Imagine you're a CIO of a large banking corporation. Your company has been relying on an old mainframe system that was cutting-edge in the 1980s but is now woefully outdated. The system is difficult to maintain and modify, and it requires specialized knowledge that's becoming increasingly rare.
Your IT team struggles to integrate this system with new software, and it's slowing down your company's ability to roll out new features and services. You know the need for digital transformation, but replacing such a deeply embedded system is daunting. The risk of disruption to your daily operations makes it seem like you're stuck between a rock and a hard place.
Outdated legacy systems prevent businesses from leveraging digital technologies for innovation and IT efficiency.
Today's business landscape is characterized by rapid change. Businesses need to adapt to changes in market demands, create new products, modernize their services, and optimize customer experiences to thrive in the rapidly evolving ecosystem.
While most organizations agree that staying up-to-date with modern business requirements is essential, many struggle because they're stuck with outdated legacy software.
Legacy system modernization covers a wide range of activities and strategies. It also involves a lot of time, financial resources, and effort. Consequently, it may sound intimidating for most people. Yet, it's necessary for businesses serious about keeping up with changing market dynamics and consumer needs.
Let’s explore everything you need to know about legacy modernization as a business leader, manager, or IT professional. We consider the benefits of legacy modernization, the challenges you're likely to face, and the best practices for overcoming those challenges.
Understanding legacy systems
Legacy applications or systems refer to core business software solutions developed long ago and have become outdated or need an upgrade. While a legacy system could still be in use and fully functional, it may not be compatible with new technologies, making it challenging to maintain.
A legacy system can be an old operating system (such as Windows XP or Windows 7 instead of a newer version like Windows 11), older enterprise software like the SAP R/3 ERP software, or a legacy accounting tool like Quickbooks. Custom software built with older programming languages like COBOL and FORTRAN are also considered legacy applications.
It is worth noting that legacy systems aren't necessarily old. Sometimes, a relatively young system can still be considered outdated when it does not meet the company's needs or can no longer keep up with the latest business-related changes. A system may also be outdated if it lacks modern functionalities such as AI algorithms, data analytics, and other features in modern alternatives.
While they might be old and cumbersome, legacy applications still power core business processes in many organizations. They are typically mission-critical systems used for day-to-day business processes, such as order processing, customer relationship management, and financial reporting. Legacy applications also store valuable historical data and business knowledge that are still useful for decision-making.
The challenges with legacy systems
The "if it works, don't touch it" assertion isn't always applicable to businesses. According to a Forrester survey, 76 percent of organizations are currently engaged in a legacy modernization project. Although legacy systems are often functional, they have many challenges that necessitate modernization. The problems with legacy systems range from being insecure to being largely inefficient.
Some of the common challenges of using legacy systems include:
Security
Legacy systems are vulnerable to cyber-attacks because they often lack newer and more advanced security features like encryption protocols and firewalls. For third-party legacy systems, vendors often stop supporting outdated systems. Without upgrades and updates, these old systems become susceptible to the latest malware iterations, putting your entire business at risk.
Expensive maintenance
Legacy systems drive significant costs, and keeping them functional can be expensive. They are often built with difficult-to-understand code, making it challenging to change them. Add that to the fact that these old technologies are no longer widely used, which means there are only a few people with the expertise to maintain these systems.
Inefficiency
Legacy systems can be slow and inefficient. Workers must grapple with long load times, lags, and cluttered interfaces. Older software may also slow down over time due to incompatibility with newer devices. These inefficiencies directly affect employee productivity and performance.
Incompatibility
Every business aims to establish a unified work ecosystem that seamlessly integrates all the apps and systems used across the organization. But this can be difficult to achieve when there is a lack of compatibility between older and newer technologies.
Newer software is usually built with programming or connectivity protocols that do not integrate well with older systems. That means businesses that already have legacy systems in place will have to maintain disparate systems, leading to challenges such as a lack of interoperability and isolated data silos.
Compliance
Organizations often have to adhere to various regulations governing software or digital tools. For instance, the General Data Protection Regulation (GDPR) stipulates how companies should handle data privacy on their digital platforms within the European Union and the European Economic Area. These rules are updated regularly, and new software is designed with this in mind. Companies that use outdated systems will have difficulty keeping up with these compliance regulations.
The need for legacy system modernization
Legacy system modernization involves updating an old application to leverage new technologies or modern architectures.
There are different approaches to legacy system modernization. It can include refactoring the app code, replacing outdated components, or adding new features. Since an organization's internal processes are tied to its current systems, an inefficient, outdated system can lead to inefficiencies in internal processes due to its many limitations.
