Since the last few decades, we have been experiencing a dramatically accelerating pace in developing and adopting new technologies in business processes. So, what was once a perfect business solution for your company has soon become outdated, obsolete, and useless.

Your out-of-date technologies that were popularly available at the time of project building turn out to impose speed, security, design, and scalability restrictions.

Moreover, in the face of technological innovations and disruptions, businesses need to reconfigure their approach and modernize their legacy systems to stay relevant. 

However, legacy system modernization is a lot more than just updating your systems.

If you've already decided to modernize your legacy system but are unsure of where and how to begin, this blog post is for you.

We will discuss the right legacy modernization approach and the benefits it can bring.

What is Legacy System Modernization?

Legacy systems refer to old and outdated applications, processes, software, or infrastructure critical to day-to-day business operations. 

It’s incorrect to deem them useless because of their age. Instead, they are considered obsolete because they no longer serve the purpose of a business or function well in a changing world with changing requirements.

Moreover, legacy systems require a big budget and a lot of effort to maintain, improve, and integrate with the latest systems. Therefore, modernization becomes a necessity. 

Legacy requires modernization. Otherwise, they can start exhibiting critical issues anytime.

While you may feel that such legacy systems are essential because they still meet the requirements they were initially designed for. However, these systems are based on obsolete technologies that are no longer used commonly. 

For example, the USA IRS (Internal Revenue Service) still uses its 60 years old computer codes, written in an assembly language, to run the tax filing processes. With every passing year, the number of programmers who understand such codes is dwindling. Besides, there were instances of failure in processing systems, and they have become expensive to maintain.

Legacy System Modernization

Legacy modernization is, thus, a process by which you can update and optimize your business systems to acquire operational efficiency, address any technology constraints, meet customer expectations, and support integration with newer platforms.

So, the process of modernizing your legacy systems involves improving your enterprise's existing digital platform with the support of newer, modern, and better solutions.

You can compare the legacy transformation to a modern-day application update. It merges the strength of old business applications with updated technologies to build a platform that aligns well with business objectives.

There are many ways you can move towards a successful legacy modernization guided by the strategic priorities of your enterprise. 

For example, you may opt to completely rip and replace your legacy systems with a new system, or you may choose to pick and adopt specific technologies and processes to your existing system.

Whatever the case may be, modernizing legacy is about bringing your entire enterprise up to speed with the current digital environment.

Why is It Necessary to Update the Legacy System?

Many companies have understood the need for legacy modernization and have started taking steps toward it.

Logicalis reports, more than 40% of the CIOs considered “complex legacy technology” a significant barrier to their digital transformation aspiration. Moreover, the majority who were surveyed confirmed that their organizations' digital transformation was their prime focus. More than half had plans to change their existing systems to overcome obstacles in digital transformation endeavors. 

Let’s dive deeper into the reasons why you should consider updating your legacy systems.

The cost of maintaining a legacy becomes burdensome with time.

There are expenses related to housing outdated legacy systems.

Companies that use older, legacy infrastructure face difficulty getting timely IT solutions.  There will come the point where you'll be spending a lot of money to maintain your legacy systems—even more than what you would if only you had updated your system on time.

For example, the Government Accountability Office report reveals approx. 337 million USD is being spent annually to maintain the federal government's ten legacy systems. 

Because of the complicated codebase and functionality of the legacy software, updating it would need more time and financial resources than modern software would. 

Besides, most legacy systems need expensive hardware and infrastructure to maintain as it ages. Legacy infrastructure modernization is thus a necessity. Maintaining legacy data that is scattered across multiple databases is also a cost-intensive exercise.

So, the expenses saved by modernizing your legacy applications can come in different forms – lowered maintenance requirements of updated systems, lesser security issues, and reduced overhead. 

The dwindling security of legacy systems is a considerable risk.

Lack of security updates (often provided by the system vendor) is one of the most significant risks of using legacy systems. In addition, many IT issues such as handling vulnerable software/applications/infra by evading virus attacks can be a tricky job when you're left unassisted.  

Moreover, cybersecurity is a concern for most legacy applications. The outdated legacy applications usually have gaps that allow hackers access to their network.

Such attacks by hackers can create a business-wide bottleneck in your company, leading to an immense loss of revenue.

Legacy System Security

We still remember the terrible WannaCry ransomware attack in May 2017, which displayed old systems' vulnerability, not supported by Microsoft. As a result, 300,000 plus machines operating on older Windows OS – XP, 8, and Server 2003 were affected by this malware in different countries because they all lacked security updates.  

