The Effect of Application Modernization in Business Agility in Organizations

Technology: The Effect of Application Modernization in Business Agility in Organizations

Section 1: Introduction

Application modernization refers to the re-defining of the software system of any business so that it must be aligned with the modern business needs to fulfill the newly arising customer demands (Johnson and Mulder, 2015). The refactoring of an application should be done so that the reduction of business costs is observed so that maximum benefit for both customers and the business itself could be produced equally. Therefore, the codebase and business application features are becoming of main concern in modernization. Keeping up with the changing customer preferences with quickness in product and service delivery and creating an innovative customer experience should be highlighted. Organizations have to be thoughtful about deploying application modernization for enlarging business opportunities and facilitating customer satisfaction, augmenting sales, and expanding profits. This paper aims at providing a full research proposal regarding the selecting area of interest, which is the focus of the research question: examining the effect of application modernization in business agility in organizations, specifically for the banking sector.

The hypotheses developed for this purpose are:

· First hypothesis: Adapting application modernization would create a negative impact on the firms’ time to market

· Second hypothesis: The more modern applications, the more costs are saved by enhancing I.T. resources and DevOps.

· Third hypothesis: Adaptation of application modernization would hurt the number of services offered by the application itself.

Section 2: Recipients of Research

The primary recipients of the research would be my academic institution and the pertinent staff, along with my thesis supervisor. Additional recipients would include the banking industry personnel to reduce their costs by realizing the increased pressure of globalization and the pandemics that pose extra costs and needs for delivering the best digital services to their clients when uncertainty hits hard. The financial institutions are always on the drive to search for new ways of innovation and modernizing their application legacy so that revolutionizing the I.T. infrastructure strengthens their functionality and service delivery.

Section 3: Suitability of Researcher for the Research

The researcher for this proposed research must know correlational research to investigate the relationship of one variable on the other. The previous conceptual model of the current research proposal indicated that the independent variable is an adaptation of application modernization. In contrast, the dependent variables are the time to market, cost reduction and the number of services, the awareness of establishing these relationships, and then carrying out the research should be the primary focus of the researcher for this paper. Also, the researcher should possess familiarity with a quantitative study, the formulation of a quantitative survey, its data extraction, analysis, understanding the meaning of the quantifiers, and the interpretation of the quantified data to translate it into an accurate analysis.

As the correlational research needs to develop a relationship between the variables, the technological trends and patterns in the baking consumer industry would be assessed with the correlation based on the three hypotheses. Therefore, my academic and work background would be helpful for this topic since I have worked as an intern in one of the banks located in my vicinity where I live. I was able to form and maintain good terms with the bank office managers and the colleagues and therefore anticipate that they would help gain the quantitative data that I need for this research. My academic background, especially the course in Statistics, has supported me in gaining knowledge of qualitative and quantitative methods of data collection and their relevant analysis that helps extract meaning out of the research. My work background would assist me in using my contacts within the internship bank for conducting the quantitative survey among the employees and managers since I also have been working with their applications and software that they use in the branch. I have been acquainted with the customers’ work methods and service delivery. Hence, my previous comprehension of the research area would fortify my knowledge of the obtained data results from the survey.

Section 4: Literature Review/ Overview

Lately, research has been emphasizing more on ‘business agility,’ a special feature of any business for adapting to new market changes, either in the form of consumer demand, new competition, or new information technology resources that might cause uncertainty. The business should be able to handle the turbulence occurring from such situations that have been discussed by Mathiassen and Pries-Heje (2006) in their research where they cannot overstate enough the significance of infusion of I.T. and businesses developing strong foundations for becoming better prepared for the future. The firm-level and business-level analysis after the I.T. infusion for service enhancement should be crafted along the lines of the business strategy for keeping the workflows smooth with lesser disruptions and better agility in quicker service to the consumers. After its deployment, the supply chain management should be streamlined, with clear roles and responsibilities from the concerned personnel.

Application modernization involves agile development that has been infused by the businesses for which challenges and benefits have been narrated in the previous researches. For example, a recent article talks about firms deeming agile methods conducive to improving business performance; however agile methods and lean software developments have brought several obstacles in the transformation process (Dikert, Paasivaara, and Lassenius, 2016). The systematic literature review results of 52 publications based on numerous industrial instances disclosed 35 self-reported challenges and 29 success factors hinging upon the salient features of the software development resulting in business agility.

