Contact us anytime to know more — Abhishek P., Founder & CFO CISIN
The digital world is moving so fast that it takes businesses little time to get familiarized with their current operating system before they are outdated.
Organizations are realizing the need to upgrade legacy systems to allow them to expand, be more agile in their business, and maintain a competitive advantage through digital transformation.
Modernizing legacy systems requires that businesses upgrade or replace their current software, architecture or applications.
This prevents them from achieving their goals and puts them behind on a path to achieving a competitive advantage. This blog will explore some key questions surrounding legacy software modernization.
What Is A Legacy System?
Legacy systems refer to older software and hardware, including programming languages and operating systems, that are no longer functional due to new technologies that companies still use.
When first released, a legacy application was the latest and greatest. It served its original purpose. The functionality of legacy applications is rapidly becoming inadequate due to the rapid changes in technology and the business environment.
Many organizations still cling to legacy systems for a variety of reasons:
- There are some projects and contracts that require original hardware or software.
- It isn't easy to retire a legacy system all at once.
- Key decision-makers resist change.
- The cost of investing in new computers and modernizing applications is high, and it comes with new costs, which are against the core logic of many businesses.
- Many organizations struggle to deal with the time and effort required to install and train on a new system.
- It may be hard to convert or migrate existing data from an older system to a modern operating system.
Legacy System Modernization (LSM)
The term legacy systems are used to describe old, outdated software, applications, manual processes or other infrastructure that are critical for day-to-day operations.
You can't just declare them obsolete because they are old. They are deemed obsolete when they can no longer be used for business or work well with changing needs in an ever-changing world.
In addition, maintaining, improving, and integrating legacy systems with newer systems requires a large budget. Modernization is, therefore, a must.
Modernization is necessary to maintain the legacy. They can develop critical problems at any time. These legacy systems are necessary because they meet all the original requirements.
These systems may be based on outdated technologies which are not commonly used.
In order to increase operational efficiency and satisfy customer expectations, the legacy modernization process entails updating and optimizing your current business systems.
Modernizing legacy systems means upgrading your digital platform to include newer, better, and more modern digital solutions. The legacy transformation can be compared to an application upgrade. The platform combines the strengths of older business applications and updated modern technologies to align well with business goals.
You can modernize your legacy in many different ways, guided by the priorities and strategic goals of your business.
Legacy Application Modernization (LAM)
We will begin by defining a legacy system and then identifying one. A legacy system is an older software or technology that hinders an organization from expanding, growing, or keeping up with changing market needs.
A legacy system cannot support an organization's needs. How to identify an existing legacy system:
- The vendors no longer support it.
- The security update is not available.
- The software is not compatible with the latest versions of modern software.
- There are always ways to work around the entire process.
- It will take a while to finish loading, or you can run it.
- Maintenance costs are extremely high.
A legacy system may be outdated or old, but it's not necessarily obsolete. Legacy systems can be essential for many companies and still produce acceptable results.
The best tools are used to keep their legacy systems running. The global market for application modernization is expected to grow by 2027 and reach $36.86 Billion. This is due to the growing demand for these legacy modernization tools, which is driven by the need for digital transformation.
Businesses should update legacy systems with modern programming languages and protocols when they reach a certain level of maturity.
It is important to recognize the value of modernizing legacy applications since this will help boost an IT organization's digital transformation initiatives. Now let's move on to understanding the legacy software modernization strategy that is vital for the success of any business.
The Pitfalls Of Legacy Systems
Businesses will eventually have to accept that legacy systems will no longer be supported. This means there isn't a simple solution in case of system failure.
Although many businesses may think migration is too difficult, the real issues will outweigh any perceived key benefits of using a legacy system.
Cost-Prohibitive
Maintenance is required for any technology infrastructure, but the costs of updating outdated hardware and software are high.
The maintenance of legacy software is more expensive and specialized than that of modern cloud applications.
Vendor support may decrease as software and hardware become outdated. They might also charge a premium to support systems not part of their core business.
It is also more difficult to reconfigure and recreate legacy systems, which often requires expensive specialized IT knowledge.
Security Breaches
Another important reason for thinking about modernizing legacy systems is security vulnerabilities. Cyber attacks are a major problem for companies, but old digital technologies make them even more vulnerable.
When releasing updates and upgrades, vendors give priority to their newest technology systems. When businesses use outdated technology, their security systems are always behind.
A legacy system also increases the risk of losing data without automatic backups, which come with modern software and a new platform.
Inefficiency
Slowness is one of the biggest frustrations with legacy systems. Software systems that are legacy can often be slow to load and have lagged.
Over time, software applications become slower, and since vendors no longer release updates, it is impossible to fix the problems. Outdated IT systems can interfere with the business process and reduce productivity.
Compliance
Globally, organizations must comply with all the laws and regulations set forth by their respective countries. The General Data Protection Regulation, for example, is a regulation that governs data privacy within the European Union.
