Legacy App Modernization


It’s a fact of life: things become obsolete, and nowhere is that more true than in the realm of technology. While we accept as a basic premise that we need to update our computers, software and phones, so often we miss the big picture. Instead, companies neglect to properly update their overall IT systems and applications. At first this can lead to a minor lag, but eventually as bugs become introduced it eventually spirals into a bigger problem. Over time this can create business wide bottlenecks and untold loss of revenue and efficiency.

Additionally it is not just technology that becomes obsolete. Over times a business changes, as does the world. Legacy applications in their current form may no longer serve the current, updated needs of the business, nor fit into the context of the modern world. Take Western Union, which originally delivered telegrams. If they kept operating on that system they would have no place today, but they adapted to offering wire transfers of money. This is a metaphorical example of how a legacy system can be modernized.

Because there is an alternative. It isn’t necessary to continue scraping by with an outdated system that is constantly needing to be patched. Nor is it necessary to start entirely from scratch. By using legacy applications this modernization process is able to preserve much of value from the old system, but create efficiency where it was seriously lacking.

What Is Legacy Application Modernization?

First of all, legacy applications are any software applications that have become obsolete, either on their own merits, because they no longer serve the complete needs of a business, that they no longer properly function in a changing world, or any combination of these. With legacy application modernization, parts of the existing, outdated business applications are taken and modified so as to have the necessary modern capabilities and features.

By converting legacy applications into a contemporary interface the following advantages are realized quite quickly:

  • IT costs are reduced
  • The company achieves greater flexibility
  • Increased collaboration
  • Improved consistency

A legacy application modernization can be thought of as a system wide software update. Because the old legacy applications are used, many of the original pieces remain the same, lending to a robust platform overall, but one that can fully integrate with a modern interface, and in today’s world, that means being able to adapt to an increasingly digital world, including technology such as the cloud.

What Problems Does a Legacy System Create?

A legacy system by its nature presents the business with several problems.

  1. Overall Obsoleteness: By its definition a legacy system is obsolete, and is likely to be creating bugs, errors and critical issues. Outdated technology might have issues interfacing with new hardware or digital systems, such as the cloud.
  2. Loss of Documentation: Over time the system’s documentation can become outdated or incomplete.
  3. Employees Don’t Know How to Run Older Systems: Over time new employees will come in, only to find an outdated system. Eventually this will lead to a lack of knowledge to properly run the system.
  4. Support Ceases for Old Legacy Systems: Software used for legacy systems will no longer be supported.
  5. Decreased Business Continuity: A problem-filled technology system makes consistency impossible.
  6. Less Overall Reliability as a Business: It likewise leads to less reliability.
  7. Skyrocketing IT Maintenance Costs: The cost and energy to just maintain a legacy system increased exponentially as it becomes more outdated.

Perhaps one of a legacy system’s greatest dangers is the complacency it breeds. Nearly half of CIOs believe that the complexity of their legacy system makes updating prohibitively out of reach.

And remember, this long list of problems doesn’t occur in a vacuum. Very often one problem can lead to another or to many. For example, outdated documentation feeds into the loss of employee knowledge in running the system. This is why application modernization is so critical.

Related post: Bank’s Modernization Beats Pandemic Threat to Business

What Are the Benefits of Modernizing a Legacy System?

There are numerous benefits to modernizing legacy applications, with strong numbers to back them up. Here is a quick overview of the primary benefits:

  1. Reduced Costs: Modernized legacy software can reduce costs by 13%.
  2. Better Productivity: Developer productivity can be increased by 40%.
  3. Better Performance: Overall annual revenue can increase by 14%.
  4. Greater Agility: Greater efficiency serving existing customers and vendors and greater opportunities for new growth.
  5. Better Customer Support: The customer is best-served by a well-functioning system.
  6. Increased Compliance: Software non-compliance costs companies time and money. Modernization saves on both.
  7. Improved Security: Modernization allows for the latest security innovation, ensuring that a company’s is the best and most up to date it can be.

Lets take a closer look at the myriad of reasons why legacy application modernization can be so important for a business.

Reducing Costs

There are numerous ways that modernizing legacy applications will reduce costs but one of the most relevant examples to today is the ability to migrate to the cloud. Transferring to the cloud negates the need for the overhead costs of on-site datacenters. Cloud-based systems are much more scalable, and come in a variety of affordable rate packages.

Another huge cost saving area with modernization comes with maintenance. Companies are often spending a staggering 60% of the IT budgets just on maintenance of old systems. And remember, with an older system simply diagnosing can be severely hampered by a lack of documentation and knowledge from the team.

Better Productivity

With access to the most sophisticated software, developers will get more done and be able to work together more smoothly as teams.

