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What business leaders should know for a successful legacy modernization?

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  • November 12 2021
  • 15 min read
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We can see that emerging technologies, growing customer expectations, and increased competition have redesigned industries in the modern world. Today companies are facing a pressure of developing new products and services to meet the changing needs of customers, and also to move ahead of their competitors. So, the company leaders are finding effective ways to modernize the legacy systems. Such a legacy modernization helps in streamlining the process efficiency, enhancing business performance, and also forming new ways to satisfy customers and clients. In this article, we will take a look at all the possibilities of improving the legacy systems.

Modernization of legacy systems: In a nutshell

Legacy modernization or legacy application modernization can be termed as the procedure of updating and advancing business systems to obtain operational productivity, address technical constraints, meet consumer needs and expectations and prioritize adoption and integration with the other systems based upon advanced technology platforms. It is adopted when the companies encounter difficulties in maintaining its older and high-priced hardware which fails to interoperate with the latest technologies in order to support its business goals and objectives. With the help of this approach, companies focus on improving its overall performance, agility and continuous innovation.

How do you modernize a legacy system? There are various paths to modernize legacy systems. You will find several legacy modernization examples to look upon. Many organizations go for “rip and replace'' legacy systems along with a new system developed from the ground up. Some prefer to transfer technologies, procedures, and also people from an external provider. One of the most efficient ways to attain legacy modernization is a complete automated migration that utilizes refactoring technology in order to transform legacy code and data into the modern platforms. Also, it allows companies to smoothly handle digital modernization initiatives without disrupting business operations. This completely automated digital migration enables organizations to go for legacy modernization at their own comfortable pace without facing any major business problem. 

Sometimes rather than replacing their legacy systems, or at the time of migrating to a whole new system, a lot of the organizations prefer to harden their current systems. It can certainly be a low-risk option that can help in saving time and money by minimizing support and maintenance expenses. It also enables organizations in unlocking additional value which can be further reinvested in the various digital transformation initiatives, and enhances application and system performance as well. So, the important part here is to know these significant legacy modernization techniques amidst the different legacy modernization challenges and use them wisely. 

Let us now comprehensively look into what McKinsey has to say about modernizing IT for digital reinvention.

It is certain that technology organizations are supposed to play a major role in enabling companies to capitalize on the latest digital capabilities. Such capabilities help the companies in building deep relationships with consumers, launching brand new business models, make procedures effective, and take better digital native company decisions. Also, the technologists need to prioritize on integrating these brand- new digital tools with the current legacy systems, which isn’t a very simple task. Companies are seen introducing expensive, complex initiatives that are designed for deploying digital tools organization-wide in order to observe if such programs fail to prove their potential. Therefore, it is found that the rich data sets are attainable only to a limited group of privileged users. Moreover, the innovation procedures utilized in one business unit are never given access across the company, and as a result, the effect of digitalization remains restricted. One important factor which is responsible for these shortfalls is the absence of a common operating model for the both IT and digital teams. The digital factory model which most of the companies use in order to launch their various digital programs helps in speeding up an organization’s pace of innovation within a very short time period. It was also observed that 60% of the companies with highest-value technology projects necessitate collaboration and delivery from various technology groups over both the IT and digital teams. But due to the lack of such a common operating model, the cooperation can be prevented. Also, the physical separation between the IT and digitals groups may lead to confusion among the stakeholders regarding the task handling in between the teams.

It is beneficial for the companies to shift to an integrated digital IT operating model which comprises one operating model and one view of how technology capabilities need to be delivered by both the digital and IT groups. With this model, companies can achieve exceptional business process efficiencies leading to better delivery of products and services to consumers. 

Below is the ideal model where teams can organize around technology capabilities instead of specified technology assets and functions, utilize agile methodologies in order to accelerate the provision of IT services.  

Illustration diagram describing a business model that helps in the legacy modernization
Source: McKinsey & Company


In comparison to the digital-born companies, the traditional companies are required to adopt a much different approach in regards to designing and managing organization enterprise architecture- a model that can be called as a perpetual evolution, since it gives importance to consistent changes to and modular design of business capabilities and also the technologies behind them. This approach can be seen encompassing a range of broadly known enterprise-architecture frameworks but also links them together in a completely new way. It makes the executives take an extensive view upon their digital capabilities and technologies, and also manage them in a manner which can further remove interdependencies and emphasizes speed. Due to the shift towards the perpetual-evolution model, it results in faster product-development cycles and greater operational efficiencies which meet the customer’s needs and expectations.

One important thing to look upon is that cloud-infrastructure adoption can be very beneficial for modernizing legacy IT systems as it helps in maintaining and enhancing agility, also enabling projects to scale up quickly which can be really important during times of any uncertainty. By diversifying resources and investments in the cloud, the companies can ensure that they are keeping up with the latest technologies. So, as enterprises move towards using the public cloud, they will also have to keep in mind to protect their data and applications. It is seen that over the past few years, most of the companies have altered their IT strategies to make a shift of an increasing market share of their data and applications to public cloud infrastructure and platforms. But using the public cloud can disrupt the traditional security models which the companies have built over the years. Therefore, companies are required to evolve their cybersecurity practices in such a way which allows them to protect their critical data and to completely exploit the agility and speed that these services offer. Here are four practices which can enable companies to develop a constant, effectual approach to public-cloud cybersecurity. 

