Strategic Considerations for Maximizing ROI in Modernization Projects

Modernizing legacy applications can feel like a financial leap of faith: the costs are immediate and visible, while the benefits can be harder to quantify and may take time to show up. In this episode of the Azure Essentials Show, host Catherine LaPlant sits down with Tanuja Shah to help you build a clearer, more defensible ROI story for modernization—what typically triggers the need to modernize, what to include on the upfront and ongoing cost side, and how to translate outcomes like faster innovation, reliability, and stronger security into measurable value. The goal is to help IT and business leaders move from “Is this cheaper?” to “Is this more predictable, scalable, and aligned to how the business needs to grow?” Top takeaways - Modernization ROI hinges on making the full cost picture explicit—separating upfront investment (code changes, migration, tools, training, security/compliance work) from ongoing run costs (cloud consumption, support, maintenance, continued skills). - The strongest ROI cases combine savings with value creation: reduced maintenance and downtime, improved scalability and performance, and faster release cycles that support revenue and competitiveness. - Decision confidence comes from benchmarking against today’s reality—including the “cost of doing nothing”—and using staged pilots and measurable milestones to refine the business case over time. Next steps - Inventory one candidate legacy app and capture a baseline: today’s run costs, downtime/reliability impact, release cadence, and the biggest risks (EOL, security/compliance, licensing). - Draft a simple ROI model with two scenarios (keep vs. modernize): estimate upfront effort, project ongoing cloud costs, and map 2–3 business outcomes to measurable metrics (for example, fewer incidents, faster deployments, reduced maintenance hours). - Use Azure Migrate to assess on-prem workloads and generate Azure cost estimates and modernization options to ground your planning conversation in data. Resources - Maximize value in your application modernization plan https://learn.microsoft.com/azure/app-modernization-guidance/plan/ - Overview of Azure Migrate reports (preview) https://learn.microsoft.com/azure/migrate/reports-overview?view=migrate - Cost estimation of Assessment in Azure Migrate https://learn.microsoft.com/azure/migrate/cost-estimation?view=migrate - Plan an application modernization strategy https://learn.microsoft.com/azure/app-modernization-guidance/plan/plan-an-application-modernization-strategy - More Essential resources! https://azure.com/AzureEssentials Related episodes - ROI 101: Fundamentals of Estimating Investment Value in the Cloud https://aka.ms/AzEssentials/238 - Watch more episodes of the Azure Essentials Show https://aka.ms/AzureEssentialsShow Connect - Catherine LaPlant https://www.linkedin.com/in/catherine-laplant/ - Tanuja Shah https://www.linkedin.com/in/tanujashah/ Chapters 0:00 In this episode… 0:20 Introduction 1:07 What does it mean to modernize? 2:00 Customer motivation 2:46 Upfront and ongoing costs 4:03 Cost tradeoffs 4:47 Start by scoping 5:28 Create a range estimate 6:01 Running two systems in parallel is often an overlooked cost 6:31 How to think about ongoing costs 8:00 Modernization moves you from a rigid system to a dynamic one 8:21 On Prem vs. Hosted costs 9:14 Modernization is more about Optimization 10:19 Tools to help you 12:20 Modernization can help grow revenue 13:36 Translating benefits into a ROI calculation 15:33 Crucial benchmarks to consider 15:51 Considerations to help build confidence 16:55 Key takeaways 18:08 Resources, questions, and comments