Modernizing legacy systems is a hot topic.
Businesses are gravitating towards modernization as a possible investment to their systems, especially as they’re struggling with legacy platforms.
The benefits of modernization are often viewed through one of two lenses: operational improvement or competitive differentiation.
Let’s further break it down into six categories.
5 Benefits to Modernizing Legacy Systems
1. Cost Avoidance
On the infrastructure side, we are moving away from homegrown assets such as local on-premises data centres, and instead, are moving toward utilizing cloud vendors’ utilities, mostly for cost reduction purposes. This eliminates a costly capital expense in favour of a more manageable and scalable operating expense.
You’ll also see savings by eliminating technical debt. Maintaining legacy systems can get very expensive, with organizations spending more than 60% of their IT budgets on maintaining legacy systems.
Much of this cost comes from managing old code and growing support tickets. Diagnosing issues takes hours or even days, and few on a team know how to work with the legacy system.
With a modern system, you can re-architect your legacy code with modern open-source languages. This helps you reduce the cost of having highly skilled developers maintain code that few can work with, while also reducing application incidents overall.
2. Business Agility
Legacy systems limit a business’ ability to create new features and services. Instead, most assign a team to break-fix & maintain without a plan for the future.
You can easily overcome these limitations by bringing your legacy software to the cloud by rolling out microservices and containerization, which also give your organization the ability to add new features and functionality.
3. Staff Productivity
It’s about getting developers and administrative teams to be more productive. The idea is to move the workforce to the cloud and leverage existing services to become more productive in day-to-day activities.
Here are a few examples of how a modernized system enables greater productivity.
Fewer application incidents: Your legacy system may have been an iterative project spanning years. Re-architecting your code for the cloud cleans up many of the technical limitations of the previous code. Moreover, a modern system is easier to diagnose, and issues can be addressed without disrupting the entire application.
Improved team utilization: Modern open source code enables anyone on your software team to diagnose and address issues, as well as add new features.
New Features & Functionality: Many organizations tie their business processes to the limitations of their legacy applications. Once modernized to the cloud, however, you can easily implement new features to the application. We’ve seen companies eliminate manual processes and deliver entirely new services to their customers after a modernization project.
Knowing Which Systems to Modernize is Essential to a Cost-Effective Modernization Project.
Let’s Prioritize Your Modernization Investments with a Modernization Assessment
4. Customer Experience
You hurt the customer experience when you tie your business operations to a legacy system. By modernizing, you enable new services and processes. Your business can transform its front-end user interfaces, create new features, automate previously manual processes, and even launch new service offerings.
5. Build a New Revenue Stream
Last, but not least, legacy modernization may unlock new revenue streams. An updated system can enable your business to create new services or processes that add value to the customer. Many legacy systems block businesses from being able to innovate because the system is not flexible.
Be it avoiding costs, being agile, operational excellence, creating new revenue streams, or enabling new revenue streams, these are five areas where most companies see gains following a legacy modernization.
Examples of Modernization Providing Competitive Advantages
In a recent case, a smaller organization — under 100 employees – moved their platform to a SaaS (Software as a Service) consumption model to gain net-new recurring revenue.
They moved their previous platform to a cloud vendor and created an API so that more partners and ISVs (Independent Software Vendors) can contribute and collaborate on their platform.
They’ve started earning about $200K in additional monthly recurring revenue and have the potential to reach two million, which didn’t exist before.
In another case, one company built a global footprint by leveraging the global cloud providers’ data centres to reach out to a larger audience. They’re using the vendors’ cloud infrastructure to provide cost-effective solutions built on scalability or replication.
A Modernization Assessment Will Identify Your Quickest and Most Cost-Effective Legacy Modernizations Options
Are Certain Benefits Conditional?
It depends on the application.
We need to assess the application and understand how modernization would provide one or more of the five benefits. For instance, back-office systems — such as email, collaboration software, productivity tools, ERP or HR applications — are more likely to experience cost avoidance as a benefit.
For another example, consider a monolithic application.
These applications use very old technologies and are difficult to integrate, so they’re a great candidate to decompose and turn into a microservices architecture. This lets businesses automate, integrate and bring new products to the market faster.
Monolithic applications written in old languages or technologies are a great candidate to get the benefit for business agility (as explained above).
Read More About Modernizing Legacy Systems and Applications:
When we’re talking about the benefits the cloud will bring or Application Modernization will bring, as a business leader, you need to understand your portfolio.
Not every application will benefit strategically from a modernization. You need to understand your priorities and key strategies, and then you can choose how to prioritize your investments.
Some of them are more important than others. Some of them should already be decided in terms of what needs to be replaced; we shouldn’t be spending a lot of time trying to modernize everything, but rather, modernize the applications that are critical for the business’ needs.
Architech brings 15 years of software development and modernization experience to the table. Contact us today to discuss how our 100-plus team of software engineers and business experts will execute your legacy modernization goals while reaching your time-to-market objectives.
Murat is a Business Development Manager at Architech and specializes in working with DevOps and cloud-native technologies, such as Kubernetes, PaaS (platform-as-a-service), private clouds and Microservices.