Are Legacy Systems Holding Back Your Business Growth?

In order to operate in a world that is moving towards being primarily digital, your company’s system and software will either help or hinder your capacity to expand and retain your competitive advantage. However, the software capabilities required to keep up with changing business dynamics are behind that speed. Enter legacy application modernization.

Legacy system modernization requires businesses to let go or upgrade their existing software, architecture, or application, keeping them from meeting their business objectives and pushing them a step behind in attaining a competitive edge.

In this blog, we’ll be diving into some of the key questions that surround legacy software modernization, including:

What do we mean by Legacy Application Modernization?

Let us start answering this question by first looking into what is a legacy system and how to identify one. 

Legacy systems is a concept that can be understood as an old piece of software, an incumbent technology, or a system that slows down the organization’s ability to expand, grow, or keep up with the changing market demands. When a system stands unable to support the organizational needs, it can be called a legacy system. 

Here’s how you can identify if you have a legacy system in place. 

• It is no more supported by the vendors
• It doesn’t get any security updates 
• It doesn’t integrate with modern software 
• You have to find workarounds for the processes
• You have to wait for it to load, finish, or simply run
• The maintenance cost is extremely high. 

Even though a legacy system could be old or outdated, it is not inherently obsolete, however. For many businesses, legacy systems are essential to their daily operations and can operate at acceptable output levels. They utilize the best application modernization tools for keeping their legacy software running.

By 2027, the global application modernization tools market is projected to reach a valuation of $36.86 billion because the requirement for digital transformation is driving the increasing demand for application modernization tools.

When a legacy system reaches a certain maturity stage, businesses should consider updating it with contemporary programming languages and protocols. Therefore, it is critical to understand the importance of legacy application modernization approaches, as this can help in boosting an IT organization’s digital modernization initiatives.

Let’s now move on to understanding the legacy software modernization strategies that are vital to the success of a business. 

Top Eight Legacy System Modernization Strategies Crucial to Your Business Success

Digital transformation is all about an organization’s broader attempt to increase productivity, become more creative, and promote growth. A legacy application modernization plan sits in the technology branch of the people-process-technology triangle as part of digital transformation. Legacy system modernization techniques, especially ones around older versions of applications, are difficult because they are custom-built in a single monolith style compared to a microservices model. This means that the software – data, network configurations, and security are all tightly coupled with the base infrastructure, making it difficult to upgrade any one component. You evaluate the demands of your company, choose which aspects to update first, put together a plan, and carry it out.

Below outlined are the 8 strategies for developing a plan for legacy system modernization. 

1. Establish Your Software Modernization Goals

Simply switching your COBOL/CICS (a 60-year-old programming language that is still not out of vogue) environment to Java won’t solve every problem. It is preferable to connect legacy software modernization initiatives to your business and technological goals— scalability, additional features, and a quicker time to market.

For instance, updating billing software and incorporating it with a fresh e-commerce platform could increase client satisfaction and save service expenses. This is due to the fact that fewer clients need to get in touch with the company regarding bill-related issues.

Depending on your industry, market, and goals, you can determine how legacy system modernization might affect the company’s revenue, market share, customer experience, and more.

2. Identify the Issues

Yet another vital legacy application modernization strategy is to detect bugs. It’s time to identify the issues further if the old system doesn’t meet current organizational or IT needs. Find out the issues with your digital solution that frustrate the users. Choose the relevant user stories.

However, it’s equally crucial to comprehend what legacy software does well. The knowledge of what works and what doesn’t can be used to choose the best legacy modernization strategy.

3. Assess Modernization

Analyzing legacy modernization calls for a methodical approach that includes identifying the needs, analyzing the present status, assessing modernization possibilities, and creating and putting into action a thorough modernization strategy. Below are the top 4 legacy application modernization solutions that must be considered.

Replatform 

This legacy modernization approach involves applying minimal changes in the legacy system and then moving them to another platform. Although it does not change the present system’s code function or structure, it allows you to host the applications on a less expensive platform. While the re-engineering of projects takes time, the re-platform approach is fast and designed to keep underlying business logic intact. 

The situations where the approach makes the most business sense – 

• There are very few functionalities that have to be modernized 
• There is a business need to migrate a few processes to the cloud
• There is a financial crunch in the company

Reface

This legacy modernization solution surrounds scraping off some information from your legacy system and adding a graphical interface. It helps make your old software look new with some new UI features. The approach makes procuring any new technology unnecessary, thus saving on the licensing cost. 