Technology companies combat this type of problem by regularly releasing security updates for at-risk software. However, once a legacy system stops getting support, you won’t receive any security patches. In addition, backup and disaster recovery will become challenging. You’ll be worried about substantial data loss.

There is a growing shortage of tech talent that supports legacy applications. 

Legacy systems are outdated, and they need specific skills and expertise. As the technology becomes obsolete, so does the skillset of professionals who manage it.

With time you may not find the skilled professionals for these systems. Reason – Young and upcoming developers are focused on learning new technology, while most of the COBOL and other assembly language developers who’ve been working on the legacy systems are retiring. Plus, many old, complex applications lack proper documentation.

While seasoned IT professionals gear up for their retirement, the companies that depend on them face a skills shortage.

So, in the future, finding people with the required qualification to manage legacy will be difficult and expensive for companies.

Legacy systems don’t comply with modern regulatory compliance requirements.

If your enterprise has to follow specific regulatory compliances, legacy systems with outdated technology will prove costly.

Compliance standards, such as HIPAA, GLBA, PCI, and others, require that the technology your business processes use works well with them. 

In case it doesn't, you may have to face severe repercussions in the form of fees and penalties. If your application experiences data breaches (because of security holes in your legacy system), that may happen.

Besides, laws & regulations related to data storage and protection keep evolving and changing with time. So you must readjust your system to adhere to these regulatory requirements.

Integration issues in legacy, since "old" and "new" tech rarely work together.

Modern software platforms heavily rely on various third-party APIs to access capabilities, such as geolocation, data sharing, user authentication, etc. These APIs ensure you use the existing, tried solution at a low cost.

For example, the Uber application relies on data provided via the Google Maps API instead of Uber developing its solution for navigation by the drivers. 

These technologies are ready for integration by default. However, obsolete and older legacy technologies lack compatibility with third-party integrations.

If you still try to connect your legacy software to a third-party service, you’ll need to build custom APIs that’ll require a significant time and a lot of custom code. And, even then, the final integration may not work as well as you expected it to work. With incompatible legacy systems, you will keep losing revenue and customers. 

Legacy systems slow down business efficiency and growth. 

When your business grows, you’ll have changing technology needs. 

Ask yourself – “Can your legacy system support the soaring production capacity and your company’s growth”? 

With a constantly evolving business, your system should keep up with the pace. If not, you’ll be forced to align your business to your legacy system, and THAT will not be a good idea. It will ultimately “stunt” the growth of your business.  

Businesses bound to legacy lack the agility to adapt to the upcoming challenges. 

It isn’t easy to migrate from tedious legacy IT to agile and digitally-enabled modern IT. However, it is still necessary to meet the latest IT demands. Because of their inability to be updated and modified, legacy holds back innovation, resulting in losses. Moreover, outdated legacy systems are less efficient, which hurts your business's overall productivity.

Legacy systems lead to lost business opportunities.

If you decide to keep investing in your legacy software’s maintenance and use, you leave little room for innovations in your business. 

When you do not adopt newer technologies and business processes, you are stuck with an old system, letting your business's better and more unique opportunities go unnoticed. This means your competitors will find opportunities to outperform you and acquire your market share.

In a business world that’s increasingly defined by technology, your system’s performance, integrations, and support determine whether you get new customers or lose them to your competitors.

These are enough reasons to not hang on to an old and outdated system only because you want to save a little bit of money. 

Instead, go for legacy modernization.

How to Start Legacy System Modernization?

The Mainframe Modernization Business Barometer report - 2020 confirmed that 74% of organizations that started a legacy system modernization journey failed to complete it.

Following the right approach is key to a successful Legacy System Modernization in 2024.

Steps to start legacy system modernization

If you think your legacy systems are creating hurdles in your company's digital transformation, here is a step-by-step process to follow. 

This will help you reduce expenses and become agile.

Let’s check all the steps quickly.

1. Evaluate your legacy systems with six drivers

Before implementing any legacy modernization techniques, you must assess your system's present capabilities and adaptation along with future business requirements. 

Carefully think about the parts of your systems that are still functioning well and have stood the test of time. Then, after careful evaluation, you will understand if the entire system needs an upgrade or only some specific components.

Remember, legacy modernization initiative is driven by issues and concerns created by outdated functionality, architecture, and technology.

Evaluate your IT application based on the following legacy modernization factors. These are the driving factors that compel enterprises to explore different system modernization strategies.

No Driver Driven By What does it imply?
1 Business fit Business Perspective Your company’s IT growth and innovations are driven by its business vision/goals.

