A brief guide to legacy system modernization

Vineet Sawant

computer icon with various business icons surrounding it


As we enter a new era of AI advances and data-driven business models, businesses are taking a fresh look at their technology systems. Instead of seeing IT as a cost required to run their business, they’re recognizing that technology can be an asset that grows their business. 

Your legacy systems may have fueled your growth in the past, but they’re reaching a maturity point. As you embark on new paths and strategies — such as social, mobile, analytics and cloud strategies like AI and IoT — you’ll likely end up, like most businesses, ignoring your old systems. 


graph showing legacy modernization over time, and how businesses can get stuck in the stall zone


But don’t linger in this “stall” or “dilemma” zone. It’s time to unlock the data and intelligence held in your legacy systems and include them in your digital transformation journey. In this guide, we’ll discuss how to make this happen — so you can position yourself to meet customer demands and business challenges and redefine your business. 

What is a legacy system?

A legacy system refers to outdated infrastructure, applications and processes. Typically housed in monolithic and tightly coupled environments, legacy systems generally run on software and hardware that is customer-owned, hosted, managed and supported. Although these systems are functional, they can create a financial burden to maintain, require difficult-to-find IT skills to operate and hinder your ability to innovate.


What is legacy modernization?

Legacy modernization is the process of updating and optimizing business systems to gain operational efficiencies, address technology constraints, meet customer experience expectations and support adoption and integration with other systems based on newer technology platforms.

The process of legacy modernization is initiated when organizations find themselves stuck between maintaining older, expensive hardware that is unable to interoperate with new technologies, and undertaking the monumental task of revamping infrastructure to take advantage of a best-fit platform to support its business goals. This leads CIOs and IT leaders to balance a variety of factors to determine the time to modernization, where modernization delivers the most impact and how to properly plan the project to reduce business disruptions. The minimum goal of legacy system modernization is to achieve a like-to-like system parity with operational enhancements. The ideal goal is to achieve significant leaps in performance, agility and innovation.  

Legacy modernization can range widely on the spectrum. One option may be to refactor code using migration tools to run the same system with minimal code changes on more modern infrastructure. In some cases, emulators are available that let you avoid code changes altogether. On the other end is completely re-architecting the system, replacing the legacy system with one built using cloud native development tools.     


Legacy system modernization strategies

Most legacy modernization projects can take either a revolutionary or evolutionary approach.

Revolutionary modernization

Revolutionary modernization refers to a complete, from-the-ground-up infrastructure transformation. For example, mergers and acquisitions frequently require this approach when one business must quickly adapt to the infrastructure of the new entity. Another common application of a revolutionary approach is where the legacy system has gone beyond being a burden and has become a risk. A common problem is when legacy systems are no longer supported by their vendors, which leaves organizations with security or compliance holes, and no new patches or updates. This approach presents risk, disruption and higher costs.


Evolutionary modernization

More risk-averse organizations usually choose the evolutionary method. The evolutionary modernization approach is a multi-phased, long-term model to achieve the same goals as the revolutionary approach. With the evolutionary approach, organizations take a workload-by-workload path to modernization, modernizing one workload at a time. This slower approach reduces business disruptions and spreads costs over time. Organizations locked into vendor contracts might take this approach to modernize around the legacy system while waiting for contracts to expire. Also, hybrid models allow organizations to connect cloud resources to on-premises environments to support evolutionary legacy transformation.


Six considerations for choosing a legacy modernization approach

To decide between adopting an evolutionary or a revolutionary approach, you should start with a thorough evaluation of your operations to determine the best path forward. The evaluation process should include assessing the following considerations:

1. Workload

Audit applications and software to determine their business value, criticality and where there are opportunities to modernize. Assess workloads holistically in context of the go-forward business direction.  

2. Architecture

Review infrastructure elements, performance and ROI to assess where newer technologies can deliver better outcomes.  

3. Financial

Evaluate spend to find budget burdens and ways to optimize resources to support current operations and prepare for what’s next.

4. Risk

Weigh the possible disruption to the business, as well as any associated impacts to business processes and organizational culture against the desired outcomes of your legacy system modernization project. Also consider the risk of keeping the legacy system as-is, including maintenance for out-of-support systems or those with limited resource support staff.

5. Operations

Determine which new skill sets, training and processes need to be factored into modernization costs and timelines.

6. Security

Plan ways to protect systems before, during and after modernization to avoid data loss, outages or exposure. In the security plan, organizations should confirm adherence to governmental and industry compliance regulations in the new environment.


