How to Modernize Legacy Systems

How do you modernize legacy systems without disrupting your business?
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Some things get better with age. Wine. Whiskey. Cheese. Friends. Antiques.

Technology? Not so much. That’s probably why you’re reading this article on a brand-new laptop or the latest smartphone, rather than printing it from the nearest fax machine.

Even so, many companies still rely on outdated technologies, infrastructure, and processes. Whether it’s SAP (Systems Applications and Products) systems or on-premise e-commerce platforms, these “legacy systems” are slow, increasingly frustrating to use, and unnecessarily expensive to maintain.

The problem is widespread; even billion-dollar companies are guilty of sticking with suboptimal technology. But it’s especially common in B2B. That’s partly because modernization is usually driven by rising consumer expectations and demands. When you sell to other businesses that run on equally outdated technology, those expectations aren’t as high.

So if legacy systems are so bad for business, why aren’t more companies doing something about them?

The most common answers are the upfront cost of overhauling IT infrastructure, the time it takes, and the fact that staff are simply “used to the old systems.”

Those aren’t reasons. They’re excuses. And they’re holding you back from reaching your full potential.

What is legacy modernization, and why do it?

If a legacy system is outdated technology infrastructure, legacy modernization is the process of updating and optimizing that infrastructure to better support your business goals. It has a huge impact on employee productivity, but there are plenty of other benefits too:

1. Streamline operations and improve efficiency
2. Remove technology constraints
3. Reduce IT maintenance costs
4. Improve the customer experience
5. Support the integration of new technology solutions across the business
6. Strengthen cybersecurity protection and regulatory compliance
7. Stay ahead of competitors

That last point may be the most important. Falling behind your competitors on technology capabilities is one of the fastest ways to lose market share.

Remember: a full overhaul isn’t always necessary.

This is important, so we’ll say it again to be sure. Modernizing a legacy system doesn’t necessarily mean replacing it entirely. Quite the opposite. The best modernization solutions build on the data and intelligence stored in your existing systems and leverage new technologies to unlock their potential. Full overhauls are a last resort; more often than not, there’s a way to make your existing system pay off without replacing it.

When is the right time to modernize?

If you’re asking that question, it’s probably the right time. You wouldn’t be asking if your legacy system were still doing the job. But when the time comes, the longer you wait, the more your old system slows you down — and the longer it takes for a modern system to catch you up.

Once you’ve decided to modernize, it’s important to ask a few questions. Has your business already gone through a legacy system migration? What are your expectations? What’s your budget, and what’s your timeline? Once you have the answers, you’ll be better prepared to oversee a successful modernization project.

All that’s left is choosing the right approach...

How should I approach legacy system modernization?

There are six widely accepted approaches to legacy system modernization, also known as the “six Rs,” each with different benefits and impacts. We’ve ranked them below from least risky to most risky — the riskier the approach, the greater the impact it will have on your business.

1. Retain
Keep your current system without changing or updating it.

Depending on what’s happening in your business, it may not make sense to make major changes right now. For that reason, you retain your existing system as it is. You may add a few new technology features here and there, but the core system? It stays the same.

That said, just because you don’t need to modernize right here, right now doesn’t mean you won’t need to in the near future. Retaining is a short-term strategy. So plan ahead, and identify when the opportunity for change will come.

2. Rehost
Move existing components to a new environment (for example, cloud infrastructure) without changing the code or functionality.

Rehosting is an effective way for organizations to keep the data stored in their legacy systems while taking advantage of the performance and security benefits of modern technologies. Rather than reworking the entire system, rehosting lets you effectively “lift” your existing infrastructure and place it somewhere new. If that sounds simple, it’s because it is.

While rehosting lets you move to a new environment, it won’t necessarily give you access to all the benefits that environment offers. You’ll still be running an outdated system at the core — just in a nicer environment.

3. Replatform
Migrate to a new platform with minimal code changes.

With this approach, companies move their legacy components to a new runtime platform. Developers can adapt your original code to the new platform with minimal changes, without touching the system’s features and functions.

Once they’re on the new platform, companies can benefit from lower infrastructure costs and improved performance, while putting in minimal effort. That makes replatforming a smart option for preserving the value of your legacy investment.

4. RefactorMove to a completely different application architecture and unlock new, better capabilities.

This option identifies the most business-critical legacy components and optimizes their code to improve performance. Often, these changes focus on improving the backend of your system while leaving frontend functionality relatively intact. That makes refactoring less disruptive than a full rewrite, although there are limits to how much change it can deliver.

5. Rebuild
Restructure and optimize your legacy components in a cloud environment.

A rebuild is the most expensive, time-consuming, but also the most rewarding solution for your business. It’s the option most companies choose, because the end result is a fully modernized, cloud-ready environment.

While the other approaches available to you only partially improve your existing system, a rebuild lets you optimize it from the ground up. The result is greater flexibility, better performance, and lower operating costs compared with the process of keeping legacy systems up to date.

6. Replace
Completely remove your legacy system and replace it with something that better meets your new requirements and needs.

If your old system is truly beyond saving, retiring it altogether and replacing it with a completely new solution may be your best option. In many cases, that will be a SaaS solution better suited to your business processes.

A full replacement of your legacy systems can be a faster, more direct path to modernization, but don’t forget that it requires significant planning. You need to understand exactly how your existing data will migrate to the new system, as well as the level of training needed to run it effectively.

Which approach is right for me?

Whether you choose a less disruptive approach or a full redesign will depend largely on how your current system performs, as well as how ambitious you are about how far your business can go. But if you’re struggling to identify the right approach, ask yourself the following questions:

* Which workloads are most valuable to my business, and where are there opportunities to modernize?
* Where will new technologies deliver better results and the strongest ROI?
* How much does it already cost to maintain my legacy system, and how much can I afford to spend?
* How much disruption can my business handle, and what are the risks associated with modernization (as well as with keeping my current system)?
* Do I need to factor new skills, training, and processes into the timeline?
* What do I need to do to protect my system from data loss, outages, or exposure?

And if you’re still worried about the disruption modernization might cause, think back to the day you first powered up your legacy system. Chances are that system was put in place to modernize an older one — just as that system replaced another before it.

If you look at the history of technology in business operations, you’ll realize modernization isn’t some huge, scary leap. It’s a necessary step in an ongoing cycle.

Are you ready to take it?

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