Illustration diagram describing an effectual approach towards public-cloud cybersecurity

Develop a cloud-centric cybersecurity model

Organizations are required to make choices regarding how to manage their perimeter in the cloud and how much they will have to re-architect applications so that it gets aligned with their risk tolerance, current application architecture, resources available, and overall cloud strategy.

Redesign the complete set of cybersecurity controls for the public cloud

For every individual control, organizations are supposed to determine who shall be providing it and how accurate they should be.

Clarify internal responsibilities for cybersecurity in comparison to what providers do

Public cloud needs a shared security model, along with providers and their customers each responsible for particular functions. Organizations are required to understand this split of responsibilities. It will look really very different from a traditional outsourcing arrangement and also has to be redesigned internal procedures respectively.

Apply DevOps to cybersecurity

Let’s consider, if a developer can easily spin a server in just seconds but still has to wait for two weeks for the security team in order to sign off on the configuration, it therefore, leads to the diminishing of the public cloud’s agility value. To know more, read about DevOps and AIOps

Leaders' role in modernization of legacy systems

Let us look into where the business leaders need to focus while prioritizing IT modernization. They shall be adopting the various legacy modernization trends which are extremely important for modernizing legacy systems. 

Illustration diagram describing leaders' role in legacy modernization

Choosing the right transformation

For the right transformation, the leadership team should know exactly why they are embracing things such as artificial intelligence, machine learning or advanced analytics. At times the leaders are seen chasing the latest trends mindlessly, without understanding the real need of them, and simply trying to reduce costs via modernization. Most importantly, they should be considering in what ways their companies offer value to the consumers. Next, they should be looking after how technology helps in amplifying and optimizing that value. Therefore, the right approach towards modernization is the key.

Choosing commitment over alignment

One important fact to be remembered is that IT and business shouldn’t be aligned forcefully, since they are the part of the same business. It is important for everyone within the organization, starting from top to bottom, to be fully committed and engaged in regards to the IT modernization efforts, with the help of communications, strategy and utilization of technology. Leaders can allow IT to permeate over the company as it can be considered as a trusted extension of the business to obtain higher revenues, better values and greater business capabilities.

Choosing the right way to embrace technology

You need to understand that the reason why young companies could afford success was not only because they were new, but because they weren’t scared to experiment new things. The industry leaders should stop repeating the same old things and remain unburdened by historic procedures and legacy systems built to strengthen the existing conditions. Therefore, it is important for the leaders to adopt the right unified and strategic IT modernization approach.

Here are tech industry leaders of the Forbes Technology Council sharing tips on modernizing legacy tech.

Illustration diagram describing tips from Forbes Technology Council on legacy modernization


Leveraging an integration platform. An ecosystem integration platform helps your customer and supplier related procedures like order-to-cash and procure-to-pay to stick together. You get the freedom to lay out a roadmap which is totally business value oriented which particularly focuses the movement of on-premise applications to SaaS, also modernizing specific purpose-built, on-premise applications through API-based integration.

Finding the delays and removing it right away. Agility can be discouraged by the delays or wait times and it is even more applicable with legacy IT systems. You need to evaluate the failures in your workflows and accordingly plan your attack. A consistent approach for modernizing your infrastructure might need changes to the presentation layer through APIs, integration with workflow or service management tooling, or enhanced monitoring and telemetry.

Executing API gateway solutions. Utilizing API gateway solutions can be a great choice for legacy modernization. Along with digitization businesses and cloud enablement, APIs can well serve as an abstraction and controller layer on top of these legacy IT systems and applications (Amazon Web Services are mostly API-driven). The complete life cycle of APIs can be built and operated with an API gateway as well.

Modularizing the functions. You can perfectly deal with complex legacy applications by breaking down the monolith and modularizing the functions. Due to this, you can easily move to modern infrastructures like the cloud and containers.

Adopting the sustainable networking approach. It is observed that cloud computing is quickly transforming the way companies operate, and the appeal of an overlay solution is that businesses are able to utilize the tool without ripping out their legacy IT hardware or procedures. Also, by building a flexible infrastructure, you will also be able to handle any unpredicted future changes.

Defining a phased approach. One of the ways in modernizing legacy IT systems without any risk and at the same time, maintaining agility is to adopt a phased approach with well-defined steps which can separate the customer experience tier from the business logic and data tiers. The steps have to be well defined so that they are not continuous and mutually exclusive as well. It further gives a meaning that enterprise modernization is able to progress parallelly along with multiple tracks.

Identifying and eliminating duplicate functions. It is essential that CTOs working with in-house development and CIOs working with applications from third parties need to first look at all in-house systems, determine which are handling the same purpose and decommission those. They need to leverage the ones which remain, and also be conscientious regarding the frequent upgrades. While moving to SaaS, you shall prepare an ROI argument with the CFO about capital expenditure dollars versus SaaS dollars.