The benefits of legacy system modernization

Modernization offers the following payoffs:

  • Operational efficiency: Modernized IT systems deliver better performance, faster time-to-market and better experiences for internal and external customers.
  • Reduced costs: Decommissioning monolithic apps, data center space and physical servers reduces software, hardware and licensing costs.
  • IT agility: With modernized systems, you can tune your environment to react faster to seasonal fluctuations, leverage data across the organization, integrate systems to optimize processes, adapt to business conditions or quickly jump on the next innovation opportunity to beat your competitors to the marketplace.


Why do you need a legacy system update?

Factors that drive the business decision to undergo legacy system modernization include:

  • Cost: Aging infrastructure costs more to maintain than modernized infrastructure.
  • Security: One of the biggest risks of unsupported legacy infrastructure is the lack of security updates provided by the vendor to protect against a constantly evolving threat landscape, or difficulty in keeping up with patches and updates, which can leave you vulnerable.
  • Compliance: As regulatory auditing and controls become more stringent, legacy systems are unable to keep up with the processes needed to avoid penalties or loss of certification.
  • Competition: Without modernized applications, it’s nearly impossible to keep up with customer experience demands and bring innovative new products and services to the market before your competition. Innovation increasingly requires modernized IT that supports DevOps practices, shortening the development and release cycles.
  • Productivity: Your employees are hindered by a lack of access to next-generation tools to help them communicate, collaborate and work more efficiently.


Legacy system modernization approaches

There are seven common approaches, often referred to as the “seven Rs,” to legacy system modernization, each with its own degree of difficulty and payoff. The right option for your organization will help both reduce your costs and make your operations nimbler. The legacy modernization Rs are:

1. Replace

Completely decommission and replace existing legacy components.

In this approach, the organization completely scraps the existing system and replaces it with a completely new system, taking into account new requirements and changed or optimized business processes. For example, replacing a legacy email system with cloud-based Microsoft 365, or your homegrown CRM system with Salesforce CRM.

Replacing with SaaS outright can be a faster route to the cloud, though it requires a significant amount of planning. IT teams must determine how existing data will be migrated and leveraged in the new system and account for the business disruption of user training and learning curves. You may also consider evaluating enterprise platforms or systems that meet the business need, and host it in a modern cloud environment.


2. Rebuild

Materially restructure and optimize legacy elements into a cloud native environment.

A full rebuild is the longest, most expensive route, but it delivers the maximum benefits. For most businesses, this is the ideal end state with many of these other options just serving as steps in the journey. 

As opposed to the other methods that only partially leverage modernized infrastructure, a full rebuild rearchitects the legacy system into a fully modernized, cloud native environment. This includes implementing DevOps methodologies and adopting technologies like containers, service meshes, microservices, immutable infrastructure and declarative APIs. The combination of methodology and technology enables more flexibility, better performance and lower operating costs in the long term.


3. Replatform

Move runtimes to a modern platform.

The replatform approach ports an application’s components to a new runtime platform with minimal code changes and with the same features (e.g., moving a COBOL-based system from a UNIX or mainframe system to a LINUX or Windows environment).

Developers can make minimal changes to the code to adapt to the new platform without changing the code structure or the system’s features and functions. Often compilers are available that let you port applications from one platform to another. An organization can take advantage of reduced infrastructure costs and improved performance, with minimal effort. Additionally, its able to continue to derive value out of legacy investment.


4. Rehost

Deploy legacy elements in a new environment (physical, virtual or cloud infrastructure) without recompiling, altering code or modifying functionality.

By rehosting, organizations can maintain their investment in legacy systems, like ERP or databases, and take advantage of better performance and security from the underlying infrastructure of the cloud.  

Rehosting, also called the “lift and shift” migration approach, lets organizations get to the cloud faster without having to refactor or re-engineer existing systems. An enterprise takes its existing ERP system, database, or other workload and moves into the cloud as is (e.g., moving an SAP system from an on-premises data center to AWS or GCP). However, this approach doesn’t fully take advantage of cloud native tools, performance enhancements or cost benefits.

Often, emulators are available that can perfectly run legacy systems in modern environments (e.g., COBOL mainframe emulator for Windows).


5. Refactor & rearchitect

This involves implementing new technologies in tiers of the application to take advantage of cloud-based or other systems, with some code changes in selective tiers. 