While modernizing legacy apps might seem costly and time-consuming, the result is often a reduction in operational costs and a general improvement in performance. Modernization also yields positive results like improving user experience, enterprise security, and long-term scalability.
Best practices for modernizing legacy systems
Modernizing legacy systems isn't a one-step process. It involves multiple steps and strategies, and the right approach depends on the current status of your tech stack and the end goal you hope to achieve with modernization.
Here are some of the most common strategies for modernizing legacy systems:
Redevelopment
Software redevelopment involves rewriting your application's code from scratch. It is ideal for custom software built in-house with a redundant programming language or outdated architecture. Redevelopment is the most comprehensive approach to legacy software modernization because it allows you to configure the new app based on your needs. However, this approach can be resource-intensive and may not work for some types of applications.
Refactoring
Refactoring involves making changes to the codebase of your app to keep it up to date and enhance performance. It may include improving the code readability, removing redundant code, or editing the code base to meet the latest programming standards. Refactoring is a quicker and cheaper alternative to redevelopment, especially with an automated refactoring tool. It reduces the app's complexity, improves performance, and makes it easier to maintain code in the future.
Re-architecting
Re-architecting involves changing the structure of the software to align it with the current business needs. It may include redesigning the software architecture, changing the interface, or migrating your software to a more modern environment. Rearchitecting creates a more efficient app that meets your business needs or process requirements.
Migrating to cloud
Migrating your software to the cloud is one of the most efficient ways to modernize it. Cloud apps offer numerous benefits over on-premise alternatives. They're more scalable, easier to maintain, and provide better access since you can access them from any device. They are also easier to integrate with other digital apps.
Integration
You can modernize your legacy application by integrating it with modern web services, databases, and other third-party software. Integration makes apps more agile and responsive while providing access to more advanced functionalities and improving performance.
How to effectively implement these strategies
Legacy app modernization isn't something you start doing by accident. You have to choose the right approach intentionally, which involves thoroughly assessing your current status and plans.
First, evaluate your current system to determine what's working and what isn't to identify areas that need to be updated or replaced. You may also need to analyze the market to see the current trend in the tech landscape and how it compares to yours.
The best approach to follow depends on the current structure of your business and the resources you have at your disposal. For instance, overhauling your legacy system may be too costly, especially when it powers your core day-to-day processes. Modernizing the system gradually might make more sense in such situations instead of attempting to change everything at once.
The top legacy modernization strategies
In executing a legacy modernization project, you can take a revolutionary or evolutionary approach. The details of each of these approaches to legacy modernization are highlighted below:
Revolutionary modernization
As the name suggests, revolutionary modernization involves replacing an entire old system with a new and more modern one. It is the most radical approach to modernization and is often more expensive and risky. However, revolutionary modernization is often the preferred choice when you need to modernize your system as quickly as possible.
For instance, in the case of mergers and acquisitions, where one business has to quickly adapt its system to integrate seamlessly with the other company, a complete overhaul of its legacy system is necessary.
A radical overhaul may also be necessary in situations where keeping the legacy system has become too expensive or risky. For instance, an old system no longer supported by its vendor can leave organizations with high-security risks that must be fixed quickly.
A complete overhaul provides a significant (and instant) improvement in performance and functionality. It also eliminates the need for ongoing maintenance and support for the legacy system, freeing up IT staff for more strategic projects. However, a revolutionary approach to modernization can be expensive and disruptive. It is also often difficult to revert to a legacy system if the new system you're trying to implement fails.
Evolutionary modernization
Evolutionary modernization involves modernizing your legacy system gradually over time instead of replacing it all at once. The approach may involve gradually improving the underlying infrastructure of your app, adding new and better capabilities, or integrating it with third-party systems.
Risk-averse organizations that cannot afford a radical change due to the technical costs and likely impact on their business processes opt for evolutionary modernization.
Even when the end goal is a top-to-bottom overhaul of the existing system, evolutionary modernization takes a multi-phased approach that breaks the whole process into smaller, easy-to-manage steps.
It takes more time but is less costly and easier to manage since it spreads the total cost of modernization over a long period. It's also less disruptive and less risky compared to the revolutionary approach. Since the changes are incremental, there's a lower risk of failure. If failures do occur, they can be corrected relatively easily.
The main downside to this approach is that it may not provide the same level of performance improvement as revolutionary modernization. In most cases, you also have to continue maintaining the legacy system while implementing the new system, which adds to the cost in the long run.
