Legacy application modernization: What it is and how to get started

Legacy application modernization is the process of reviewing and transforming outdated legacy systems within an organization to better meet business needs.  

The constant stream of new technologies, opportunities, and challenges means the modern organization must be agile to stay one step ahead. But how can a business step into the future when it's still rooted in the past? 

Legacy applications are a hindrance to progress. These outdated systems don’t just pose a significant security risk. They prevent agility, meaning organizations struggle to innovate in the face of new trends. This makes it difficult for companies to stay competitive and ensure business continuity. 

The longer businesses tether themselves to outdated systems, the more challenging it becomes to remove obstacles. In this guide, we’ll show you how this approach works and everything you need to consider to make modernization a success. Let’s start by defining it – what is a legacy system, anyway?’ 

What are legacy systems?

A legacy system is an old, outdated computer program or network that an organization still uses for day-to-day tasks. Consider a patient management system that runs on a decades-old mainframe or a finance business that depends on an on-premises document management system to store its personally identifiable information. 

These systems are often unsupported and inflexible, meaning they struggle to cope with modern business dynamics, evolving compliance, and shifting customer preferences. This instability also makes them prone to potentially detrimental errors. 

Beyond this, legacy systems are inefficient and prone to performance issues. A lack of updates and vendor support means they can be expensive to maintain — costing around $337 million annually, according to the U.S Government Accountability Office. 

So, why do an estimated 43% of banking systems and 74% of manufacturers still rely on outdated legacy software? For a start, the transition can be expensive. Many businesses adopt an ‘if it ain’t broke, don’t fix it’ mentality and believe the risks outweigh the rewards. But this doesn’t take the whole picture into account. 

Why modernize?

Legacy modernization may be a short-term hurdle for businesses to overcome, but the rewards warrant the challenge. Here are some of the top benefits to consider:

1.  Improved system performance
   Legacy systems have a reputation for being unwieldy and sluggish. Updating these systems with the latest technology can simplify operations and reduce the need for extensive employee training. Many of these systems also automate mundane tasks, freeing up more time for teams to innovate and focus on high-value processes. 

2.  Agile decision making
   ‍In the modern day, systems should adapt to the business — not the other way around. Legacy modernization allows organizations to add new functionalities, quickly change direction, meet evolving demands, and scale effectively without introducing new risks.

3.  Enhanced security and compliance
   ‍Outdated legacy systems receive little to no updates and often fall short of modern security protocols. As such, they’re rarely equipped to handle emerging threats. App modernization lets businesses meet the latest standards for data protection and compliance. 

4.  Cost savings
   ‍Outdated solutions are often unstable and packed with messy code that makes them tricky to update and improve. If a problem occurs, it can take days or weeks to fix, ramping up hidden organizational costs.
   
   ‍In contrast, modern cloud-based services are more cost-efficient. Businesses only pay for what they need, and issues are typically quick to fix with less requirement for technical expertise. 

5.  Access to data
   ‍Modern enterprise applications typically revolve around data. Consider a cloud-native architecture that can collate all of your siloed data stores in one place. This streamlines the process of collecting insights, ensuring you have all of the required information to make more informed business decisions. 

6.  Competitive advantage
   ‍All of the above benefits combine into one thing — more innovation, more opportunities for differentiation, and an edge over competitors that are still bound to outdated legacy systems. This will ultimately help you grow your business and improve your bottom line. 

How to modernize legacy systems

Successful modernization starts with an understanding of your current systems and applications. You need to inventory the strengths and weaknesses of your existing processes to identify what works well and where you can improve. 

Step 1: Assess your current systems

Evaluating your existing legacy systems will help you lay out actionable objectives that drive your modernization efforts. Start by identifying the key application components, whether they be:

• Hardware: Physical devices, mainframes, storage systems, or network infrastructure
• Software: Applications, operating systems, and middleware
• Databases: Both relational and non-relational databases your business relies on
• Dependencies: Examine which of these systems and software rely on each other 

From there, assess each component of your application portfolio through six crucial lenses. These are the challenges and concerns that act as motives for modernization. 

Performance

How efficient are your legacy systems in relation to speed and process handling? Does this reduce your efficiency? Evaluate current bottlenecks that impact productivity and user experience. 

Structure

Does the existing code of your legacy applications match modern standards? Evaluate structure and complexity to understand the barriers to scalability and agility that your legacy code imposes. 

