Legacy Application Modernization Roadmap - a Step-by-Step Guide

Seven approaches to legacy system modernization

Let's start by discussing the most popular approaches to legacy system modernization. The choice of each depends on the individual situation and business needs, so you can consult with a company that specializes in legacy app modernization before making a decision.

What are the 7 R's of modernization?

7 R's of modernization are: retain/encapsulate, rehost, replatform, refactor, rearchitect, rebuild, replace.

Now, let's take a closer look at each one of these stages.

Retain/Encapsulate

The Retain/Encapsulate approach in legacy system modernization involves preserving the existing application while encapsulating it within a modernized layer. It aims to isolate the legacy system from the rest of the architecture, allowing it to continue functioning without hindering the adoption of new technologies or business processes. 

Rehost

Rehosting involves moving the legacy system to a new hardware or software environment without making significant changes to the underlying code. It can include migrating to the cloud or virtualized infrastructure to improve performance and scalability. This solution reduces the cost of maintenance and increases system efficiency. 

Replatform

Replatforming entails moving the legacy system to a new platform or technology stack, often with some modifications to ensure compatibility. It aims to leverage the benefits of the new platform while minimizing the need for extensive code changes.

Refactor 

Refactoring involves making improvements to the existing codebase, such as restructuring the database or rewriting parts of the system, without changing its overall functionality. It focuses on enhancing code quality, maintainability, and extensibility. Such a process makes it much easier to fix bugs and add new features in the future.

Rearchitect

This approach to legacy system modernization is about redesigning the system's architecture to address limitations and align it with modern principles and practices. It may require significant changes to the system's structure and components. Rearchitecting provides an opportunity to align the legacy system with current technological trends and enables easier integration with other tools and services; however, it requires careful planning and skilled architectural expertise.

Rebuild

The rebuild approach in legacy application modernization involves completely rewriting the existing application from scratch while aiming to replicate its functionality. It entails discarding the legacy codebase and starting fresh with the newest solutions available. It allows for a clean slate, addressing the limitations and constraints of the legacy system while maintaining the functionality of the existing infrastructure.

Replace

In some cases, replacing the legacy system with a completely new off-the-shelf solution or custom-built software may be the most viable option. This approach offers an opportunity to redesign the system from scratch, implement whole new functionality, and leverage modern technologies, architectures, and development practices. This option is usually the most cost and time-consuming as it requires careful planning, data migration, and comprehensive testing to ensure a smooth transition.

Legacy system modernization approaches - Detailed comparison

Main technologies for application modernization

Cloud

Cloud computing involves using remote servers hosted on the internet to store, manage, and process data instead of relying solely on local infrastructure. In the context of legacy app modernization strategy, this solution provides greater scalability, flexibility, and cost optimization by leveraging on-demand resources, auto-scaling, and pay-as-you-go pricing models. Cloud computing enables organizations to modernize legacy applications by:

• optimizing infrastructure costs,
• increasing scalability,
• simplifying management and maintenance.

Containers

Containers, such as Docker and Kubernetes, are lightweight, isolated environments that package applications and their dependencies, allowing them to run consistently across different computing environments. Containers provide portability and flexibility, making it easier to modernize the system. Legacy applications can be containerized, allowing for improved deployment, scalability, and management. 

Microservices

Microservices architecture involves breaking down a monolithic application into smaller, independent services that communicate with each other through APIs. This approach enables legacy app modernization by transforming the application into a collection of modular services. Each microservice can be developed, deployed, and scaled independently, promoting agility and flexibility. Microservices allow organizations to update and enhance specific components without disrupting the entire system which makes it easier and faster to update.

By combining cloud computing, containers, and microservices, organizations can modernize their legacy applications to meet the demands of today's digital landscape. These technologies provide the necessary infrastructure, deployment mechanisms, and architectural approaches to enable fast and smooth business growth.

<span class="colorbox1" fs-test-element="box1"><p>Don't believe the hype. Microservices aren't always better than monolith. Plus, there are other options. Read more.</p></span>

Why do you need a legacy app modernization roadmap?

Legacy system modernization is a big deal and such an operation cannot be left to chance. In this case, solid preparation and planning of the application modernization roadmap are as important as the process itself. Does the strategy require your time and commitment? Yes, it does, but certainly less than the subsequent remediation of errors associated with poorly executed rebuilding or restructuring. 

A legacy application modernization roadmap will help you:

• Identify your business goals and needs.
• Assess your organization's resources and decide in which areas you need development or consulting support.
• Estimate the time and cost required for upgrades.
• Identify the most important functionalities of the system.
• Reduce bottlenecks and slowdowns.
• Prepare a long-term growth strategy based on new opportunities.
• Prepare for potential difficulties and reduce the risk of error.
• Carry out the process faster and more efficiently.

Legacy application modernization roadmap - a step-by-step guide

What is the process of application modernization?

