Legacy System Modernization: What It Is, Why Make The Shift, And How

Some things get better with time. Friendships, for instance, or certain types of wine and cheese. Unfortunately, software does not come under this category, and it is something your company must not ignore.

Using old, underperforming systems will only slow down your team’s productivity and give you a bad name in the market as a brand that does not deliver on time. If your company has not updated its software in several years, it is time for a phased modernization.

Here is a quick guide to get you started:

What is a legacy system?

A legacy system is a set of outdated applications from a technological perspective and critical to day-to-day operations at the company.

These might be expensive and inefficient applications, but the company finds them too hard to replace, often because everyone is just too used to them.

For instance, pagers have been outdated for several years now but are still used commonly in the healthcare industry as a communication system.

Companies may have built an entire ecosystem of applications on obsolete frameworks over the years, making them integral to core business operations and thus difficult to replace.

The flipside, of course, is that the company is reliant on antiquated programming, clunky hardware, and more vulnerable security.

A system could also be classified as ‘legacy’ if it cannot meet the needs of new systems that the company brings in due to architectural or design discrepancies.

Overall, CIOs end up devoting about 40% to 60% of their time managing and maintaining legacy IT systems — a significant waste of time.

What is legacy modernization?

Now that we have seen what legacy systems are, it is time to understand how to modernize them for the sake of your company.

Essentially, modernization involves some or all of your current IT systems to meet your business goals best and enable your business processes. To make this a bit clearer, here are three key definitions you need to keep in mind:

• Legacy software — The applications your company has been depending on for the last several years.

• Legacy software modernization — The process of replacing and/or updating all systems and processes that have been identified as inefficient.

• Re-platforming — This means shifting the base platform of your business systems to a more modern and/or operationally efficient one. 

You might have the best visionaries on your team, but without the right technology at your disposal, there is only so far your digital transformation can go.

Businesses these days are rapidly transforming digitally with tools like Apty, WalkMe, and other best AppLearn alternatives. But what they do not realize is that it is necessary to properly drive the adoption of these tools and ensure they are constantly updated.

Unfortunately, most legacy systems just are not equipped to handle today’s requirements, let alone futuristic innovations — which is why you must not hesitate to get an upgrade.

Why do you need legacy modernization?

Legacy modernization is not just about pulling the plug on old systems. Instead, it involves an organization-wide shift away from the legacy system towards a new way of doing things.

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While you may meet some cultural resistance at first, legacy modernization brings major benefits for all aspects of doing business, and not just IT. So here are some compelling reasons for you to take the plunge and make the shift:

1. With the latest technology, you can design and implement digital transformation solutions that give you a clear competitive advantage over other brands on the market.

2. Daily business processes can run much more smoothly and with negligible risk of glitches or failures. This improves productivity and boosts employee morale, as they no longer have to deal with the frustration of things getting stuck.

3. Old IT systems are often hard to integrate with other critical software, like CRM or accounting systems, making the IT team’s job much harder.

With modern systems comes easy integration, which means less time spent on set-up and maintenance. You can also easily plug into third-party APIs — like Google Calendar or Google Maps — to maximize your functionality.

4. Old software is much more vulnerable to security breaches. Modern systems come equipped with multiple levels of protection to ensure that your data is always safe.

5. Having a modernized IT stack makes it easier for you to scale and update as necessary, which keeps your business future-proof.

6. With up-to-date processes comes better performance on all fronts, which means your customers and stakeholders are happier.

7. Your financial systems will benefit from prompt and secure transactions and reduced downtime, which means less money (and time) wasted on overhead expenses like redoing books of accounts or calculating taxes.

How to go about the legacy modernization process

Particularly in the wake of post-COVID digital transformation, modernizing legacy systems is a must for any company that hopes to thrive amidst the competition. However, simply going ahead and overhauling everything is not a good idea either.

You need to understand both the risks and the rewards involved for each change you make and the specific goals that the change will help you accomplish.

We recommend a three-step approach to legacy system modernization for companies, which we can lay out as follows:

Step 1: Evaluate your legacy systems thoroughly

The application modernization relates to the obstacles or concerns created by the legacy system due to its structure or functionality, can be classified under two heads:

• Business drivers including business value, business fit, and agility. If the old system does not fit sufficiently into the new digital environment, provides inadequate business value, and holds the business back from the level of agility it needs to be at, there is a need for modernization.

• IT drivers include cost, complexity, and risk. If the IT ownership for the current system is too expensive, too complex, or too risky, modernization is called for.

Ideally, modernization options should be propelled by both business and IT drivers.

Step 2: Evaluate different modernization options

Once the problem and the corresponding objective have been identified, it is time to decide the exact nature of the modernization. This includes seven types of modernization:

• Leveraging and extending the application features by encapsulating its data and functions, making them available as services via an API.

• Restructuring and optimizing the existing code to improve its non-functional attributes without affecting the external function.

• Migrating to a new runtime platform, making some changes to the code but not to the code structure or the software’s features or functions.

• Redeploying the application component to more modern infrastructure (physical, virtual, or cloud) without changes to the code, features, or functions.

• Redesigning or rewriting the application component from scratch while preserving its scope and specifications.

• Materially altering the code to shift it to new application architecture and exploit unique and better capabilities.

• Eliminating the former application component and replacing it based on new requirements that the business has.

Step 3: Choose the modernization approach with the most impact and value

Overall, modernization aims to maximize your business capabilities and functions while taking associated costs and risks into account.

To that extent, re-architecturing involves medium costs and risks, while rebuilding or replacing systems is more expensive but brings more results.

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After weighing each of the options mentioned above and evaluating the degree of the effect it will have, you should decide after considering each of the options discussed above and evaluating the degree of the effect it will have. The option that brings you maximum impact with minimum effort is the one to go for.

Legacy system modernization is here to stay.

Without a doubt, modernizing your legacy systems is necessary to optimize your business operations, improve client experience and boost revenues. If you want to grow, you must modernize. Period!

Therefore, to start the modernization process, you can either rebuild it entirely or upgrade it gradually (or in phases) so that it does not hamper your day-to-day operations or distracts your team.

Legacy system modernization vendors should be able to help you take the right approach to achieve this goal. Nevertheless, do not avoid giving your systems a much-needed facelift.