Step-by-Step On Legacy System Modernization

Here at Savvycom, we notice there are numerous disadvantages to legacy systems. They are challenging to support, upgrade, or integrate with new systems. If we’re talking about making and mataining large-scale app, their maintenance costs can run into millions of dollars annually. However, replacing an old system is complex, particularly regarding critical business processes within an organization. Legacy system modernization addresses this issue by providing several options that will not disrupt your internal operations.

This guide examines six common legacy system modernization strategies and outlines the steps to take before beginning the modernization.

1. What Is Legacy System Modernization?

When we think of legacy systems, we usually think of corporate IT apps from the 1990s or early 2000s. Most likely written in COBOL or Fortran, with an out-of-date user interface. However, neither age nor programming language determines whether a system is outdated. The term ‘legacy’ refers to any software, technology, or system that slows or blocks organizational processes, making it more challenging to adapt to changing market dynamics.

According to this definition, legacy system modernization entails partially or completely updating and replacing an outdated or inefficient system, processes, and applications.

For example:

• Assume you work for an insurance company and are running an old ASP.NET application. 
• The app’s purpose is to manage car insurance claims. 
• Adjusters must take pictures with their digital cameras and load them onto their PCs from SD cards. The images should then be manually uploaded to the site.

The term “legacy system modernization” refers to the process by which an organization’s aging systems are brought up to date and optimized to improve operational efficiencies, address technological limitations, provide a better user experience, and allow for the adoption and integration of other systems built on more recent platforms.

It works if you only have a few cases per day. What if there are hundreds of them? You could start by providing employees with a mobile app, so they don’t have to lug their laptops around. They begin taking photographs, which the system automatically uploads to Google Photos or the cloud. You can also use web app development services to get a flexible, scalable, and mobile-friendly solution.

2. Why Do You Need System Modernization?

Every organization will undoubtedly require software modernization at some point. It does not mean that you must modernize the entire system, but you will almost certainly need some update to remain efficient, respond to market changes, and increase ROI. Let us now look at the reasons for considering legacy software modernization.

2.1. Maintenance and Support

In most cases, the costs of maintaining aging infrastructure outweigh modernization costs. The following are the costs of legacy system maintenance operations:

a/ Updates and changes

A large codebase typically supports legacy systems with numerous intricate functionalities. Because they are monolithic, changing or updating one system module is impossible without affecting other app components. As a result, any required modifications take a significant amount of time and effort, and none of them are inexpensive.

b/ Infrastructure

In comparison to software modernization, legacy system infrastructure maintenance costs remain high. Old data is related to another significant infrastructure issue. It isn’t easy to restructure for increased storage space optimization because it is dispersed across several databases and storage resources. Collecting and organizing historical data to migrate to a new database is time-consuming and resource-intensive.

c/ Staff training

Legacy system maintenance necessitates specific knowledge and expertise due to obsolete technology. While the programmers who created the application may switch to other technologies, finding the required expertise is becoming increasingly difficult. As a result, you should consider employee training, which may require a small portion of your budget.

2.2. Security

Legacy systems are vulnerable to cyber attacks, malware, and harmful programs. If you’d relied on a software solution for years, hackers would have had plenty of time to learn your code and identify flaws. According to a study, 60% of small businesses fail within six months due to cyberattacks. The average cost of a cyber attack on a small business is $25,612, including monetary loss and brand reputation.

Even if your solution is custom-made and you have the resources to support it, adding new fixes necessitates additional security funding. While IT security will always be a concern, many vulnerabilities can be addressed by upgrading outdated software and enterprise security protocols.

2.3. Integration and Compliance

Third-party APIs are used by modern enterprise software to add business value. Third-party services (and their APIs) can be used to track transactions, plan routes, share data, confirm users, and so on. Legacy systems, unlike modern software solutions, lack integration capabilities and necessitate a significant amount of customization and coding time to connect to third-party software.

Compliance is another reason to consider legacy software modernization, which is especially important in heavily regulated industries like healthcare, politics, and finance. For example, the General Data Protection Regulation (GDPR) has been in effect for several years, but many businesses still struggle to comply with it.