One great example of this is in how cloud technology can best meet the needs of individual teams, be that increased data or greater bandwidth, in a way that many legacy systems simply cannot.

Better Performance

Just like the negatives of a legacy system can feed on each other, so can the benefits. The increased productivity and consistency leads to better performance and higher overall annual profits.

Greater Agility

Because the system-wide improvement instantly leads to a large company-wide one, overall agility is greatly increased on several levels. Better reliability, consistency, and most importantly efficiency allows for better service to current customers and opens the door to many new customers and opportunities.

Additionally, without being hampered by the problems of legacy applications, the launch of new products, from conception, design, planning through implementation is all much simpler.

The ability to adapt the company are endless. From being able to truly offer remote work because a web-based system allows for real time work from employees regardless of where in the world they are to offering higher value services to customers because of a greater and more consistent web-based presence.

Better Customer Support

First off, consider that some legacy applications are paper based. And for many that aren’t they are as reminiscent of paperwork that they might as well be. Efficient data entry, better project tracking and records that are kept securely in the cloud and can easily be called up correctly goes a long way in providing high quality customer support.

Increased Compliance

Non-compliance costs millions, yet managing and updating logs is time consuming and prone to errors in many legacy systems. Modernizing makes this process simple and automatic.

Improved Security

Although listed list, this is possibly the number one benefit of modernizing legacy applications. As security becomes more and more important for every company and nonetheless harder to maintain, having a legacy system will always leave a company vulnerable to attack or even innocent leaks.

In today’s world, to depend on security systems based on technology from several years ago is asking for trouble. Application modernization provides a company with access to the most powerful security of today.

How Does Modernizing Legacy Applications Work?

A large part of integrating the modern system into the legacy one is through open source code. This allows for the modernization process to re-architect the legacy code with open source, so that new developers are able to work on the system without specialized training in the company’s specific system.

But modernization can come in many forms, from re-platforming and re-coding to re-architecting and re-hosting, the path to legacy modernization can take numerous forms. And yes, it does include the possibility of an entire replacement.

But generally the idea is to take the parts of the system that are still of value and keep that while updating the rest of the system so as to provide what is needed and to be able to adapt easily in the future. Today legacy modernizations don’t have to provide the same disruptions they once did. In fact, when done right they are designed to disrupt as little as possible while providing as much benefit.

In fact companies can choose how intensely they want to take on a modernization at one time. There are three overall ways of approaching this:

  1. Complete Transformation: This means getting rid of the entire system and starting new from the ground up in one go.
  2. Module Level Replacement: This allows a company to replace a major part of the IT system at a time. Eventually all parts are replaced.
  3. Micro-Level Replacement: At this level the core system, technology and architecture remain unchanged while new technology is introduced for dealing with specific issues.

An Overall Look at Legacy Application Modernization

As defined above, legacy applications just refer to ones that are obsolete, they don’t have a specific date that makes them old. But often the systems are based in the 2000s, and beginning in the mid 2010s we saw a major uptick in the need for legacy application modernization, with a peak occurrence happening in 2019 and continuing into 2020. It is more vital now more than ever for enterprises to modernize their systems in the face of a greater need for security and the necessity of providing the benefits of resources such as cloud technology and better remote work options.

This is to say nothing of the huge benefits across the board in areas that range from annual revenue to developer productivity. In today’s digital world, system’s must be updated to make full use of technology and compete.

So while it can seem overwhelming to modernize applications, there are multiple options for how to go about it, and it is much easier than ever before. Additionally, the benefits far outweigh the costs:

  • Maintenance is costly in comparison to the manageable and scalable costs that a modernized system offers.
  • Employee productivity is maximized by utilizing improved team functions, new features, applications specific to the job and better opportunities for remote work.
  • Overall customer experience is enhanced with a specific application built for customer user experience.
  • Increased agility leads to increased revenue streams.

Here are a three examples of companies that have modernized their systems recently:

  1. While Equinix, one of the world’s major data sites was still well served by their legacy system, by installing a more robust platform that allowed for scalability they increased their overall agility as well as development team quality and speed of delivery.
  2. Financial services powerhouse Goldman Sachs was having difficulties with their old system: for a financial system the speed of transactions means everything and their legacy system was slowing them down. Modernization improved workflow and with that the speed of execution.
  3. 19th century American clothing company Carhartt worked with IBM to modernize their legacy applications. Digitizing allowed space for employees to work on initiatives and increased productivity.

While overall it is easy to become used to the day to day operations of a legacy system, what can seem its greatest strength is its greatest danger. That outdated system costs enterprises time and money on its own, while application modernization allows for benefits on numerous levels. While it can be an all or nothing proposition it does not have to be. And perhaps that is the genius of legacy modernization. It allows the company to take what is working, and leave the rest so it can develop what is needed and wanted to compete in today’s world.