The approach is best suited in cases where –

• The management team has a strong association with the legacy application. 
• IT teams are highly skilled in the old technology and know the ways to make continuous improvements. 
• Although the software is old, the technology base is modern (e.g. J2EE/Java)

Rebuild 

Here, you build the enterprise legacy system from the ground up. You can consult with your enterprise software development company (like Appinventiv) on whether to rebuild the entire system or simply rebuild the core parts of the software portfolio. The approach, although extreme, offers the greatest returns and best competitive edge. 

The approach is chosen when – 

• The present system is unable to support changes demanded by the market. 
• Its vendor no longer supports the underlying technology
• The present technology is very expensive to license

Appinventiv experts worked with the world’s biggest furniture retail brand IKEA by creating a robust ERP system. In order to fully understand the challenges IKEA customers encounter when shopping in-store, our experts first began the customer journey mapping process. They used an agile development methodology to design the ERP solution, which would serve as the initial point of contact for all walk-in customers of IKEA.  

Our committed efforts in developing the ERP system resulted in the engineering of a solution that is currently being deployed across 7+ IKEA stores in the UAE. The retail establishment now promotes the solution as the most important tool for calculating ROI.

Extend and Migrate 

This is one of the most well-strategized legacy software update methods. Here you gradually extend your legacy system and introduce new features and modern applications on a milestone basis. This way, you get to perform legacy systems updates without replacing them altogether. It is one of the lowest-risk ways to transform the system by moving one component at a time. And since only one component is migrated, the cost of failure and business impact is very low. 

The situations where it suits best – 

• When you are looking to replace the entire system one element at a time. 
• When there are only a few components that contribute to your current business process. 
• When you have to change the current system from batch to real-time
• When there’s a need to modernize the outdated database with an RDMS system.

These four legacy application modernization solutions are common among all enterprise digital transformation processes. 

4. Choose the Architecture

The team then determines the ideal architecture or legacy modernization approach at the three primary levels of application, database, and platform/server based on the selected strategy.

• Do you want the platform/server in the cloud to lower capital expenditures (CapEx) and raise operational expenditures (OpEx) or in your data center for more control?
• Do you choose a less expensive, open-source database like MySQL or Postgres if the program works well as it is? To do that, the program will need to be re-platformed to use the new database.
• Do you wish to replace your data center with the cloud and relocate both the application and the database there? This means higher immediate costs for a long-term reduction in IT staff.

Although the enterprise architect is responsible for making these choices, the business is also affected. The architecture you choose must accommodate automated processes and technologies like DevOps, DataOps, and other pipeline delivery paradigms in order to achieve that level of acceleration and value.

Bonus Read- Cloud-Based POS vs Legacy POS Systems

5. Choose the Team That Will Carry Out the Plan

To ensure effective legacy application modernization services, it is essential to choose the right team. The majority of legacy application modernization initiatives follow the following personnel hierarchy:

The program is led from the top by C-suite executives, including the Chief Information Officer (CIO), Chief Technology Officer (CTO), Chief Information Security Officer (CISO), And Chief Security Officer (CSO). 

They receive reports from the enterprise architecture team.

Both the business and IT teams serve as points of contact for their respective communities.

The enterprise architecture team balances the capabilities of IT with the demands of the business community for goods and services. The team must also develop the specifics of a plan to modernize outdated applications in order to carry out the overarching business goal.

6. Establish Success Metrics

Choosing metrics based on your initial motivation is the best approach to determine the effectiveness of your legacy application modernization. 

The more data you comprehend more data-driven insights you will have to enhance the modernization of your legacy applications.

7. Automate Modernization

The goal of legacy software modernization is to increase value for the company, which necessitates automation. Fully automated migration, which refactors legacy data and code to contemporary platforms, is a more effective method for achieving legacy modernization. 

Additionally, it makes it possible for organizations to gradually implement digital modernization without affecting daily operations.

Furthermore, completely automated digital migration enables businesses to move forward with legacy transformation at their own speed. For instance, refactoring a legacy program can result in “quick wins” by lowering risks and enhancing IT effectiveness.

8. Start Monitoring 

The modernization of legacy applications does not always immediately reap the rewards, as there are also some persistent legacy application modernization challenges. Therefore, towards the conclusion of the project, your approach should incorporate monitoring and optimizing. As you examine the landscape of accessible tools, consider the following factors:

• To make sure that your modernized application satisfies corporate goals and stays within budget, think about how to track its performance.
• If the modernization of legacy applications uses the cloud, make sure to keep an eye on both your environment’s performance and the price of cloud computing. Although many businesses use the cloud to cut costs, they must use it wisely in order to benefit from any financial savings.

Let’s now check if there’s any hidden cost of legacy software modernization.

