Unlocking Value Through Legacy Modernization  

When you order a glass of wine, you might choose a well-established vintage on the grounds that older can often be better. That’s fine for wine, but technology needs a different approach – it rarely improves with age That is why companies need to think about how to bring their legacy systems into the digital era.

Almost every large enterprise uses legacy applications for which upgrades and implementation of new functionalities can be costly and time-consuming. When the potential risks of out of date technologies are factored in, it becomes clear that business critical systems really need to be updated. But preparing a business for digital transformation is no easy task. Simply buying the latest technology does not mean that your company will automatically become digital. It requires a fundamental change in many elements of the organization, such as culture, business processes, hardware and more. This requires careful consideration and preparation of a comprehensive digital transformation strategy. Gartner predicts that every dollar invested in digital business innovation by the end of 2020 will require enterprises to spend at least three times more if they are to keep modernizing their legacy application portfolios.[1] So how can a business be transformed the digital future, and how can you choose the right approach to modernization?

Let’s start by considering what we mean by “legacy system”. It could be defined by age, the quality of underlying technologies, lack of support or inability to meet a company’s needs. Such systems have a negative impact on enterprises’ operations due to their limited capabilities that often make them difficult to maintain, support, improve, or integrate with new systems, due to incompatible architecture, underlying technology, or design. Legacy systems are often critical in business operations, yet may in fact hinder success with their monolithic architecture, lengthy code, unstructured databases and limitations in scalability. Therefore, migration to an advanced, modern system must be executed carefully to avoid any operational risks. Modernization of such systems is often a major project that can continue for several years, and so should be divided into manageable stages. In this way, the legacy transformation process becomes a profitable and precise way of continuing to benefit from legacy investments and avoid the costs and potential business impact of migration to entirely new software.

Due to legacy systems, IT managers constantly face challenges associated with:

  • High cost of supporting and maintaining expensive legacy systems
  • Inefficient, slow and less productive systems
  • Running critical applications on unsupported platforms
  • Slower time to market due to large, monolithic, complex and less productive systems
  • Limited ability to automate regulatory and business rules
  • Lack of skilled IT professionals to maintain legacy systems
  • Inability to integrate with current and future technologies


Overcome the Challenges of Digital Business

Legacy systems can be seen as a limitation on the business initiatives that rely on them. If you need to modernize legacy applications, the best approach depends on the problem you are trying to solve. Identifying and removing these barriers accelerates modernization, but it is important to know where your investment will be most effective. The key to success is to understand whether a problem is caused by technology, architecture or application functionality, and how each action taken improves those aspects. This helps you to choose the best modernization approach for your business. Still, when considering legacy system modernization there are a few possible options to choose from:

  1. Rewrite is used to migrate the coding to a more modern development language. This choice comes with the risk of underestimating costs and time required.
  2. Rehost or re-platform involves moving the existing system to a new runtime platform. For example, redeploying one application component to another physical, virtual or cloud infrastructure without amending the application code or modifying features and functionalities.
  3. Refactor is used to optimize an application to improve poorly functioning areas or overall performance. It streamlines and optimizes existing systems without changing external behavior to eliminate technical debt and enhance the components’ features and build. It may include recoding inefficient programs, and modifying data structures or data access to support the new target environment (cloud services, for example).
  4. Rearchitect the application and database to a modern framework retaining the existing business logic. A good example is amending the code of existing software to suit modern architecture and taking advantage of new and better capabilities of the application platform. This also helps to reduce the risk based on gaps in knowledge, such as existing nuance in a legacy system.
  5. Rebuild or rewrite the application from scratch while retaining its scope and specifications.
  6. Replace is used to remove the former system altogether and replace it, while taking new requirements and needs into account.

All of these approaches have their own advantages, disadvantages and risks. Replacement seems to be the most popular option. However, rehosting is often the most effective choice for organizations that wish to safeguard and future-proof their intellectual property. Independently, and prior to deciding which is the most suitable way to proceed, it is vital to have a clear picture of current status, and of how well the foundations are established. Making the wrong choice can lead to a massive loss in revenue, reduced productivity or even the need to write off a project in which you may already have invested significant sums. On the other hand, choosing the right option can jump-start business growth and save you millions in infrastructure costs. Choose the modernization approach with the most impact and highest value for your business.

No matter which method of legacy system modernization you select, it is important to understand (and therefore be in a position to avoid) the most common pitfalls. These include:

  • Not defining modernization goals. Right from the start, it should be clear for everyone involved in a modernization project what the organization wants to accomplish by modernizing the system.
  • Lack of understanding of the current state. Organizations planning to undertake legacy modernization should ensure that the initial assessment includes a complete view of existing infrastructure, hardware and software vendor contract terms, know-how about potential solution paths, and finally an evaluation of the application change rate.
  • Underestimating the importance of testing and planning. The success of legacy system modernization depends on the incorporation and execution of a detailed implementation plan and testing regime. Waiting to test until the very last part of the project it is not a recommended approach and carries many risks. Make sure your legacy modernization project has testing built in every step of the way.
  • Underestimating how many people should be involved in the legacy modernization project, and failing to be clear about who is responsible for what.
  • Insufficient time allocated for the migration to take place.
  • Not asking for feedback from the existing users. At the planning stage, ask them what they think, their tasks are, what would they like to change in the previous IT system and what they struggle with.

So far, no one size fits all solution has been able to cope with the various business requirements. The key to success is adding digital layers that complement the company’s functionality and support its growth. No matter whether your organization replaces the entire enterprise application with a new system, redeploys one application component or modernizes the whole IT infrastructure environment, any approach is typically better than none at all.

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[1] https://www.gartner.com/smarterwithgartner/7-options-to-modernize-legacy-systems/

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