A recent Standish Group study illustrates how a continuous modernization strategy yields superior results compared to project-based approaches.
In the report, "Endless Modernization: How Infinite Flow Keeps Software Fresh," Standish Group authors Jim Johnson and Hans Mulder, on behalf of Micro Focus, explain how their firm's Infinite Flow model of incremental improvements increases value, minimizes risk, and results in a higher rate of success.
The report's conclusion is based on the Standish Group's 25-year study of 2,500 to 5,000 development projects per year. Here are six takeaways from the research.
1. Continuous improvement modernization projects achieve much better outcomes
Organizations often approach software modernization as one large, overarching project with a beginning and an end. But managing the complexity of these mission-critical systems often proves difficult. In the event companies actually complete the project, the requirements likely will have changed by the time it's delivered, because the business is moving so quickly.
As an example, the report cites a large financial organization that twice attempted a big-project approach to replacing a 40-year-old system whose interdependencies between infrastructure software and application software components were hampering agility and lengthening lead times.
The company tried a rip-and-replace approach, both times resulting in multimillion-dollar failures. When it pivoted to smaller, Flow-like projects, it was able to keep many dependencies in place while gradually eliminating them with no downtime and at a reduced cost. Now, with the new system, the company is saving around 80% on annual software maintenance by reducing most of the technical debt.
The case study underscores that Infinite Flow isn't just an academic theory, but a practical methodology with tangible results that can entice leadership, the authors say.
The probability of successfully getting buy-in from the business "is far greater if the IT team approaches these types of projects as smaller deliverables that can be consumed very quickly by the business," said Micro Focus product marketing director Ed Airey.
"In many ways, it gives them the right—they've earned the right —to go back and do it again because they've demonstrated value quickly. Time to market, particularly now, is very important."
—Ed Airey
2. Flow-like microprojects reap greater customer satisfaction due to the built-in feedback loop
Customer satisfaction is the barometer of any successful software project, but this is rarely reflected in the time-and-money metrics that guide most project management, said study co-author and Standish Group chairman Johnson.
The result, according to the study, is that big projects produce just a 6% rate of actual satisfaction and a 60% rate of customer disappointment. Much of this is due to frustration from adapting to the large number of application changes rolled out in the typical waterfall model.
Big projects produce just a 6% rate of actual satisfaction and a 60% rate of customer disappointment.
Infinite Flow projects that deliver new features and functions more incrementally make it easier for users to manage and respond to the changes. The study found that Infinite Flow's daily delivery and value increase customer satisfaction to about 80%.
"Not only do you have constant delivery, but you also have constant quality assessments and continuous improvement."
—Jim Johnson
3. Flow-like modernization microprojects achieve a higher return of value
A typical waterfall-type modernization project incurs about 80% of costs in overhead, according to the study, and offers a net value of less than 20%. A typical agile-type modernization project flips those numbers on their head, delivering an overhead cost of just 20% and a net value of 80%.
"Flow is a non-project-based software development. You're taking all the project stuff away," Johnson said. "You don't have project managers, you don't have estimates of projects, you don't have enterprise tools, you don't have steering committees. You don't have compliance and governance and all this stuff around developing software."
What you gain, he said, is clear line-of-sight among the Flow project sponsor, the team doing the work, and the users receiving the delivered product.
"There are no other buffers between them. So you're reducing your overhead, and people are actually getting the net work done. And if the customer doesn't like it or it's not producing value, you haven't lost a lot of time."
—Jim Johnson
4. Flow-like microprojects offer a reduced risk of failure and monetary loss
Modernization initiatives tend to be extremely costly because of the size of the systems. Banking, finance, and government services applications are measured in many millions of lines of code. Further, many of these legacy systems are decades old and poorly documented, and the specialized skills to manage them are in short supply. For a lot of companies, the likelihood and cost of failure are prohibitively high.
The data indicates that microprojects should succeed 80% to 90% of the time, Johnson said, so even if the project fails, the organization has lost only a small amount of time and money. The cost "is so small that it doesn't even show up on the books," Johnson said.
5. Flow-like microprojects have a higher degree of sustainable innovation
Finding the right balance between maintenance and innovation is key to thriving in today's digital-first environment, according to the study's authors. But IT budget and skill shortfalls make that balance a constant challenge for established systems.
Because Infinite Flow emphasizes smaller, incremental efforts, it creates room to discover, experiment, and fail with far less risk. And Flow modernization teams tend to be smaller, with about four to six team members, which facilitates greater agility, better communication, and rapid feedback, all advantages for imagining and executing new features in old systems.
"[With Infinite Flow,] innovation becomes a real key that that that's been lacking for years in all of these mission-critical applications."
—Jim Johnson
6. Flow helps apps last longer, avoiding premature retirements
Mission-critical application projects have a beginning and an end, but the study's authors advocate thinking of the applications themselves as having a potentially infinite lifespan. By ensuring they are well maintained and continuously improved, you may never have to retire them.
The idea, Johnson said, is to embed a Flow team in a particular department or assign it to an application "so that they live there." This helps the team build relationships with the people using the application, see the problems they're having in real time, and improve the application over time to keep it relevant.
"You're going to be with the people that actually use the stuff."
—Jim Johnson
Find your flow
There’s no single path to digital transformation, and success often requires a flexible and adaptive strategy to meet changing business needs. For many organizations, core business systems are increasingly at the heart of strategic change.
Continuous modernization methodologies such as Infinite Flow offer a faster path to innovation and change at lower risk while providing greater value to the business.
Increasingly, the incremental path to modernization is proving itself as an actionable practice with proven real-world benefits. With an estimated 70% of organizations planning to modernize core business systems, Flow-like systems supporting continuous modernization are shaping up to be a critical tool in their digital transformation arsenal.
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