Application modernization is not a one-time process but a continuous effort to keep applications aligned with business goals and technological advancements. It can lead to significant cost savings, improved efficiency, better customer experience, and a competitive edge in the market.

To simplify it, the process of legacy application modernization consists of 9 essential steps:

1. Evaluating a legacy system.
2. Defining the problems.
3. Creating a unified product vision.
4. Establishing priorities, needs, and goals.
5. Choosing the application modernization approach.
6. Setting a timeline.
7. Writing a risk management plan.
8. Establishing KPIs.
9. Choosing the right partner.

Now, let's take a closer look at each of these steps.

Step 1: Evaluate your legacy system

Any change strategy should start with an understanding and assessment of the baseline. Analyze your legacy app. Consider its nature, workflow, advantages, key functionalities, and aspects that you are comfortable with and that you would like to keep or replicate in the new app. Identify how the current system is related to the others and how changing it will affect other tools and applications your company uses. 

Consider that you and your team are used to the current solution and have your own ways to deal with its limitations. To get a broader perspective and more objective insight, you can have your legacy app audited by a company that specializes in systems modernization.

Step 2: Define the problems

A key part of a rebuild and upgrade roadmap is to identify problem areas and pinpoint specific situations where the system is not working as it should. Maybe the case is internal workflow, or maybe the capacity of the system during periods of increased traffic. Maybe the application is keeping you from adding new integrations, or maybe you're concerned about security. Every industry has its own characteristics and requires different solutions, so the more accurately you identify your problems, the more apt you will be to solve them in your new system.

Step 3: Create a unified product vision

The possibilities for digital product development today are almost endless, and the scope for customization allows you to get a tailor-made solution. Create a clear, unified product vision: what the application should look like, what it should do, its place in your overall growth strategy, and which functionalities are key and convenient for you. This will help the development team offer you a product best suited to your company's needs.

Step 4: Establish priorities, needs, and goals

After describing the problems and limitations, it's time for the much more enjoyable part - the future! The main purpose of legacy app modernization is to enable you to achieve goals that were not previously within your reach, so at this stage of the strategy, identify your company's business and technological needs. Improved UX, cost-efficiency, better performance, greater scalability, lower maintenance costs, expandability, and integration – these are just a few of the goals you can achieve with modernization. 

It's crucial at this stage to decide what your priorities are. You can use a needs matrix to assess the goals that will give you the greatest benefit with the least effort and start there.

Step 5: Choose the application modernization approach

At this stage of your legacy app modernization roadmap you already have a clear understanding of the challenges and limitations of your current system and the needs you want to achieve, so it will be easier for you to choose the right upgrade approach we discussed earlier. If you have a limited budget for your modernization efforts and your app requires relatively few changes to function better, opt for a less radical upgrade, such as Retaining/Encapsulation, Rehosting, or Replatforming. If you need a major overhaul of the infrastructure or to design the entire system from scratch, consider Refactoring, Rearchitection, Rebuilding, or Replacement.

Step 6: Set a timeline

A strategy without a timeline is just a bunch of ideas, so carefully plan the timeline of your legacy app modernization. Take into account your company's development plans in the short and long term. Modernization is better done during a quiet period, so if you're in the middle of a major project, it's better to wait until it's completed. On the other hand, if you are planning to expand or develop, such as starting to sell in a new market, merge with another company or expand your staff, it is better to carry out the modernization earlier. That way, your company will be ready for new challenges and more traffic, and new employees will learn right away a system that will stay with them for a long time instead of a legacy system that will change in a moment.

When planning the timeline, also leave a margin for possible delays – in an agile development process, many ideas and modifications can be made during the process, so you'd better not be constrained by too rigid a schedule.

Step 7: Write a risk management plan

A well-planned and effective app modernization roadmap allows you to minimize the risk of mistakes, but as they say – expect the unexpected. In any business operation, something can go wrong, and the point is not to hope that problems don't happen but to be ready when they do. Good practice in preparing a risk management plan is the "What if..." method. Write down as many potential problems you may encounter as possible. Don't limit yourself! The more black scenarios you work through at this stage, the easier it will be to implement disaster recovery if any of them become a reality.

Step 8: Establish KPIs

How will you know that legacy app modernization has delivered the expected results? It's easy - thanks to KPIs. Set specific and (if possible) measurable indicators of a satisfactory system upgrade. These could be page load speed, quality of performance, system capacity during periods of increased traffic, number of operations processed or any other software performance metric.

Step 9: Choose the right modernization partner

Legacy system upgrading is a huge step and demanding process, and although the results are worth it, at first it may seem challenging. Fortunately, you don't have to carry it out alone. Few companies have enough resources within their structures to carry out legacy app modernization in-house, so the final but fundamental step in the strategy is to choose the right modernization partner. 