Few latest articles are present that underline the significance of integration of information technology for service sector businesses, such as banking. One of such articles talks about business agility and infusion of admixture of I.T. in service organizations. Managers find I.T. one of the most crucial support systems in times of uncertainty (Oosterhout, 2010). Although I.T. cannot eradicate dubiety, it can still be of assistance for minimizing the risk for coping with unpredictability and changing preferences of the consumers. It manages to offer new product innovations and wipe out the delays that might cause the customers to switch to competitors’ services. A competitive advantage is ensured when less time is needed to market the products and services. The I.T. system could be relied on to predict the demand of services, flexibility in offers, and distribution of those offers on schedule. This research has documented that new I.T. applications in line with modernized infrastructures take time in deployment during which there would be risks and challenges.

Retail banks recently adopted digital transformation; however, digital transformation has been misunderstood as it entails risks alongside benefits if the application process is appropriate. Krasonikolakis, Tsarbopoulos, and Eng (2020) explored through a grounded theory approach that the effect of digital transformation on retail banking has its pitfalls and advantages after conducting interviews with top hierarchical banking professionals. It was discerned that digital transformation for improving business performance in banking is not as easy as expected. The change needs to be implemented in its entirety, such as organizational culture, policies, institutional change, and technological interrelationship with a regulatory framework.

Application of next-generation technological transformation through application modernization, which might include cloud computing in financial services, has been studied by McKinsey as well, whose research results again highlight the challenges and possible solutions for I.T. infrastructure modernization (McKinsey and Company, 2020). The report stressed banking agility while keeping the costs and risks low. It has been well-understood that infrastructure cannot be digitally transformed without rethinking the accurate shifting related to marketing time, security, customer confidentiality, service quality, reliability, employee satisfaction, and retention.

Modernization of legacy systems and applications mainly involves transforming the mainframe software into new ones in the banking and financial sector. Modern technology provides problem-solving features to the customers (Quinn and Hirsch, 2020). One of the methods is application programming interfaces that have been favorable for both customers and the banks since they trigger fast service delivery that contemporary times require the most. Fintech has been providing prominent services such as mobile payments, automated applications for investments, online payments and crypto-currency, etc., contributing to the fastest IT-based financial diversifications in the competitive market (Nguyen, Dinh, and Nguyen, 2020). However, there had been challenges identified by banking sector experts in the incorporation of Fintech and suchlike adaptations in application modernization, particularly in Vietnam that hinders future growth. The authors of this article cited five challenges that companies in Vietnam have explored after incorporating Fintech, related to the company itself, legal passageway, infrastructure, human resources, and customers.

Certain gaps in the literature aim to address the currently proposed research. Firstly, there is little latest data on the research topic, particularly for business agility with application modernization in the banking sector. The research mainly accentuates the I.T. infusion and impacts on the service industry on the whole or sometimes only discusses the challenges and risks. The effect of application modernization in reducing business costs for the banking sector, number of services offered to the customer, efficiency in customer services, and for that, the time available to market those services to the end consumers have yet to be discovered with service upgrade in the banking industry when it comes to application modernization. Further, scarce data is available in the studies that could have incorporated views of the bank managers through quantitative and correlational research methods.

Section 5: Research Methodology

As the study design is selected to be quantitative, a quantitative survey or questionnaire would be conducted among the bank managers who have either seen improvement in their bank service after application modernization or gained their insights and opinions on the need and expected outcomes for application modernization so that its effects could be measured in terms of the selected dependent variables within the hypotheses. For a detailed quantitative survey, see appendix 4 in section 10.

Since it is a correlational study with independent and dependent variables, quantification is inevitable. The quantifying numbers in the survey results would help measure the extent to which the bank managers think application modernization is valuable for improving their customer service and producing lesser costs.

Section 6: Population and Sample

The target population would be the banks that have adopted the application modernization technology in some manner and have made changes to the new technology within their business culture. A bigger target sample is needed to find more candidates for survey filling. The reason for selecting managers only is that they are the ones who are closer to formulating policies within the financial institution that would help reduce the overall costs at the same time providing the best services to their clients. Employees could have been included in the survey. However, it was deemed better to take viewpoints of those responsible for overseeing the operational functions and creating a working culture within the bank that would impact the introduction of a new possibility. Bank managers, including financial and I.T. managers, have to foresee sales projections and ensure that the bank employees provide a high level of customer service with the infusion of new technology and faster service; hence they are closer to the functionalities and the outcomes of application modernization in the bank services.