Maintenance cost

Determine actual costs for maintaining the platform. Factor in expenses for debugging unexpected errors and the costs of upgrading other applications and systems to work alongside the legacy system. 

Security risks 

Does the outdated platform pose a significant cybersecurity risk? If the system can’t easily be updated by development teams to fix security vulnerabilities, it's likely there are loopholes that attackers can exploit. How could this impact your compliance efforts?

Scalability 

Can the system be adapted and improved to handle future growth? Many legacy systems struggle with scalability due to hardware or performance limitations. 

Business value 

How valuable is the current legacy system to your business operations? The more important this platform is, the greater the need to modernize and improve it. 

In general, the best opportunities for application modernization initiatives come from legacy systems that are hindered by several of these challenges. 

Step 2: Define your modernization goals

With an understanding of what you’re trying to fix, you can put an action plan in place for modernization. Align all your key stakeholders and answer these critical questions.

• What should our application modernization processes achieve?
• How could this modernization benefit us?
• When do we need this strategy to be completed?
• Who needs to be involved?
• How could this impact the business in the short and long term? 

Remember that the goal of application modernization projects is to maximize the value of your strategy while minimizing potential disruptions. Consider all avenues when setting goals to reap the rewards without introducing unnecessary risks. 

Different strategies for modernizing legacy systems

There’s a common misconception that ‘ripping it up and starting again’ is the only approach to modernization, but this isn’t the case. There are several legacy application modernization strategies available to you, ranging from relatively straightforward fixes to complex overhauls. 

1. Rehosting

Often called ‘lift-and-shift,’ this approach involves migrating your existing applications to a new infrastructure, like a virtual or cloud platform, without making any alterations to the underlying code or functionality. 

Pros

• Easy and fast to implement with few technical considerations
• Lower upfront costs since no major changes are required
• Minimal changes to existing operations

Cons

• Doesn’t necessarily fix any inefficiencies or limitations present in the legacy system
• Can result in missed opportunities for optimization and additional features

2. Replatforming

Replatforming involves making small but impactful optimizations to leverage the benefits of cloud-native features without altering the core application architecture. You’ll often see this referred to as a ‘lift-tinker-and-shift’ approach. 

Pros

• Businesses can make relatively risk-free adjustments to achieve better usage and performance
• Strikes the balance between system improvements and cost savings
• As the core business system remains largely unchanged, minimizes the risk of disruption 

Cons

• For systems that are significantly outdated, replatforming may not be enough to fix inefficiencies and limitations 
• Involves some level of code adaptation, making it more complex than rehosting

3. Re-architecting

This approach involves redesigning the legacy architecture to align it with modern standards. It often involves a total overhaul, leveraging microservices or serverless computing. As such, re-architecting typically requires a phased implementation. 

Pros

• Offers more flexibility and scalability — businesses can build a solution that provides greater long-term opportunities

• Improves reliability, security, performance, and security by leveraging up-to-date frameworks

Cons

• A resource-intensive approach requires a large budget and specialized skills
• Often takes time to implement, though this can be mitigated by adopting a phased approach

4. Rebuilding

Lastly, there’s rebuilding. This involves starting from scratch and rewriting existing systems with modern concepts. Rebuilding may be a necessary approach if the legacy application is too inflexible. 

Pros

• Allows an organization to take a fresh start building a system from the ground up that fully aligns with business needs and evolving trends. 
• Eliminates technical debt, letting a business remove all legacy issues and inefficiencies. 

Cons

• The most time-consuming and costly of all approaches to legacy modernization, with the potential for major business disruptions if handled poorly.

5. Hybrid approach

A hybrid approach involves combining several strategies for different components. This can be particularly beneficial when a business is dealing with multiple legacy systems and applications but doesn’t want to apply a blanket strategy to address the challenge. 

For instance, a company could opt to re-architect an inflexible but mission-critical system while rehosting smaller applications to allow a quick transition to the cloud. This offers the organization more flexibility, and helps to mitigate risks by allowing for a gradual, phased transition. 

Key considerations for modernizing legacy systems

Modernization is a must. But it isn’t without its challenges. Here are some modernization best practices that you should keep in mind to ensure a simpler transition. 

1. Risk assessment

If you don’t know where potential disruptions lie, you can’t mitigate them. Conduct a thorough risk assessment, evaluating the likelihood and impact of potential problems such as data loss, budget overruns, system downtime, and staff training concerns. 