What Are The Hidden Costs of Legacy Systems?

Organizations may still be using legacy systems, which are old hardware or software programs. Even while these technologies may still be useful, they have a number of unanticipated costs that might harm the productivity and profitability of an organization. The following are some hidden expenses associated with legacy systems:

Maintenance Costs

Systems and applications become difficult to manage over time. Every other alteration adds up a level of complexity – these changes over a period of time introduce glitches. It takes very less time for even simple updates to become a time and money-consuming task. 

Support costs

With the systems becoming old and outdated, the vendor support also lowers. So if you have been relying on third-party software providers, it will become all the more difficult to keep the software running if they stop providing the support altogether. 

Legacy skillset costs

The upkeep of a legacy system calls for a legacy skillset. Once the employees carrying those skills retire, the talent pool shrinks. What makes it worse is that the market, which has now moved to more new-gen technologies and systems, curb the demand for legacy skills even further. 

Agility costs 

Most of the legacy systems are difficult to change. So what happens when you have to add a new feature or application to the business? Here’s what – projects run longer and over budget. You keep encountering roadblocks during the project. Testing new features takes time since it is difficult to measure how well everything fits with the old system. These events tend to up the integration costs as well. 

Up until this point, you must have gathered insights into why legacy system modernization services are necessary (in many ways a prerequisite) for any business looking to invest in enterprise app development. 

We don’t want to get down to the reasons why IT legacy modernization is necessary since they can be easily compressed into three reasons:

• High business operation cost 
• Lack of ability to maintain a competitive edge
• Encountering challenges in digital transformation adoption 

While it is an expensive affair to update the legacy system, modernizing it also requires enterprises to spend a substantial amount of money. Getting the most out of your spent dollars requires you to carefully consider which software modernization strategy is good for you. 

But how do you decide that? 

• By ensuring that the legacy system is actually outdated and not for you anymore 
• By having a complete understanding of how the different legacy modernization models work.  

How can Appinventiv Aid Your Modernization Efforts?

Whether you are looking to re-platform the legacy system or are looking to integrate a new solution in the system, or simply want to re-architect the enterprise system, opting for the best-in-class legacy app modernization services from a skilled enterprise software development company is necessary for both short and long term outcome and success. 

With extensive expertise in handling enterprise-level projects, our in-house software development team carries expertise in legacy modernization. Right from defining goals and establishing scope to integrating systems in your legacy software and working on a milestone-based migration, our team hand-holds you through the entire process. 

Get in touch with us to design your business objective and understand the best route to migrating them into digital-first software.

FAQs

Q. What is legacy application modernization?

A. Modernizing legacy applications involves converting out-of-date software applications to more current, effective ones. This entails updating the application’s technological stack, revamping or replacing its architecture, and enhancing its functionality to satisfy present-day business requirements. Modernizing a legacy application aims to increase scalability, decrease maintenance costs, and enhance performance, security, and usability.

Q. What are the benefits of modernizing legacy applications?

A. Here are some of the top benefits of legacy application modernization:

Enhanced performance: By the modernization of legacy systems, organizations can handle greater workloads and process data more quickly. These improvements include speed, scalability, and efficiency.

Enhanced security: Due to outdated security measures, legacy applications may be susceptible to cyber-attacks. By enhancing security controls, modernizing the application can lower the risk of data breaches and better secure sensitive data.

Better user experience: Modernized apps may provide a user-friendly, intuitive interface, enhancing the user experience and raising customer satisfaction.

Reduced maintenance costs: Maintaining legacy applications on a regular basis can be expensive. Organizations can cut maintenance expenses and boost overall effectiveness by modernizing the application.

Q. What is an example of legacy modernization?

A. Here are some of the top legacy modernization examples:

Cloud Migration: Moving apps and data from on-premises infrastructure to a cloud-based environment is required to migrate traditional systems to the cloud. This modernization method can offer high availability, security, scalability, and cost savings.

Re-platforming: Re-platforming is the process of migrating an application to a new platform without altering the code that runs on that platform. 

Microservices Architecture: Breaking down huge, monolithic programs into smaller, independent services that can be created, deployed, and managed independently is the concept of a microservices architecture. This modernization strategy offers greater agility, scalability, and flexibility.

Containerization: Application packaging into containers that can be used in different settings is known as containerization. This modernization method offers efficiency, scalability, and portability.

These legacy modernization examples can also be considered as the top legacy modernization trends followed by top-level enterprises. Legacy application modernization is, therefore, a strategy to increase the functionality, security, and efficiency of legacy systems, allowing organizations to remain competitive and satisfy current business objectives.