2.4. Lost Business Opportunities

Scaling or improving your IT infrastructure will always incur costs whether you invest in a new cloud-based solution to drive business growth or in the upkeep of your current legacy system to keep it running. On the other hand, investing in obsolete technologies leaves less room for innovation. You cling to outdated software, ignoring new opportunities in favor of capitalizing on new technologies and business models.

This places you in the background, giving your competitors more opportunities to outwit you. Investing in software modernization will enable you to move forward with novel digital products designed for improved client experience, improved backend maintenance, and shorter deployment times.

2.5. Organizational Agility and Efficiency

Most businesses that rely on legacy systems lack the organizational agility to meet market demands. Meanwhile, agility is at the heart of software modernization. Agile methodologies, such as Scrum, Kanban, and Lean Development, accelerate IT service delivery due to their iterative nature and lack of paperwork and control. Even though legacy system modernization is a complex process, aligning with modern IT demands is critical. Furthermore, outdated software is inefficient, resulting in lower employee productivity.

3. So, When Will You Need Legacy System Modernization?

When is it appropriate to modernize legacy systems? Unfortunately, there is no standard answer because it depends on various factors. First, you must gain a complete and fundamental understanding of your current systems, assess your business performance, and determine whether your existing technologies are sufficient to address your long-term goals.

To help you, we’ve compiled a list of five questions to ask before modernizing legacy systems:

• Can your existing systems accept and process data from internal software and partner systems in various formats?
• Do you need to modify integrations to connect to new applications?
• Are you able to deal with increased data volumes from new applications quickly?
• Can your current IT systems detect and correct data processing errors?
• Is it more expensive to maintain outdated infrastructure than to modernize it?

If none of the answers above satisfy you, it’s time to consider legacy software modernization.

4. Modernization of Legacy Systems: Step-by-Step

Modernization does not always necessitate a comprehensive overhaul of your IT infrastructure. However, it does necessitate an honest evaluation of where digital change is required.

Before we get into legacy software modernization options, let’s examine what research and preparation you’ll need to conduct to prepare.

4.1. Establish Your Software Modernization Objectives

Simply switching your COBOL/CICS environment to Java will not solve all of your problems. It is preferable to link modernization initiatives to your business and technology goals, such as scalability, additional features, and faster time-to-market.

Modernizing billing software and connecting it with a new e-commerce system, for example, could increase customer happiness while decreasing service costs. This is because fewer customers need to contact the company regarding billing issues.

Depending on your business, market, and goals, you can determine how legacy system modernization could affect revenue, market share, customer experience, and other factors.

4.2. Recognize the System’s Current State

The next step is to assess how well your present system is doing. This will assist you in developing an initial roadmap for modernization and prioritizing the apps that need to be updated.

Begin by inquiring about the infrastructure of your system:

• How are resources allocated?
• What are the chronic resource issues?

Performance:

• How is the software now functioning?
• How does it usually perform?
• Is the system generating any errors?
• Which ones are they?
• What is the end-user experience like?

And how it will affect your business:

• What effect does the system’s performance have on your revenue?
• How much time do employees spend using the app?
• What effect does the app have on conversion rates or order value?
• Do errors or downtime affect customer service costs?

You and your team can decide on a system modernization approach once you have a complete picture of your system’s performance, UI, infrastructure issues, and codebase.

4.3. Decide on a Modernization Strategy

It’s time to put all of your data to use and decide on a modernization strategy. Of course, if you’re working with a software development firm, they’ll evaluate your system and recommend the optimal strategy. Still, it’s a good idea to familiarize yourself with all your possibilities. These are six methods for modernizing outdated systems. However, only three rehosting, re-platforming, and refactoring involve modernization.

5. Software Modernization Strategies

Although rewriting or replacing may be the first thoughts that come to mind, legacy software modernization should be done on a case-by-case basis. As a result, when planning modernization, it is critical to examine all system nuances upfront.

