In this blog post, we’ll take a look at the business case for legacy system modernization and evaluate two different approaches for this complex process.
A diverse array of factors can drive companies to look for ways to modernize their mission-critical, yet highly out-of-date technologies. These may include the need to integrate with a specific new technology, fix a slow-performing component, meet new regulatory requirements, or any number of other motivations.
Although these are all valid and important reasons to update your legacy system, it’s vital to take a step back and analyze the big picture before you get started with any legacy system upgrade or modernization project.
At the end of the day, it’s all about maximizing business outcomes, rather than implementing specific fixes or adding in a new feature or two.
Let’s take a look at four of the most important business motivations driving the need to rebuild aging IT systems.
4 Key Business Reasons to Fully Modernize Your Legacy System
1. Security Vulnerabilities
Cybersecurity risks are on the rise. In fact, in 2019, Juniper Research reported that cybersecurity breaches will increase by close to 70% over the next five years, reaching a staggering $5 trillion by 2024.
Although there are many steps you can take to mitigate the risk of cyberattacks, outdated systems are particularly difficult to defend. Security updates and patches may be overlooked or simply no longer available for some obsolete technologies.
Put simply, defending your legacy system from the constantly evolving cybersecurity risks and new hacker techniques is, more often than not, a lost battle.
2. Poor Performance and System Failure Risks
Legacy system performance levels are a key element to evaluate when considering modernization. If your system performs at less than optimal levels, what is the true cost in terms of lost operational efficiency and, more importantly, lost revenue due to slow service or negative user experiences?
In addition, integrations with new technologies are normally much more expensive, more technically challenging, and sometimes impossible with legacy systems. And the cost of not implementing new technologies can cause your business to lose out on greater operational efficiencies, faster time to market, more personalized product or service offerings, improved customer service, and many other competitive advantages.
Finally, as painful as it may be, it’ important to consider the cost of complete system failure. How much would it cost your business per day if one of your essential operational technologies failed? Worse still, how much would it cost you in lost business and negative brand reputation if a client-facing app were to fail?
3. Maintenance Costs and Talent Shortages
As they age, IT systems become increasingly more expensive and more difficult to maintain. As rule, developers need a lot of time to figure out parts of the project, as obsolete code can be quite messy and unstructured.
Another important consideration to keep in mind is that legacy code often lacks proper testing. Tests guarantee project integrity when integrating new features and updating existing ones. New technologies and approaches provide automated testing, loosely coupled project modules, and system monitoring, which support easy connections between various systems, streamlined deployment, etc.
In addition, on top of the current shortage of IT talent, finding talent willing and able to work on outdated legacy systems can seem like finding a needle in a haystack.
According to a report from Deloitte, “legacy coder erosion” is a major issue for many companies. The report states, “over the last five years, businesses have lost an average of 23% of their mainframe workforce; of those, 63% of positions remain unfilled.”
4. Negative User Experiences
Finally, it’s imperative to consider the user experience of your customers or employees that use the legacy system to complete transactions or perform operational business tasks.
A system that has an outdated user interface, is slow to process requests, or no longer meets evolving customer or employee needs, can severely limit business growth and productivity.
Your customers may seek out other options that meet their needs better, leading to lost revenue and a damaged brand reputation. And, although the effect may not be as powerful or swift in the case of employees, outdated business technology can influence an increased turnover rate. This is especially true for positions that rely heavily on these types of technologies for many of their day-to-day tasks.
What’s the Best Approach for Modernizing a Legacy System?
Once you’ve decided it’s time to modernize your legacy system, the next decision you’ll need to make is how to go about this process. There are essentially two major approaches to consider:
a. Quick-Fix Approach: Fix specific issues and/or add new features within the existing code
It’s perfectly understandable why many organizations would, at first glance, decide to simply fix specific problems or add one or two new features to their outdated system vs. rebuilding it entirely. But, especially in the case of customer-facing or other business-critical applications, this is not the best route.
The time and cost involved in these types of “quick-fix” legacy system updates turn out to be much greater than initially calculated. Fixing issues or adding new features within existing code, using the outdated programming language and framework, is often extremely time-consuming, costly, and prone to error.
What’s more, by going this route, organizations lose out on the benefits of greatly improved security, better performance, lower maintenance costs, and improved user experience that come with a full rebuild.
b. Complete Rebuild Approach: Rebuild your legacy application from scratch, using modern programming languages and frameworks
Rebuilding your legacy system from scratch – again, especially in the case of core business applications or those that your customers use – will allow you to maximize the business value of this technology.
In terms of cost, it may seem much more expensive to do a complete rebuild, but in our experience, there’s often not much difference when it comes to larger legacy system modernization projects. And, considering the extensive business benefits and significant cost and risk reductions provided by a completely rebuilt system, you can expect a much greater ROI from this approach.
You may also be concerned that a complete rebuild will be disruptive to users of the system and your business operations. The best way to minimize the effect of this process is to use a step-by-step, microservices approach, rather than trying to rebuild all elements of the system simultaneously. Apps built with microservices also offer many other business benefits, including increased agility, security, transparency, scalability, predictability, and tighter alignment with your business domain.
The Bottom Line
When left unattended, aging IT systems can produce unexpected and often highly significant costs for your organization. This makes it essential for business and IT leaders to carefully evaluate the costs and benefits of the two main approaches to legacy system modernization described in this article.
Given the complexity of this type of project, it’s also extremely valuable to engage and experienced IT outsourcing partner (like TEAM International) that can help completely rebuild your legacy systems quickly, cost-effectively, and with minimal impact to users and your business.
Contact us today to kick start your legacy application modernization project!