If your legacy system no longer meets the new requirements imposed by evolving digital needs, you must modernize it to align and fit well so that it stays relevant.

Upgrade it so that it evolves and provides better business value.

Check if your legacy solution lacks the agility to evolve and keep pace with the changing demands. Such solutions can be cost and risk liability for you.
2 Business value
3 Agility
4 Cost IT Perspective There is always pressure to lower the operating costs of businesses. That is a significant factor for modernization efforts by companies.

Check if the legacy technology/system is too complex to modify and update. Then it's time to make a decision.

If your legacy's security, compliance, or scalability is being compromised, it’s time to go for modernization.
5 Complexity
6 Risk

2. Assess modernization options 

Once you’ve identified the problem area to be resolved, look at the various modernization options. First, let's check the different modernization options based on the ease of implementation. 

Let’s take a quick look and assess which one is easier, less risky, and the impact it will have on your system.

  1. Encapsulate. If your application generates excellent business value but is constrained by an outdated platform, go for this option. It is also known 'wrapper approach.' With this method, you can create a new wrapper of the layer around your existing application and enhance its capabilities with the help of APIs. It is the best way to extend the life of your current application. 
  2. Rehost. With the help of its Lift and Shift philosophy, rehosting redeploys your application component to other infrastructure (physical, virtual, or cloud) without altering its code or features.
  3. Replatform. Migrate your app component to a new runtime platform, making minimal modifications to the code, but not the code structure or functions.
  4. Refactor. It restructures and optimizes the existing code of your application (but not its external behavior) to remove technical debt. In addition, it improves the nonfunctional attributes of the app, making it suitable for future modernization endeavors.
  5. Rearchitect. Here, you can materially alter the code of legacy elements to shift it to new application architecture and exploit better capabilities. 
  6. Rebuild. This is about redesigning or rewriting the app component from scratch while preserving its scope and specifications. Its purpose is to rebuild a legacy system from start to finish while keeping the same specs and a similar design in place and updating the critical aspects of your legacy.
  7. Replace. If a custom solution is already available that can deliver more value, go for replacing technique. Remove the legacy application component altogether and replace it with a custom-made off-the-shelf solution that serves the purpose.

3. Select a modernization approach that has the highest effect and value

The final step would be to choose the right modernization approach by mapping all the available modernization options. Consider their impact on legacy architecture, technology, function, costs, and risks.

Weigh all the given options and identify how they will affect the system with less effort and still produce a maximum positive impact.

Strategies for legacy system modernization

There is no need to build new tech stacks for your company from scratch. You can stay relevant and competitive with only the required updates to your system. But, of course, everything depends upon what problem you're trying to solve.

As you embark on the legacy modernization journey, you must follow the below-mentioned approaches.

1. Make the mindset modernization

It’s about time you start thinking of software as a strategic business tool and not just an IT thing. 

It happens with a mind shift from the old way of thinking about IT applications to a new way of thinking about business systems. Think about how these systems support your business. Which application is business-critical? Does it help revenue?

2. Know which type of modernization journey you are on

Organizations like yours can embark on a few applications or software modernization transformation journeys.

  • Datacenter transformation – It involves automating data centers and migrating to the cloud. 
  • DevSecOps transformation is about quickly and frequently delivering high-quality, secure, and compliant code to production. 
  • Modernizing application architecture - It involves practices like micro-services architectures or API-first design.

3. Build a modernization timeline

Modernization Timeline Planning

As you build the timeline for the modernization endeavor, consider everything.

  • What did your needs evaluation reveal?
  • How critical is the modernization process for your business?
  • are you willing to wait and delay the transformation until the rest of the milestones are completed?
  • What resources are needed? 

Walk yourself through all the questions and define a timeline that perfectly fits your needs.

4. Document all the changes

Documenting the modernization process is essential. However, you must note that documentation doesn’t end when modernization begins.

You must record any changes you introduce to the process—It’ll prepare you for any future growth and technical revisiting you may be doing later.

Modernize Your Legacy Systems with Imaginovation

Migrating from a legacy system to a newer and modern one can be unsettling, but trust us, it brings great benefits to your business. Legacy modernization helps you keep up with the latest and trending technologies and gain better business value. 

If you want to know if your legacy system needs an update, contact us at Imaginovation. We’ll be happy to help you stay competitive with modern and peak-performing technology. 

Imaginovation is an award-winning web and mobile app development company with vast experience crafting remarkable digital success stories for diverse companies. Let's talk.


Pete Peranzo

Frequently Asked Questions

What is meant by Legacy System?
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