds, especially the executives. By linking your proposed modernization project to the mission statement, it helps the critical decision-makers see the value that the organization could reap with its implementation.
Step 4: Create the Post-Project Vision
It helps to create a picture of transformation that everyone would enjoy after the application modernization project is implemented. Emphasize how critical operations would change for the better and the expected increase in customer satisfaction and retention from the higher efficiency level. Also, account for how resources could be reallocated to achieve the company’s strategic goals.
Step 5: Understand the CFO’s Perspective
While the executive team needs to recognize the value of the modernization project, you will need the CFO’s approval to get it funded. Therefore, you need to envision the project from the CFO’s perspective. These professionals tend to be intentionally grounded, level-headed, skeptical, and pessimistic. Also, they are not impulsive buyers. CFOs are very aware of any risks of change and focus on the best allocation of existing capital. Therefore, they will always compare the modernization project to other departments’ initiatives and even the status quo of keeping legacy applications.
Identify the Target Audience
You will also need to consider the characteristics of your audience. This due diligence will ensure that your presentation and funding request is a success. The essential member to win over for an executive audience is likely the CFO. It is critical to understand how an executive audience thinks regarding costs, benefits, and ROI. Also, expect that they will order a feasibility study to determine the project’s value and await consensus among themselves.
The executive team will only fund projects with financial merit and passionate, business-centric support. Therefore, you must think about the initiative from each department head’s perspective. Ensure that every department head has something to gain from this application modernization project.
As an IT manager, you need to develop connections outside your department. Find some like-minded business colleagues who understand the incremental financial benefits your initiative can offer to the organization. It is ideal to have a joint presentation where you present the technical aspects, and these business-oriented sponsors (or supporters) can share the project’s ROI.
You can also inform your CFO about the initiative in broad terms and set a future date for the detailed presentation. Setting this deadline for your presentation provides the necessary push for you to get ready to pitch to the executive.
The Ultimate Cheat Sheet on IBM i Application Modernization
Demonstrate a Core Vision of the Modernization Project
It’s crucial to do your homework to align the legacy application modernization project with the business’ core vision. Justifying the project scope will require:
- Meeting with each business area that would be impacted.
- Incorporating their feedback to align goals and clarify the project scope.
- Identifying the corporate vision or outlook for the project.
- Determining an early approach for executing the project.
- Building a preliminary business case to evaluate the associated benefits, costs, and risks.
As previously recommended, please coordinate with your business sponsors and IT team to prepare for the joint presentation to the executive. Complete a walkthrough of the ballpark costs and benefits (not in detail) but as a first step to determine the initiative’s feasibility. Be prepared to show an analysis of all the work done to date and what needs to be done. Next, you will describe the possible parameters of the deeper study, the activities you will include in the project scope, the time, costs, and effort required. Finally, get the executive’s formal approval and support of the project scope.
Determine the Business and Technical Requirements and Project Plan
With your project scope and business case in place, the next step is to determine the essential requirements. This process will involve a series of meetings with stakeholders to drill down into their needs and suitable application modernization strategies for each department.
Explore how the application modernization project will affect key business objectives in each of these meetings. Consider the existing IT infrastructure and processes and review them with the process owners to gain valuable insights. These meetings will also help you discover opportunities for improvement.
Each department should clearly understand the benefits of the legacy application modernization project for their operations. An effective way to present these benefits is with detailed ROI calculations:
“Return on investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.
To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.”
We invite you to learn more about calculating the return on investment (ROI) for an application modernization project:
Calculating the ROI for a Modernization Project
Developing the list of business and technical requirements is a lengthy but rewarding process as you interact with different departments and gain their confidence and approval for the project. The key deliverables for a modernization project often include vision creation with a modernized user interface to help stakeholders visualize the future. This prototype helps them see the impact on their system integration with various partner systems extensions, additional data capture, and possibly supporting data structures.
Finally, your team will need to develop a credible and detailed project plan. This plan should outline all the tasks and the person(s) responsible for each one of them, the duration of each task, and the associated costs. A robust presentation will go a long way to convincing your executive audience and getting their approval and funding for the modernization initiative.
Win Support for Your Legacy Application Modernization Project
We have discussed the essential steps to getting your modernization project to pass the executive team’s scrutiny. It would be best to determine the right initiative, identify the target audience, and understand their point of view to gain their support. Also, framing the project’s vision and zeroing in the essential requirements is vital to assembling a business case and ROI predictions that appeal to your audience.
Your approach to highlighting the business benefits and ROI should identify each department’s pain points (or areas of concern), coincide the business’ vision with the solution’s vision, and predict the impacts. Calculating the ROI measures, identifying and mitigating risks, considering the success probability, and ensuring that the expected gain exceeds the expected costs will help you present a profitable modernization project that wins the approval and funding you need. All the best!
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