The analysis must include:

• Existing IT architecture
• Technology
• Functionality
• Risks
• Complexity
• Cost

The final strategy for software modernization will be determined by the challenges you wish to address and business/performance objectives.

5.1. Encapsulating

Encapsulating software entails using and growing application features by enclosing their data and functions and making them available as a service through an API and encapsulating a system with third-party APIs limits system access to match the data and workflow of current systems engaging with it. You could, for example, integrate the system via an API into a general UX platform so that its information is shown in a format that consumers can easily interpret to deliver optimal UX.

Encapsulation can alleviate the short-term pain of bad UX and make a legacy system behave like a new one. The issue is that it does not solve the major problem with a legacy system: maintenance overhead.

5.2. Rehosting

Replacing entails switching to another package solution that meets your company’s needs. It is sometimes more advantageous to switch to a different system than to upgrade the current one. You cannot utilize the present business logic when replacing, but some level of re-engineering, customization, and rewriting business logic may be required.

Still, modifying a product can be tricky and dangerous. It, like rewriting, should be considered only when sustaining an existing legacy system becomes problematic owing to staff or hardware constraints.

5.3. Replacing

This abbreviation means migrating the system to a new physical, virtual, or cloud infrastructure with no changes to the code, features, or functions. It may make sense, for example, to migrate an outdated system to a cloud or SQL-based environment.

Moving to the cloud makes the system more adaptable than on-premise hardware and increases data security, reliability, and continual updates. Moving to SQL-based x86 architecture systems results in cheaper purchase costs and less stringent cooling and space requirements.

The rehosting technique is less expensive and risky than re-engineering (which might take years to complete). However, the business logic is preserved; thus the system continues to function as before.

5.4. Replatforming

Developers leave the software virtually unchanged, retaining functionality while adapting to a new platform. The purpose here is not to rewrite apps; we have the rebuilding technique. Instead, systems are modified so that they may run in target contexts such as cloud-based ones.

Developers convert an existing system component to a managed service (such as a database service) with no changes to the business logic. It could, for example, mean a shift away from commercial databases and toward horizontally scaled open-source data repositories and services.

5.5. Refactoring

Optimize existing backend code without affecting front-end behavior or functionality. Refactoring is used to solve technical issues and improve the features and structure of a component. Companies can maximize cloud cost efficiency by re-coding specific sections of their current system to use cloud-native features fully.

5.6. Re-Architecting

Re-architecting means completely rewriting the app’s code to migrate it to a different architecture. You can completely use the new and improved features of the existing platform by modifying the code. For example, you can transition from old monolithic architecture to new microservices architecture.

This could be a decent idea, given IDC IT predicts that by 2022, 90% of all new apps would use microservices designs. Microservices, they argue, will improve the capacity to develop, debug, update, and leverage third-party code.

5.7. Rewriting (Rebuilding, Redesign)

Rewriting entails creating a new system from scratch that performs similar duties. It could be an excellent alternative if your clients require more than what your present system can give. When the expenses of maintaining an old system exceed the price of rebuilding it, this system modernization option makes the most sense.

For example, your team may recreate the functionality of a monolithic app as a cloud-native microservice operating in a cloud-native environment. While these methodologies differ, they all have one thing in common: they all necessitate a detailed examination of your interconnected components, systems, and applications. This is because you cannot update one legacy system component while disregarding the others.

6. The Challenges Of Legacy System Modernization

Modernizing legacy systems is a complicated process in which new complexity emerges regularly. As a result, when you decide to upgrade your software, you should consider these factors.

• Risk Management: Before modernizing your old system, assessing all financial, security, and operational concerns is critical. However, in other circumstances, defining the criteria for making choices and reaching an agreement among stakeholders may be difficult.
• Restrictions on Data Management: Access to existing data is essential for successful legacy system transformation. To avoid inefficient and worthless information entering a modernized system, you must clean up the data and enhance the administration rules.
• Resistance to Business Transformation: Modernization of legacy software extends beyond IT, improving business processes and efficiency. However, if the organization rejects the changes, rebuilding operations, and retraining staff may impact overall productivity and team morale.