Application Modernization Services: Gaining competitive advantage by modernizing applications

August, 2023

Enterprises are compelled to modernize applications due to the evolving digital landscape’s demands for enhanced agility, user experiences, and competitiveness. Legacy systems often hinder innovation and lack the ability to harness data-driven insights. Service providers are pivotal in aiding businesses to achieve their application modernization goals. They offer expert assessments, strategy formulation, and technology selection, ensuring seamless migration, integration, security, and compliance. Service providers also facilitate thorough testing, training, and ongoing support, enabling enterprises to transition smoothly to modernized applications while aligning with business needs and driving transformative digital shifts.

Both demand-side and supply-side trends are covered in Avasant’s Application Modernization Services 2023 Market Insights™ and Application Modernization Services 2023 RadarView™, respectively. These reports present a comprehensive study of application modernization service providers and closely examine the market leaders, innovators, disruptors, and challengers.

We evaluated 34 service providers across three dimensions: practice maturity, partner ecosystem, and investments and innovation. Of the 34 providers, we recognized 23 that brought the most value to the market during the past 12 months.

The report recognizes service providers in four categories:

    • Leaders: Accenture, Capgemini, HCLTech, IBM, Infosys, TCS, Tech Mahindra, and Wipro
    • Innovators: Cognizant, Deloitte, Persistent Systems, and Unisys
    • Disruptors: Eviden, Hexaware, Jade Global, Kyndryl, Mphasis, NTT DATA, and UST
    • Challengers: Datamatics, GAVS Technologies, Hitachi Vantara, and Virtusa

Figure 1 below from the full report illustrates these categories:

MoneyShot Application Modernization Services 2023 1030x687 - Application Modernization Services: Gaining competitive advantage by modernizing applications

“Adopting application modernization is embracing the future,” said Avasant Principal Robert Devers. “Modernizing applications isn’t a mere update; it’s a transformative journey for enterprises that amplifies system intelligence, elevates user experiences, and fortifies businesses amid the waves of technological evolution.”

The reports provide several findings, including the following:

    • Around 25% of application modernization services traction comes from the banking and financial services industries. The adoption rate in these industries is high because they need enhanced operational efficiency, improved customer experience, and robust security measures within their highly dynamic and regulated environments.
    • Enterprises leverage generative AI in application modernization to automate coding tasks, expedite development cycles, enhance UI designs, and optimize database structures.
    • Service providers plan to invest 45% of their application modernization investment budget in asset development and practice growth. These include investing in digital studios, building tools and accelerators for cloud-native development, and expanding practice head count in new regions.
    • Within application modernization projects, 93% of engagements grapple with change management concerns and 91% face challenges posed by legacy system intricacies.

“Application modernization serves as a navigational tool for enterprises amid digital evolution,” said Gaurav Dewan, research director with Avasant. “With changing customer behavior, regulatory standards, and competitive landscape, legacy modernization is emerging as a strategic imperative for enterprises.”

The Application Modernization Services 2023 RadarViewalso features detailed RadarView profiles of 23 service providers, along with their solutions, offerings, and experience in assisting enterprises in their application modernization journeys.

This Research Byte is a brief overview of the Application Modernization Services 2023 Market Insights™ and Application Modernization Services 2023 RadarView™ (click for pricing).