Case study of successful legacy modernization
For over a century, Olympus ES has been one of the major players in the medical, life sciences, and equipment industries. The company has more than 35,000 employees spread across 40 countries worldwide.
It was leveraging a legacy workflow automation tool to manage the numerous complex workflows and processes used in day-to-day operations, but it was lacking in many areas.
The interface was old and difficult to use, requiring skilled IT professionals for the slightest change. Integrating the legacy system with external spreadsheets was also challenging, and employees handled most processes with emails.
Olympus wanted more modern software to support the company's vision and reduce the burden on IT. While the company tried a few modern alternatives like Lotus Notes, they were still not intuitive enough for non-technical users.
Olympus eventually opted for Kissflow, a simple low-code/no-code platform that allows business users and technical users to create and monitor automated processes with minimal to no coding. The company gradually transitioned its operations from the legacy system to Kissflow, starting with purchasing processes, RMAs, demo requests, and discount offers.
Many past processes that took ages to complete using the legacy systems became faster, better organized, and easier to manage with Kissflow. Consequently, legacy modernization with Kissflow allowed the company to improve efficiency while spending less on IT.
Overcoming the challenges of legacy modernization
Modernizing legacy systems can be a complex and challenging undertaking. Whether it's a complete overhaul or a gradual evolutionary approach, there are a wide range of potential pitfalls and obstacles you're likely to encounter. The most common challenges of legacy modernization are complexity, cost, and disruption to business operations.
Complex and costly process
Executing a top-to-bottom modernization of your existing system requires significant costs, time, and expertise. The average cost of a legacy modernization project is about $1.5 million. It includes costs for infrastructure, data migration, and hiring skilled professionals to handle the modernization efforts. However, the cost is often worth it when you consider the high maintenance costs and possible risks of running an outdated system.
Risk of disruption to business operations
Modernizing legacy systems involves making changes to core business processes and procedures. However, the modernization process can impact day-to-day business operations, especially when it follows a revolutionary approach. Employees may also take a while to get used to the changes that come with adopting a new system.
To reduce the risk of such disruptions, you should develop a comprehensive project plan that outlines the clearest path to modernization with minimal disruption. Careful selection of the new technology you're adopting and working with professionals will reduce the risk of disruption and ensure the project is completed successfully.
Difficulty in finding and retaining skilled legacy developes
Finding and retaining developers with the skills and experience needed to upgrade and migrate legacy systems can be challenging. It can make legacy modernization more difficult and costly.
In most cases, it is more effective to invest in training programs aimed at upskilling and reskilling existing employees to handle the migration from old to new systems. It also helps when your new system is intuitive and easy for everyone to use regardless of their technical skill or knowledge. It reduces the burden on traditional IT and the need for external hiring.
The future of legacy systems and modernization
The global legacy app modernization market is expected to reach $36.8 billion by 2027. This stat shows that the legacy modernization market will stay relevant and grow significantly as more organizations recognize the need to modernize their systems. Some of the future trends we can expect in the industry include:
Growing adoption of cloud computing and SaaS solutions
In recent years, there has been a growing adoption of SaaS solutions to power business operations in place of on-premise legacy systems. These cloud-based services offer several benefits, including agility, scalability, and cost savings. By leveraging cloud platforms, organizations can quickly scale up or migrate from their legacy systems in response to changing demands while controlling costs.
Increasing focus on security and compliance
Security and compliance are among the main factors that motivate legacy software modernization. Cyberattacks have gotten more sophisticated in recent years. There has also been closer scrutiny and regulations on data privacy and security.
Consequently, businesses will likely look to modernize their systems to ensure compliance with these regulations. Modernization projects will also pay close attention to security upgrades such as firewalls, intrusion detection systems, data encryption, and access controls.
The emergence of low-code and AI-powered tools to simplify legacy modernization
Low-code and AI are the biggest trends in modern software development. These technologies simplify the creation of new software systems and make it easier for businesses to modernize their legacy systems. AI can also be integrated with legacy systems to automate and optimize critical processes without significantly changing the system infrastructure.
Conclusion
Kissflow is a low-code app development platform that can simplify legacy modernization.
It offers a visual editor and reusable templates that are simple and intuitive. You can transform legacy processes into streamlined workflows without complex coding.
The platform allows you to build scalable, cloud-based apps. You can gradually add more functionalities as you migrate your legacy system to a modern one. You can also leverage custom and complex integrations to improve existing business logic, building off your current systems in a controlled and efficient manner.
Sign up to learn how Kissflow can modernize your legacy system and eliminate the chaos.