Usually seen in hybrid environments, this option leverages changing parts of the legacy component to optimize code for better performance. Often this involves changes on the backend without any major changes in the frontend of legacy systems or to the functionality offered. This is less disruptive than a complete rewrite, although technology limitations may limit what is possible.   

In this scenario, an organization might move the database of a monolithic application to the cloud while still running the majority of the application onsite. As the term implies, the application architecture of the system is optimized, often with code changes. This may involve making backend adjustments to legacy elements to ensure smooth legacy systems integration with cloud elements. This gives an organization time to rationalize each application component individually to determine the best-fit platform for improved performance.


6. Retain

Maintain the current environment with no changes or updates.

An upcoming merger, end-of-life announcement or other consideration may mean that there isn’t a compelling enough case for modernization. Even though the short-term decision is to retain, there should be a long-term strategy in place that ensures the sustainability of critical functions.

Generally, retention is a temporary measure, not a long-term strategy. Organizations should be careful about adopting this “kick it down the road” approach. The longer inefficient, resource-heavy infrastructure sticks around, the less budget and resources are available to invest in innovation.

Often, a retain approach may necessitate building “connectors” or “bridges” to interoperate with other modern elements in the organization.

Low-technology and proven AI models like Robotics Process Automation (RPA) may impart a fresh breath of life to legacy systems with minimal investment and risk. 


7. Retire

Retire the system altogether after evaluating the workloads, usage and business impacts.

After an assessment of the workload, you may determine that it is prudent to retire the application and move any remaining users to alternate systems that are already in place. Often this may necessitate process redesign to make up the gap in operational processes from the retired system, and may also offer an opportunity for improved and optimized business processes.


Challenges with migrating legacy systems

Despite the benefits of legacy system modernization, the process presents a unique set of challenges. CIOs and IT leaders can expect to face the following obstacles:

  • Business transformation resistance: Legacy system modernization reaches outside of IT to transform business processes and increase efficiency. By focusing on business processes first and technology second, organizations can better assess and prepare for all of the impacts of transformation, including cultural and technical. Without planning, redeveloping processes and retraining workers comes at a cost to productivity and possibly employee morale if the organization is resistant to the changes.
  • Balancing risk: Properly assessing the financial, security and operational risks of your modernization decision is critical. But, in many organizations, it’s difficult to find the right data points to make decisions and reach consensus among stakeholders.
  • Data management constraints: Before embarking on a modernization project, it’s important for an organization to take a long, hard look at its underlying data. This is the time to clean up data and update governance rules to avoid dumping dirty data into a modernized system. Look for ways to better manage data and harness it to support the organization’s business goals.


Preparing for legacy system modernization

Your modernization project could be upgrading a small, but important backend system that barely causes a hiccup or it could be a widespread change that impacts the entire organization. In both cases, it’s important to prepare for a legacy modernization project by focusing on these three areas:

1. Assess your maturity

The first step in application modernization is to assess your level of maturity. If your organization has never undergone a legacy system migration and is at an early stage of maturity, you should likely focus on low-hanging fruit, like multiple instances of the same application, different applications that handle the same business functions, or non-essential or underutilized applications.

2. Build a plan

Gather information around timelines, budgets and business needs to determine where modernization efforts provide the highest return on investment. In addition to the IT team, your data, security and compliance teams should also be involved at this stage of the modernization preparation process.

3. Plan ongoing modernization stages

Application modernization should be an ongoing endeavor that touches every part of your IT and business processes. By its very nature, it involves maintaining the newest, most efficient, feature-rich and modern infrastructure available. At the pace of technological innovation, there will always be areas that can be adapted and improved.

For a deeper dive into these steps, see our article, "Why Legacy Applications Are Holding You Back." 


Legacy system modernization with Rackspace Technology

For the best results and minimum disruptions, partner with experts who have completed multiple successful legacy system modernization projects across diverse industries and geographies. Building on over 20 years of cloud expertise, Rackspace Technology can help your organization modernize your legacy applications, transform your IT operations and improve your business processes.

Our team will help your team at every stage, including assessing, developing, implementing and integrating modernized technologies in ways that make the most of your IT resources. We follow our proven approach — Process First. Technology Second.® — to solve all of your challenges, including working with you to understand your needs and create solutions that are positioned to deliver optimal business outcomes. Combining the right tools, techniques and expertise, we help ensure your organization is positioned to travel the right systems modernization path forward.

Find out more about our legacy application modernization services, methodology and success stories.


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