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What are legacy systems?

What, exactly, constitutes “legacy” systems depends on the business. Most companies have a mix of new software tools and old systems to run them on. Others update their applications piece by piece. And still, others are using both old software and old systems.

Legacy systems are typically understood as ‘old’ – a piece of software that would fit in in the early 2000s, not 2019 (or, better yet, 2020). But legacy software or a legacy system is not always defined solely according to its age.

For a functional definition, legacy can refer to any piece of software, incumbent technology or an entire system that blocks or slows down an organization’s ability to grow, shift and adapt in the face of changing market dynamics.

If the system has a lack of IT support or is unable to support the needs of an organization, then it is a legacy system. If a piece of software cannot be integrated with new processes or systems, then it is legacy software. Legacy technology will see problems related to:

  • Maintenance
  • Support
  • Improvement
  • Integration
  • User experience

Gartner gives a fantastic definition of both legacy systems — what legacy system modernization means within the context of this more functional definition:

An information system that may be based on outdated technologies, but is critical to day-to-day operations. Replacing legacy applications and systems with systems based on new and different technologies is one of the information systems (IS) professional’s most significant challenges. As enterprises upgrade or change their technologies, they must ensure compatibility with old systems and data formats that are still in use.

~ Gartner’s IT Glossary

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What is Legacy System Modernization?

In the simplest of terms, legacy modernization means updating all or some of your IT stack to better support your business goals and processes.

Business leaders drive innovation at their companies, but they need new technologies to enable and support this innovation in a real-world environment. They need fast applications, systems that support connectivity, and platforms that bring everything together. Most older IT stacks fail to meet those modern needs. Enter legacy system modernization.

We have three definitions that are critical to understanding why legacy system modernization is more than a software update:

  • Legacy Software: The applications your business has depended on – from the past year to the past decade or more.
  • Legacy Software Modernization: Updating and replacing outdated or inefficient systems, processes, and applications – in part or in full.
  • Replatforming: Starting from scratch with the platform on which your business applications are built (i.e. from self-hosted to cloud-based).

Clearly, not all of these options are created equal; some require a large upfront investment, while others may cause you to bleed money over the long run if you leave legacy software where it lies.

Best approach to modernizing legacy systems

If you need to modernize legacy applications, the best approach depends on the problem you’re trying to solve.

A bank with part of its mainframe application built in a COBOL/CICS environment faces a skills shortage. The application itself has no issues, but something has to be done. The management team decides to move it off the mainframe to an environment with more people available to support it.

Now the bank faces a range of different modernization options — rehost, replatform or rebuild. All have different purposes, effects, values, costs, risks, and impacts. But which one is right?

Replacement isn’t the only option

Application modernization is not one ‘thing,’” says Stefan van der Zijden, research director at Gartner. “If you’re faced with a legacy challenge, the best approach depends on the problem you’re trying to solve. Replacement isn’t the only option.”

Remove the obstacles to digital business

Legacy systems are often seen as holding back the business initiatives that rely on them. When a tipping point is reached, as the skills crunch example, it’s time to look to application modernization to help remove the obstacles.

Spending that money effectively will require application leaders to carefully select one of the six different modernization approaches.

  1. Encapsulate. To leverage and extend an application’s features and value, encapsulate data and functions in the application and make them available as services via an application programming interface (API). Implementation specifics and knowledge are hidden behind the interface.
  2. Rehost. Redeploy an application component to another physical, virtual or cloud infrastructure without recompiling, altering the application code, or modifying features and functions.
  3. Replatform. Migrate an application component to a new runtime platform. Make minimal changes to the code to adapt to the new platform, but don’t change the code structure or the features and functions it provides.
  4. Refactor. Restructure and optimize existing code without changing its external behavior to remove technical debt and to improve the component’s features and structure.
  5. Rearchitect. Materially alter the application code so you can shift it to a new application architecture and fully exploit new and better capabilities of the application platform.
  6. Rebuild. Rebuild or rewrite the application component from scratch while preserving its scope and specifications.
  7. Replace. Eliminate the former application component altogether and replace it, taking new requirements and needs into account.

“The key is to understand if your problem is caused by technology, architecture or functionality of the application, and how each modernization approach improves those aspects,” van der Zijden says.

After conducting a thorough assessment, the best choice for the organization facing the skills shortage problem above is between rearchitect and rebuild or replace. Rearchitecting has a moderate cost and risk but will yield moderate results. Rebuilding or replacing provides the best results, but with higher costs and higher risk.

Why Do You Need Software Modernization?

Modernizing legacy software is about more than an update. It’s about bringing your entire enterprise up to speed with the digital environment.

According to Logicalis, more than 4 out of 10 Chief Information Officers considered “complex legacy technology” a significant barrier to true digital transformation. At the same time, the majority said they were focused on digital transformation and over half had plans to either replace or adapt existing systems to overcome the obstacle. A large number of CIOs, in other words, recognize the need for legacy transformation and are beginning to take steps toward legacy system modernization.

The need to address this barrier is becoming increasingly urgent as the enterprise environment in most industries is quickly turning digital-first. Consider the insight from one Deloitte partner below:

Now organizations are increasingly digital. They are also changing very rapidly, and these legacy systems can lack the flexibility and scalability to keep up—especially given today’s tech-savvy end consumers. They are often handcuffing the business with what we call legacy technical debt. It’s a real problem. Modern concepts like microservices, the cloud, and mobile computing are simply beyond many legacy technologies.”~ Haissam Issa, Deloitte Consulting LLP

If you don’t need software modernization now (and you probably do), you will certainly need it in the near future. Let’s dive deeper into what the research says about legacy systems and modernization – and a few specific reasons why you should consider it.

8 Reasons to Consider Legacy System Modernization

A legacy software update is not necessarily an all or nothing event. But your organization or enterprise most likely needs some kind of update to stay efficient, profitable and up the task of meeting customer and stakeholder expectations.

Consider the following reasons to look at legacy modernization:

  1. Maintain (or create) competitive advantage by building out a lightweight solution when compared to your competitors.
  2. Experience better performance, more reliable processes and reduced risks with a better functioning system and containerized applications.
  3. See more satisfied customers and happier employees by meeting UX and performance standards.
  4. Get ready to scale in the future by transforming your IT stack into an agile and innovative platform for future change.
  5. Keep your IT infrastructure secure from external threats (and internal security breaches).
  6. Introduce simpler integration with the host of new enterprise software, from accounting software to CRMs used by thousands of businesses.
  7. Improve your bottom line by addressing the financial inefficiencies of legacy software.
  8. Realize growth opportunities, exceed customer expectations and reach new customers by staying ahead of the enterprise software curve.

In a phrase, you cannot separate your software systems from your business goals and outcomes. It may seem like the decision to modernize software is an IT decision, but it’s not. It’s really a business decision.

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