Importance of Legacy System Modernization in Enterprise Digital Transformation

For established companies, their inclination towards keeping their legacy systems makes sense. It helped them get a hold of the market and eased their growth rate.

But now, they need to opt for legacy system modernization as these systems are reaching a maturity level that requires disruption to match the advancements of current market standards.

Moving ahead in a competitive market space where AI (Artificial Intelligence) advances and data-driven business models give organizations a fresh take, many organizations recognize the need to implement the next-gen technology stack.

What is meant by a legacy system?

A legacy system is outdated software or hardware that businesses use even when other businesses opt for technological disruption.

Yes, legacy systems met the initial requirements and fulfilled their purpose, but businesses need to understand these systems will eventually curb their growth.

It is coined a “legacy” system because it will not keep up with newer systems. It will hinder the organization’s plan of achieving better scalability, productivity, and ROI (Return on Investment).

Why is legacy modernization important?

As the graph depicts, the need to modernize legacy applications emerges with time, and the best approach will always depend on the problem you are trying to solve.

The major roadblock to realizing the agenda of implementing game-changing digital transformation architecture is decades worth of legacy systems being used till now.

Yes, digital transformation will bring significant benefits, such as better cost savings and productivity boosts. However, suppose they want to realize unprecedented scalability and stability in the modern market.

In that case, they must opt for legacy migration by implementing innovative solutions.

Why do organizations need legacy system modernization?

The first thing that might come to a CIO’s mind is, “what worked yesterday won’t work in the future.” This is a never-ending cycle.

There are going to be disruptive technologies, and there are going to be competitors who will use that to outpace us.”

Well, they are not wrong! Legacy systems need modernization from time to time. That is how you will scale! If given a choice, will you settle for the profit margin you earned ten years back, or will you scale?

Modernizing legacy systems is crucial in keeping up with the market’s demand and achieving ever-growing scalability with better productivity and ROI.

Most importantly, this initiative is essential in streamlining the organizational digital transformation plan.

Let us list the reasons why organizations need legacy modernization.

1. Maintenance and support hindrances

The business needs and functions for which legacy systems were built have become obsolete with rapid technological advancement. Finding relevant skillsets well-versed in creating and maintaining these outdated systems becomes difficult and expensive for organizations.

So, to reduce costs and complexities, businesses should consider modernizing legacy software instead of spending unnecessary budgets on its maintenance.

2. Incompatibility with modern technology stacks

Legacy systems cannot adapt to modern business requirements as they are often built with outdated technology. This situation significantly hinders new business opportunities as their competitors might have scaled and progressed.

For instance, API (Application Programming Interface) technologies are a rage as they are compatible with most programming languages and frameworks. On the other hand, legacy systems are incompatible as they are built on older frameworks and carry out specialized tasks.

A workaround for this is developing custom APIs (application program interfaces). However, this option is often pricey and has a longer development timeline.

3. Security concerns

Legacy systems are built on outdated technologies, so their security frameworks cannot thwart cyber-attacks. In May 2017, the WannaCry ransomware attack highlighted how vulnerable legacy systems become when they do not get proper security updates.

In that case, around 300,000 machines in over 150 countries operating on Windows XP, Windows 8, and Server 2003 encountered security compromises.

What are the benefits of modernizing legacy systems in organizations?

Here are the expected benefits of legacy system modernization for organizations

1. Enhanced operational efficiency

With the help of innovative technologies under the digital transformation initiative, organizations can have better operational efficiency.

Such an architecture delivers better performance, has faster time-to-market for its product, and provides better customer experiences. All these factors are essential for functioning seamlessly in the modern market.

2. Cost reductions

When an organization decides to take its digital transformation initiative to the next level by decommissioning monolithic apps, data center space, and physical servers, it helps them reduce miscellaneous software, hardware, and licensing costs.

3. An agile IT (Information Technology) infrastructure

A modernized architecture helps organizations quickly tune their environment to react faster to market fluctuations. With advanced technologies like cloud and advanced data analytics, they can easily leverage data stored across the organization.

They can also integrate their systems to optimize operational processes that adapt to random business conditions.

Modernization also enables businesses to scale quickly, which means they can grab the next innovation opportunity and beat the competition in the marketplace.

Concluding thoughts – How do you carry out the legacy system modernization plan?

Modernizing the legacy system falls under the grand scheme of organizational digital transformation. The digital transformation initiative is essential for modern and established businesses to prepare for the future.

So, the real question is how can your organization be future-ready.

Rapidops has been providing its digital transformation services to many businesses for the past decade, and our digital solutions have impressed not just the clients but their userbase.

Get in touch with our team of digital experts to discuss your digital transformation roadmap, today. 

Apart from having a digital transformation roadmap, you must know how and where to carry out the legacy system modernization plan. Let us brief you on the same with the help of our tailored and curated frequently asked question segment.

Legacy system modernization FAQs