Are Legacy Systems Holding You Back?


Businesses are rapidly integrating technologies like artificial intelligence, blockchain, the Internet of Things, robotics, and 3D manufacturing into their workflows, revolutionizing their work. Still, some companies assume that evolving is too expensive and disruptive. History, however, demonstrates that maintaining the status quo is often more challenging in the long run.

Studies show that up to 80% of a company’s IT budget is used to keep aging infrastructure running. In an environment where IT leaders strive to reduce expenses, having budget-intensive legacy applications makes it challenging for an IT team to adapt to new technologies. Without software modernization, you’ll likely spend more on overhead expenses for technologies that don’t move the needle on your most significant initiatives.

In a survey published by CIO Dive, 56% of digital leaders stated that delaying application modernization resulted in failure to meet compliance requirements, and 51% reported an inability to scale critical services when required. This proves that delaying modernization and holding on to legacy systems has a high price for business.


A legacy system is an information system that may be based on outdated technologies but is critical to day-to-day operations. Replacing legacy applications with systems based on new, advanced technologies is a massive challenge for information systems professionals. As enterprises upgrade or change their technologies, they must ensure compatibility with old systems and data formats that are still in use.


Businesses undergo application modernization to bring older software up to speed with current computing standards. The effort usually fits into larger digital transformation goals. If there’s one overarching driver for the process as a whole, it’s to integrate IT technologies in a way that aligns with business demands for better agility and flexibility.

But barriers persist. For 28% of respondents to a survey of 1,420 IT decision-makers fear impacting customer experience is the top hurdle delaying software modernization, 26% said entrenchment of legacy IT systems, and 24% said the need to work within budget constraints. Nevertheless, the price is high for caving to these barriers.


According to that survey, nearly 70% of organizations say at least one in four of their applications are undergoing software modernization. For 24% of organizations, half of applications are also in ongoing modernization. Here’s why businesses need to continue making headway on software modernization efforts:

  1. Creates and maintains a competitive advantage by building a solution that helps you stay ahead of competitors

  2. Provides reliable processes with reduced risks, improves the system’s functioning, and enhances performance

  3. Ensures satisfied customers and happier employees by meeting UX and performance standards

  4. Being in a better position to scale in the future by transforming your IT stack into an agile platform for future change

  5. Secures your IT infrastructure from internal security breaches and external threats

  6. Addresses the financial inefficiencies of legacy systems

  7. Staying ahead of the enterprise software curve helps realize growth opportunities, exceed customer expectations, and gain new customers


Gartner, an information technology research and consultancy company, recommends a three-step process to evaluate how to approach application modernization:


Six main drivers for software modernization result from impediments created by legacy applications due to their technology, architecture, or functionality.

Three of these drivers are from a business perspective—business fit, business value, and agility. If the legacy application does not meet the new requirements imposed by digital business, it requires comprehensive software modernization to fit – it should be upgraded to provide greater business value. Applications that lack the agility to keep pace with the demands of digital business may be at cost or risk liability.

The three other drivers come from an IT perspective and involve cost, complexity, and risk. If the total cost of ownership of a legacy application is too high, the technology too complex, or the security, compliance, support, or scalability are being compromised, it’s time to modernize.

The best modernization strategies are those with multiple drivers from both a business and an IT perspective.


Once the opportunity is selected and the problem is identified, look at software modernization options. Gartner has ranked seven strategies by the ease of implementation—the easier they are, the less risk and impact they will have on the system and the business processes. The harder they are, the more risk and impact they will have.

  1. Encapsulate: Leverage and extend the application’s features by encapsulating its data and functions and making them available as services via an API.

  2. Rehost: Redeploy the application component to another infrastructure (e.g., physical, virtual, or cloud) without modifying its code, features, or functions.

  3. Re-platform: Migrate to a new runtime platform, making minimal changes to the code but not the code structure, features, or functions.

  4. Refactor: Restructure and optimize the existing code to remove technical debt and improve nonfunctional attributes.

  5. Rearchitect: Materially alter the code to shift it to a new application architecture and exploit new and better capabilities.

  6. Rebuild: Redesign or rewrite the application component from scratch while preserving its scope and specifications.

  7. Replace: Eliminate the former application component and replace it while considering new requirements and needs.


Ultimately, modernizing legacy applications means choosing between rearchitecting, rebuilding, or replacing. Rearchitecting has medium costs and risks, whereas rebuilding or replacing provides the best results with higher costs and risks. The key is to weigh all options to help identify the extent to which each will have the desired effect—with the minimum effort and maximum positive impact.

Software modernization requires more than competent developers and designers. There’s also a significant project management component—you have to build and release the new application without breaking the old one. It’s like rebuilding an airplane mid-flight, which is exactly as complicated as it sounds. Companies that choose the wrong development partner are likely to experience frustrating product failures, angry customers, and, ultimately, a loss of revenue.


10Pearls is a global digital transformation partner with expertise in customized and impactful business solutions. We support the entire development lifecycle – from concept and design to planning and implementation. We leverage cutting-edge technology to accelerate your business processes, enhancing efficiency and scalability to drive success.

Explore how 10Pearls can help you modernize legacy systems for optimal speed, scale, security, and user experience.

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