Compare these risks against your risk tolerance and put in a risk management framework to mitigate, avoid, transfer, or accept these risks before you begin modernizing legacy applications. 

2. Technical debt

Technical debt refers to the long-term costs of short-term solutions. It’s essential to grasp this concept when deciding which modernization strategy to choose. 

Consider that replatforming a monolithic application may seem optimal in the short run. However, if the system is plagued by inefficient algorithms and outdated code, it may not be the best long-term solution for maximizing ROI. 

Assess the state of your legacy systems. Then use this information to identify whether a band-aid solution is really the right way forward. 

3. Security and compliance

Make security and compliance a priority throughout the modernization process. The average cost of a data breach has hit $4.88 million in 2024. Furthermore, an alarming 66% of consumers would not trust a company following security breaches. It’s imperative to get this part right. 

If you’re rehosting or replatforming, ensure your data is properly protected during the data migration process. And if you’re starting from scratch, implement security measures by design that protect you now and in the future. You should also keep up to date with compliance requirements for your industry.

4. Change management

Change is always daunting. From stakeholders and managers right down to your frontline employees and customers, an effective transition starts with clear, effective communication. 

For your staff, be prepared to provide comprehensive training to familiarize them with new systems. Do this proactively to prevent resistance to change when your new solution arrives. You can also explain the benefits of modernizing systems to encourage buy-in. It’s also important to be transparent with your customers to keep them on the side through minor service disruptions. 

Future-proofing your modernized systems

The easiest way to reduce technical debt over the long term is to plan ahead for further advancements. This will maximize the long-term value of your modernization initiative. 

• Cloud migration: Migrating to a cloud provider offers better scalability, flexibility, and cost-efficiency. It makes it easier to pivot and adapt as your needs and goals shift. 

• Emerging technologies: Embrace new technologies as you modernize. Developments like machine learning and AI can support predictive analytics and automation, freeing up time for teams to work on other high-value tasks. 

• Continuous improvement: Consistently track application performance to ensure the longevity of your modernized systems. Adopt a mindset of continuous improvement. 

Modernization without future-proofing is a wasted opportunity. Put the building blocks in place so you can collect data, monitor core metrics, and evolve more readily in the future.

Summing up

Legacy modernization is a requirement for digital transformation. Without committing to upgrading outdated technologies, it’s challenging to get the best out of modern systems. You can’t step into the future while keeping a firm grip on the past. 

Take the time to evaluate your own legacy systems, set clear business objectives, and assess the value of each modernization strategy. Each of these steps will allow you to chart your own pathway based on your changing business needs. 

The RecordPoint approach

Ready to make legacy application modernization a priority this year? The RecordPoint’s platform can migrate all your unstructured and structured data into one central data catalog. 

This data migration process provides total visibility over all of your information data, no matter where it lies, making it easier to retire your legacy systems without risking the loss of critical business information. 

Once you’ve migrated your data, use the platform's comprehensive data lifecycle management capabilities, which provide end-to-end data governance to ensure your sensitive information is handled, stored, and disposed of in line with your regulatory obligations.

If you’re looking to modernize your outdated systems but are worried about the challenges and risks of disrupting your operation, we can bridge that gap. Say goodbye to your legacy apps without worrying about the what-ifs. Book a demo today to learn more. 

FAQs

What are the signs that my legacy system needs modernization?

Analyze your existing system and evaluate structure, performance, maintenance costs, flexibility, and security challenges. In general, if your system is slowing you down, introducing risks, or making it harder to scale, it’s the right time to modernize. 

How long does legacy system modernization take?

This depends entirely on the modernization methods you choose. Rehosting and replatforming can take anywhere from a week to a few months, whereas rebuilding can take several years. That’s why it’s a good idea to adopt a phased approach for large-scale projects. 

How can I minimize downtime during modernization? 

The more you plan ahead, the smoother the transition. Use a phased implementation, opt to parallel run old and new systems, or use cloud-based modernization solutions to support data migration and minimize disruptions. 

How can I justify the cost of legacy system modernization to my organization? 

It may cost a lot of money to modernize legacy systems, but how much is it costing not to update that legacy system? Determine the operational costs and technical debt your business has accrued over time due to outdated solutions. This is the easiest way to demonstrate the financial value of modernization.

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