It sets out strict guidelines on what businesses can do with the data collected. Businesses that use outdated technologies and legacy software will have a harder time staying compliant because they cannot accommodate the newer regulations.
Data Silos
In a legacy system, there are data silos, which means that the information is contained within specific systems.
Some organizations, business units or departments may have separate operations in the day-to-day. They have different goals and collect data in their departments accordingly. Software often does not integrate well with legacy systems, making it difficult to share data.
Insufficiency Of Scaling
One of the key aspects of success today is being able to maintain and improve performance. With a legacy business system, it is nearly impossible to scale and grow your digital transformation company.
Data capture can be a serious issue. As organizations grow, they are constantly flooded with massive amounts of data. A company must have a system that can scale to the amount of data it is processing.
Mobility Problems
In the new world of hybrid work, remote collaboration and communication are now part of everyday life. To take advantage of the hybrid benefits, employees need the ability to work from anywhere and access the entire system.
Older legacy systems do not always support remote access, which can negatively impact your business' productivity.
Modernization Of Legacy Systems
It's obvious that a system needs to be updated with newer hardware, software and systems, but replacing an old system is not the best solution.
In a Research survey, it was revealed that 72% of the budgets of 3700 companies were allocated to maintenance and patches for their legacy systems.
Ideally, companies should carefully examine their existing infrastructure and develop a plan for the future of that system.
They could also consider replacing the entire infrastructure of their IT systems with new ones. Legacy software cannot keep pace with the digital age. As businesses realize the importance of having the best technology tools, they are proactively implementing a new software system.
Legacy Systems: How To Work With Them?
Business requirements will determine whether or not to replace an old application. A legacy system might not need to be changed in many cases.
If the system is still able to support the processes of the company, it may not be a legacy.
It is possible for an older legacy application to still be efficient and secure and provide the functionality that your business requires.
It may be easier to integrate new technology into an existing system than build a new one in cases such as these rather than replacing the infrastructure.
Replace A Legacy Computer System
Many legacy systems, which were designed for specific, immediate uses, may eventually reach the point where they are no longer meeting business requirements or strategic objectives of a business and must be replaced or upgraded.
Upgrades and replacements can quickly pay for themselves in revenue, flexibility, efficiency, growth, etc.
Read More: Top 10 E-commerce Business Growth Trends to Watch
The Top Legacy System Strategies For Your Business Success
The digital transformation of an organization is about the effort to improve productivity, be more innovative, and encourage growth.
As a part of digital transformation, a legacy application modernization strategy is located in the triangle's technology branch of the people-process-technology axis.
It can be challenging to put legacy system modernization techniques into practice because it is challenging to apply them, especially when dealing with older programmes and their monolithic design.
It isn't easy to upgrade a single component because the data, the network configurations and the security of the system are tightly linked. The first step is to evaluate your business's needs and choose the aspects that need updating. You can create a plan and execute it.
The strategies below are outlined for creating a modernization plan for an existing legacy system.
Set Your Software Modernization Goals
Java is not the answer to every problem. Connect your legacy software modernization initiative to the business and technology goals you have, such as scalability and additional features.
Updating billing software, for example, and integrating it with an e-commerce site could improve client satisfaction while reducing service costs. It is because fewer customers will need to contact the company about bill-related problems.
You can find out how the modernization of legacy systems might impact your company's revenues, market share and customer satisfaction, depending on what you do, where you are and your goals.
The Issues
Detecting bugs is another important strategy for modernizing legacy applications. If the system does not meet the current IT or organizational needs, it's important to dig deeper into the problem.
Discover the problems with your digital product that frustrate users. Select the most relevant stories. It's also important to understand what legacy software can do well. Knowing what works and does not work can help you choose the right legacy modernization strategies.
Assessment Modernization
To analyze legacy modernization, you need a systematic approach. This includes identifying needs, analyzing current status, evaluating modernization options, and creating and implementing a comprehensive modernization strategy.
The top four legacy application modernization options that should be taken into consideration are listed below.
Replatform
The legacy modernisation approach entails making only minor changes to the current system before migrating it to a new platform.
It does not alter the code structure or function of the current system. Still, it does allow you to move the application onto a cheaper platform. Re-engineering projects can take time. The replatforming approach, however, is quick and keeps the business logic intact.
When the business approach is most appropriate:
- Modernizing very few functions is not necessary.
- A few business processes need to be migrated to the cloud platform.
- The company is facing a severe financial management crisis.
Reface
The solution for legacy modernization involves scraping some data from the legacy system and then adding a graphic interface.
This solution helps to make old software appear new by adding new UI elements. This approach eliminates the need to purchase new advanced technologies, saving you money on licensing costs. This approach works best in situations where:
- The legacy application is closely associated with the management team.
- The IT development team is highly experienced in old digital technologies and knows how to improve them.
- The technology is still modern, even though the software may be old.
Rebuild
You can build an enterprise legacy system entirely from scratch. Consult your enterprise digital software company to determine if you want to rebuild an entire legacy system or just the core components of it.
