Legacy Application Modernization: 5 Best Techniques to Counter Market Forces

Changing market conditions around the globe forces companies to establish a modern and effective enterprise application environment. Be it digital transformation, social-media-analytics-cloud (SMAC), or productization, businesses IT systems must be flexible enough to respond to market forces in cost-effective ways. However, all legacy systems installed across an enterprise can’t support the accelerating pace of business change in today’s day and age. These legacy enterprise applications are built using decade-old technology, probably times when IBM mainframes were ruling the market. 

Every enterprise software development company today realizes the fact that it must transform its business systems with modern technology stack, otherwise fall behind the competition. Though the ability to modernize the existing IT infrastructure depends upon its organizational culture, technical expertise, change management skills, funding availability, etc.  

So, let’s discuss five best ways for legacy system modernization that you can apply in your business today for reshaping company operations and staying in the market competition: 

Five Approaches For Legacy System Modernization

1. The Total Transformation Approach 

The total transformation approach focuses on rebuilding the entire standard enterprise software systems from scratch using modern technologies. Besides this, the systems built using third-party packages or IT consulting services providers’ assistance can also be redesigned using the total transformation approach. 

For example, a healthcare solutions provider company can replace its traditional end-to-end claims processing system with a new claims solution. The reason for this change might be existing systems’ inability to support the current claims market needs, existing underlying technology going obsolete or irrelevant, and cropping of a new IT vision in the company. 

Benefits of total transformation Approach 

• This legacy application modernization techniques assist companies in building a competitive advantage over rivals. 
• Supports future IT planning by integrating modern technology stack and system architecture. 
• Provides Maximum flexibility during system design and architecture. 
• Operational measures, KPIs, and SLAs are well-defined under this approach. 
• Technology security loopholes in critical systems reduce significantly.

To get success with total transformation and minimize the risks associated with the entire system change, proper due diligence, change planning, stakeholder management, and quality control is required. Companies must understand that entire system functionality is at stake and any minor quality issues can impact the business operations. Still, this is the best option for a complete system overhaul. You can mark this a high-risk high reward strategy in your notebooks. 

2. The Gradual Replacement Approach 

Under this strategy, a component or part of an IT system is replaced with new technology and moved to the production environment as a separate module while the remaining systems work on the same old technology. Over time, the remaining enterprise application components are also modernized using this strategy for the entire system rebuilt. This strategy is typically complex to execute in-house. Taking the assistance of legacy application modernization services providers is recommended for procuring the best results. 

Situations When Using Applying This Strategy is Best 

• You are looking to replace just a part of the critical enterprise systems like ERP and CRM with a controlled release of the budget. 
• Only a few system components have operational issues. 
• Tight coupling b/w systems needs to be eliminated via enterprise service bus (ESB)
• You want existing systems to change from batch processing to real-time/online. 
• You want to replace legacy systems dumb terminals or cranky UI with an intuitive dashboard. 
• You are looking to reduce the licensing costs by switching to open-source platforms. 
• You want to replace flat files or outdated databases with a modern, leading database solution. 

Also Read: 7 Techniques for Successful Legacy System Modernization

This is a low-risk strategy that focused on touching one system element at a time for a redesign. It requires less budget, average planning, and subtle work attention. Management bandwidth consumption is also less and the results delivered are quick compared to total transformation. Some of the key risks include the development of disjoint systems not working in sync, poor integration, version control difficulty, and less control over the tech stack of individualized enterprise applications. 

3. The Duct Tape Approach 

Localized, small-scale changes in enterprise applications are addressed using new technology under this approach. The core application architecture and technology remain the same. A popular example could be the development of a new application to bridge the gap in the functionality of the main app. This approach is opted by most modern-day businesses looking to modernize their core applications. Why? Because small changes in critical systems often deliver bigger returns compared to entire system overhaul. 

ROI remains concrete, results are quick, and risk is less compared to the above two approaches. Though one major downfall is that too much patchwork can lead to bad application behavior and poor design. Cost-effectiveness and due diligence are less too which leads to throwaway work. 

Below is the situation when applying this legacy application modernization technique is recommended: 

• When your company plans to continue with legacy systems by fixing existing issues using new technologies, 
• When your focus is on addressing the current problems ASAP (as part of your KPI metrics).
• You believe stop-gap solutions are good enough to support your modernization efforts. 
• You’re facing new problems at mid-year for which a no-extra budget is available to build a new solution. 

4. The Existing Improvement Approach 

This approach targets modernization by improving the design of existing enterprise software solutions. IT consulting companies or managed services providers are typically seen in action with this method, delivering suggestions for minor design changes or code optimization to companies. For example, improving application code maintenance by consolidating common business rules across critical components and eliminating dead or redundant codes. Attending immediate burning issues is possible with this approach. 

Procurement of new technology or thinking of future technology solutions is not needed here. Existing legacy systems are trusted upon for supporting minor change. Though, the system lifespan is limited here with the unavailability of experienced resources in old technology. This opens floodgates for quality issues. 

The situation when applying this legacy modernization approach is recommended include: 

• Company leadership has a strong belief in legacy systems and wants to continue with it. 
• IT teams in your business are highly skilled in old technologies and found ways for improvement. 
• The technology foundation is modern (Java/J2EE) despite applications being old. 
• System design and architecture are modernized using the existing technology to remove bottlenecks. 

5. The No System Change Approach 

Companies that walk down this strategy path believe that they don’t need ant modernization efforts to drive a system change. For example, companies who have analyzed that ROI gains from modernization are not satisfactory refrain for a system redesign. The benefits of this approach are pretty clear: no need for additional investment in modernization and companies can use these funds for other strategic tasks. 

IT departments of such companies are also free to work upon addressing IT security vs compliance challenges. Since no specific technology decision is taken, companies are free to choose any new technology platform they find apt. Major risks of this approach include competitive disadvantage against market forces, fear of falling being competition, and loss of market share. 

Here are some scenarios when you should choose this particular legacy modernization technique: 

• The company has already modernized in the past, or you are using new systems. 
• You are evaluating various modernization approaches, scope, and roadmap. 
• Your company is focusing on absorbing the recent change in leadership or company structure. 
• Lack of satisfactory funds. 
• Your leadership believes they don’t need a technology upgrade right now. 

Doing Legacy Application Modernization The Modern Way 

Hope the above legacy transformation approaches have offered you clarity about their benefits, applicability, and demerits. Finding which approach works best for your business depends upon your organization’s culture, requirements, risk appetite, existing IT infrastructure, and competitive landscape - there is no single golden piece one can recommend directly.

If you are also looking to modernize your existing legacy system, consult with our enterprise application modernization services specialists here at A3logics. Our EAM specialists have a decade long-experience in recommending personalized strategies and a forward-looking modernization plan to businesses of all kinds. 

Drop us a line to have a free consultation with our EAI specialists about your legacy modernization needs.