Since 10% of the entire population is considered to be the best minimum sample size, it is anticipated that at least 30-40 business decision-makers in each category, such as bank managers, financial and I.T. managers, etc. would be included in the sample (Bullen, no date). Invitations would be sent via emails in the city so that the maximum number of bank managers from different bank branches, including the one in which I worked as an intern, could be included. The ethics of research would be taken into high consideration. Informed consent and confidentiality would be certified through the first emails sent to them in more than 30 different bank organizations (Yip, Han, and Sng, 2016).

Section 7: Data Collection, Editing, and Coding

Data collection would be done through emails since it is the most convenient way for the managers to fill the questionnaires present in the emails whenever they feel comfortable. A time span of one week would be provided to them for thoroughly completing the responses to avoid haphazard responses that might create response bias. Also, it is well-understood that the response rate must be high for a study to be reliable to prevent nonresponse bias (Fincham, 2008).

As the study would involve a quantitative survey, statistical analyses would be conducted, for which editing and coding would be done accordingly. A 7-point Likert scale would be used to gain responses from the managers about the effectiveness of application modernization within their bank facilities so that accurate opinions could be gauged after quantification through central tendency and variation in statistical software like SPSS. The higher the significant relationships score between the dependent and independent variables, the greater the effect of application modernization over the model aspects.

Four types of validity would be ensured to remove any possible response bias or error in the data collected through surveys, including face validity, content validity, internal validity, and external validity (Ball, 2019). Online surveys are under extensive scrutiny for several disadvantages that they might pose for the researcher; therefore, validity would be certified beforehand to ensure that the collected data can produce reliable results.

Section 8: Time, Cost and Project Management

The time and schedule breakdown of the currently proposed research is given in section 10: appendices. Table 1 in appendix 1 indicates the weeks and months in which the relevant activities of the entire research would take place. The most time taken is by the report writing itself since it would be the draft that would start from day one with the topic selection, including introduction, hypotheses, writing about independent and dependent variables, finding the previous literature related to the topic, and finding the suitable methodology. These stages would occur in the black and white form alongside the actual conduction of the research activities so that every minute detail and step is not missed and written as soon as it takes place. After proofreading and finalizing it with a detailed conclusion, the final report submission is expected to be submitted at the end of June 2022.

The project’s costs would be minimal as the survey would be sent via email. The cost of transport for visiting bank offices to drop surveys (that is the petrol cost) or the cost of photocopying is non-existent. However, it has been researched that online surveys have their pitfalls, reliability, and validity of the survey would be guaranteed before disseminating them to the possible respondents. Research ethics would be strictly followed to make sure that the information gained from the participants is true after they get assured that confidentiality would be maintained at any cost.

Project management stages like initiation, planning, execution, and monitoring and control would be handled shrewdly so that each stage is carried out with serious concern for keeping the results authentic. Since the report’s primary recipients would be my educational institute’s teaching experts and the secondary recipients would be all of the concerned bank industry’s masterminds, it is well-calculated that the report needs to be clear and concise of comprehension, interpretation, and solicitation. Research protocols such as discerning research ethics and keeping the risks of bias and errors as low as possible would be checked in each project management stage to have enough confidence over the report outcomes.

Section 9: New and Relevant Research

The need for the currently proposed research has been felt through the literature review conducted in the previous section in this proposal. There are gaps in the previous research that need to be addressed through this project. It has a fresh approach as it would be the latest addition to application modernization’s effects on the service industry, specifically banking and financial businesses. Limited data came in when the research was conducted online regarding ‘application modernization’ The already published articles only talked about the infusion of information technology and not particularly or comprehensively about application modernization. Though information technology has several pros and cons, application modernization in the service industry has not been explored to the degree that it could answer the related research questions methodically and systematically.

Moreover, the restrictedly available literature mostly focused on the challenges and risks that application modernization could pose on the businesses that plan to implement it or have implemented it at present. Very few articles have talked about the effects on time to market, cost reduction, or the number of services it could provide. It is not perceived here that the outcomes of adaptation of application modernization in the banking sector would be positive; the research still needs to come with the actual results and analysis; however, still, there should be considered data that should highlight the concerning factors that the said adaptation would impact.

Additionally, insufficient literature is present from the journals that could fall in the scholarly or peer-reviewed category. The scholarly publication system is trustworthy since expert authors and reviewers check those articles to generate content in the research fields in every area. In the technology area, the scholarly articles related to the effects of application modernization are quite inadequate, which means that high-quality research related to this theme hinders somewhat advancement in this investigation field. The current project would help fulfill this need and provide fresh dimensions to the scope in the technological field.