This extreme approach offers the best returns and competitive advantage, despite its extreme nature. When:
- The current system cannot support the changes required by the market.
- The vendor has stopped supporting the technology.
- Licenses for the current technology are very costly.
Our experts created a powerful ERP system for the largest furniture retailer in the world. Our industry experts began by mapping the journey of the customer in order to better understand their challenges when they shop at the store.
The ERP system was designed using an agile methodology. We have been working hard to develop the ERP system, and the result is a digital transformation solution that has now been deployed.
Retail establishments now tout the solution as a key tool to calculate ROI.
Extended And Migrate
It is one of the most effective methods for updating legacy software. You can gradually upgrade your legacy software and add new applications and features on a milestone basis.
You can update legacy systems without having to replace them. This is one of the most risk-free ways to change the system. It involves moving one piece at a given time. Since only one component will be migrated, there is little business disruption and failure risk.
It is best used in the most appropriate situations:
- You can replace an entire system by replacing one component.
- If your business is based on a small number of components.
- You need to switch from a batch system to real-time.
- If you need to update an outdated database, an RDMS is the best solution.
All digital transformation initiatives in enterprises use these four solutions to modernize legacy applications.
Select The Architecture
The selected strategy will determine the best architecture, or approach to modernizing legacy systems, at three levels: application, database and platform/server.
The business will also be affected by these decisions, even though the enterprise architect makes them. To accelerate and maximize value, the architecture must accommodate automated technologies and manual processes.
Select The Team That Will Execute The Plan
It is important to select the best team for the effective modernization of legacy applications. Most legacy application modernization projects follow this personnel hierarchy.
C-Suite executives, including Chief Technology Officers (CTOs), Chief Security Officers (CSOs), and Chief Information Security Officers (CISOs), are leading the program.
The enterprise architecture team provides them with reports. The IT and business teams are both the main points of contact in their respective communities.
Enterprise architecture teams balance IT capabilities with business demands for products and services. To achieve the business objective, the team will also need to develop a specific plan for modernizing outdated applications.
Establish Success Metrics
The best way to measure the success of your modernization project is by choosing metrics based on the initial reasons for your application.
You will be able to modernize your legacy application more effectively if you have more data.
Modernize Your Business With Automation
Automation is necessary to modernize legacy software to maximize the value of the business. A fully automated migration that refactors the legacy code and data to modern platforms is more effective for legacy modernization.
It also allows organizations to implement digital transformation gradually without having any impact on their daily operations.
Additionally, businesses can move ahead with the legacy transformation at their own pace thanks to a fully automated digital migration.
Refactoring an old program, for example, can lead to "quick victories" through a reduction in risks and increased IT efficiency.
Start Monitoring
Modernizing legacy applications is not without its challenges. Towards the end of the project, your strategy should include monitoring and optimization.
When you are evaluating the available tools, keep in mind the following:
- Think about tracking the performance of your application to ensure that it meets corporate goals while staying within budget.
- When modernizing legacy applications, keep an eye out for both the performance of your system and the cost of cloud computing. Many companies use cloud services computing to reduce implementation costs. However, it must be done wisely to reap the major benefits.
How Much Do Legacy Systems Cost?
Some organizations may still be using old software or hardware. These technologies are still useful, but they come with many hidden costs.
They can harm productivity and profitability. Here are a few hidden costs associated with the legacy system:
Maintenance Costs
Over time, systems and applications can become more difficult to maintain. Over time, every change adds to the complexity.
Even simple updates can quickly become time- and money-consuming.
Support Costs
Vendor support is also reduced as systems age and become outdated. Suppose you are relying upon third-party providers of software.
In that case, it becomes more and more difficult to maintain the software if the payment service provider stops providing support.
Legacy Skill Set Costs
For the maintenance of an old system, you need a set of legacy skills. The talent pool will shrink once the retiring employees with those skills leave the company.
The market has moved on to newer technologies and systems, reducing the customer demand for legacy skills.
Agility Costs
The majority of legacy systems can be difficult to modify. What happens if you must introduce a new application or feature to your business? Projects are longer than expected and cost more.
You are constantly hitting roadblocks. It takes a long time to test new features because it's difficult to determine how everything will fit with your old system.
The integration costs tend to increase as well.
You must now have gained some insight into the reasons why modernizing legacy systems is necessary for businesses looking to develop enterprise apps.
The reasons for IT legacy modernization can easily be boiled down into three:
- Cost of business operations.
- Inability to maintain competitive advantage.
- Encountering challenges in digital transformation adoption.
Modernizing the system is also expensive and requires that enterprises spend substantial amounts of money. To get the best value for your money, you need to choose the right software modernization strategies.
How do you make a decision:
- You can do this by confirming that your legacy system has become outdated.
- Understanding the various legacy modernization methods.
Conclusion
It cannot be easy to migrate from an older system to one that is more modern, but it will bring great benefits to your business.
Modernizing legacy systems helps your business keep pace with new technologies. Contact us today at Cyber Infrastructure Inc. to find out if you need to update your old system.