Software houses specializing in custom software development, product design, consulting, and cloud solutions will guide you through the entire process from planning to implementation. Experienced companies have access to the latest technologies and development practices, as well as knowledge gained from previous implementations, so they will be a great support. When choosing a business partner, pay attention to the scope of services, portfolio, and ratings in trusted ratings that gather top legacy app modernization companies.

Specific cases - tips for fintech legacy apps modernization projects

Modernizing a legacy system, especially for a fintech app, involves several critical steps and considerations to ensure the process is smooth, secure, and compliant with relevant regulations. Here's what you need to include in your roadmap:

Assessment and planning

• Understand regulatory compliance: Fintech apps must adhere to various financial regulations like GDPR, PCI DSS, and others depending on the region.
• Identify legacy components: Determine which parts of the system need updating and how they interact with current processes.‍

Data migration and security:

• Secure data transfer: Ensure the security of data during migration, as fintech apps often handle sensitive financial information.
• Data integrity: Maintain accuracy and consistency of data during the transfer process.

User Experience and continuity:

• Minimal disruption: Ensure the modernization process causes minimal disruption to existing users.
• Enhanced User Experience: Aim for an improved user interface and experience, crucial in fintech applications.‍

Regulatory compliance and auditing:

• Continuous compliance monitoring: Regularly check compliance with financial regulations.
• Auditing and reporting: Implement auditing mechanisms to monitor transactions and system activities.

<span class="colorbox1" fs-test-element="box1"><p>Need some help with modernizing your fintech application? Take a look at this ranking of top fintech software development companies.</p></span>

Specific cases - tips for healthcare modernization project

Modernizing legacy systems in healthcare, such as hospital management software or patient monitoring systems, requires a careful approach due to the sensitivity and critical nature of healthcare data and operations. Here's what you should include in your roadmap:

Compliance with healthcare regulations:

• Understand regulatory requirements: Adhere to healthcare-specific regulations like HIPAA (in the U.S.) or GDPR (in Europe) for patient data privacy and security.
• Audit trails and reporting: Implement mechanisms for detailed logging and reporting to ensure compliance and facilitate audits.‍

Data migration and integrity:

• Secure and confidential data transfer: Ensure the highest levels of security and confidentiality during data migration.
• Maintaining data integrity: Ensure the accuracy and completeness of patient data during and after the migration.

Integration with healthcare ecosystem:

• Seamless integration with existing systems: Ensure compatibility with existing healthcare IT systems, like Electronic Health Records (EHRs).
• APIs for interoperability: Use standardized APIs for integration with other healthcare systems and devices.

Patient data security and privacy:

• Advanced security measures: Implement robust security protocols to protect against data breaches and unauthorized access.
• Regular security audits: Conduct frequent security audits to identify and address vulnerabilities.

Minimizing disruption to healthcare services:

• Phased implementation: Consider a phased approach to minimize disruption to ongoing healthcare services.
• Backup systems: Maintain backup systems to ensure continuity of care during the transition.

<span class="colorbox1" fs-test-element="box1"><p>Need some help with modernizing your fintech application? Take a look at this ranking of top healthcare software development companies.</p></span>

What is the future of application modernization?

The future of application modernization will likely be characterized by a blend of technological advancements, methodological shifts, and a focus on security, sustainability, and enhanced user experiences. These trends will drive how organizations approach the modernization of their application portfolios to stay competitive and meet evolving business needs.

1. Increased emphasis on cloud-native technologies: The shift towards cloud-native architectures, including microservices, containers (like Docker), and Kubernetes for orchestration, is expected to continue. These technologies offer scalability, flexibility, and faster deployment, which are crucial for modern applications.
2. Adoption of serverless computing: Serverless architectures, where the cloud provider manages the server infrastructure, are becoming more popular. This approach allows organizations to focus more on application development rather than managing servers, thereby reducing operational complexities and costs.
3. Greater integration of AI and Machine Learning: Incorporating AI and machine learning into applications is becoming more mainstream. This integration can provide advanced analytics, improve user experiences, automate business processes, and enhance decision-making.
4. DevOps and Agile methodologies: The adoption of DevOps practices and agile methodologies is expected to grow, as they promote faster and more efficient development cycles. Continuous integration and continuous delivery (CI/CD) pipelines will become essential components of application development and modernization.
5. Increased focus on security and compliance: As cyber threats evolve, there will be a heightened focus on building security into the application development process (DevSecOps). Compliance with data protection regulations will also drive changes in how applications are modernized and managed.
6. Use of low-code and no-code platforms: These platforms enable faster application development and modernization with minimal coding. They can democratize application development, allowing business users to contribute to or even lead development efforts.

Modernizing legacy systems - Next steps

In the world of modern business, digital products are the cornerstone of operations and growth, but to keep it that way, software capabilities must keep pace with a company's ambitions. And even surpass them. Legacy app modernization allows you to improve performance, optimize user experience, save time and money, increase scalability, flexibility, and security, and strengthen your market position. Few investments can be said to be sure to pay off. Legacy system modernization is one of them.