Automating what you have. Executing network automation with intent, intelligence and agility helps in ensuring that existing brownfield network devices and software are secure and up to date. This allows organizations to introduce modern greenfield equipment and architectures safely.

Go for the digital decoupling approach. As you can see, the majority of our customers have huge technology debt, and they struggle hard with legacy technology and associated talent-availability risk. Therefore, it is beneficial to consider the digital decoupling approach to modernize applications. You need to execute DevOps over legacy tech and the new target platform identified for application disposition.

Considering multiple systems instead of replacement. You will have to stop looking for new tech to replace the legacy systems and rather think about utilizing multiple systems to achieve the task but also shift accountability into other departments. Legacy systems help in driving the business procedure. You should focus on goals and outcomes, and then think how they can be reimagined in order to be more efficient for the company.  

Ensuring that the senior management is committed. It is seen that in the greenfield approach to IT transformation, the benefits of change outweigh the operational risks of replacing legacy systems. It is very essential to make sure that the senior management is committed towards leading the complete change project, redesigning development and delivery practices from end to end, and depending upon industry best practices and common IT standards.

Allowing employees to do the migration. It is necessary to make the new system use modern tech, and allow employees to migrate the systems themselves. After the early adopters in your organization jump on board, the others will want to join too. You shall be prepared for a lengthy process, but fortunately, if your internal leaders are utilizing it then you will surely succeed. 

There is a great saying, “You learn from your mistakes”, so here is how the leaders have embraced their mistakes, learned from them and came out more strongly ever contributing to the legacy modernization.

infographic in black and green showing pointers on approach of business leaders towards legacy modernisation or enterprise modernisation


Learning to be accountable. One common issue with the leaders is that they believe their organization should change in order to reach their business objectives, but they fail to recognize that the change starts with themselves first. Due to such awareness, they become blockers to their own organization’s growth and development. Therefore, the leaders have to be more accountable to realize the efforts they need to put from their end to bring a positive change within themselves and their organizations. 

Learning to give up the legacy mindset which is a blocker to growth. When leaders and organizations after following a certain approach gain success, they prefer sticking around that same approach and never embrace change for better business results and outcomes. They develop a legacy mindset and it stops them from trying new possibilities which can do wonders in their business outcomes. It is very important for the leaders to come out of this mindset and accept the ever-changing world around them.

Learning to embrace change. As Heraclitus says, “The only constant in life is change”. With aging technology assets, each of the organizations face this challenge of accepting change. Let’s say, if there is no requirement change, even then your technology estate will need change. There will always be a need to consistently patch, update and monitor for security issues in software libraries. And it's obvious that the rate of change in software is consistent, it has no end. Also, with the growing time, customer behavior and needs keep on changing then in such a situation the entire organization has to change its perspective and majorly focus on delivering the desired quality, specifications and service to its customers. 

Understanding your customers. During the legacy transformation, a leader should also concentrate upon customer’s needs and wants along with looking at its inward business expectations. The leaders can make a smart move in order to understand their customers choices by observing the customer data in the right way. Proper research has to be made by investing time and budget to capture the right customer data for taking the necessary data-led decisions for customers benefits. The leaders shouldn’t make the mistake of believing the fact that their customers are still happy to receive their same old products and services. 

Prioritizing data while making the modernization plans. If a progressive company is given a chance to transform a legacy part of the business, it would go for actual modernization rather than creating a replica in newer technology. For instance, if you plan to not opt for actual modernization in regards to UI and CX, then you can only expect short-term performance enhancements instead of long-term ones and also reduced cost, which won’t be long-lasting. So, the progressive companies tend to look after all the possibilities which can help them in successfully modernizing the legacy systems. One such active initiative taken by companies is that while knowing their current customers, they should also put an effort to know their future customers as well. Therefore, it can be done by understanding one of the greatest assets for business, i.e., data. Data enables in driving greater business value for the companies which has to be made a priority. To know more, read about the business value of having sound data strategies and how to capitalise on consumer behaviour with sound data driven strategy.

Not trying to do everything at once, as it leads to failure. If you try to work on multiple things at the same time then it can be a real disaster. It is very important to solely focus upon the major legacy replacement programmes and not get distracted by simultaneously concentrating upon various other initiatives within the same time period. As transformation and modernization comes at a cost, it also can be considered as one more reason to limit the work in progress. So, by stopping the less important work and allocating their budgets for the transformation can be a great idea too. Basically, the leaders need to smartly fund their legacy transformation by cutting short of the expenses incurred for other unnecessary tasks and programmes.

Being aware of the worst strategic mistake. Joel Spolsky tells in his essay, “Things you should never do” that rewriting the code for maintaining the same functionality is the worst strategic mistake that a company can make. Indeed, this is a good chance for your competitors to stay ahead of you since you won’t be making any strategic changes or even responding to new features which the market requires. You will find many examples of software programs where they tried to rewrite and wasted millions of dollars. 

If a company hasn’t invested in its systems for a long time period, then there might not be any progressive improvement as expected. As a result, there may not be many options left for the company apart from rewriting. So, here are some considerations a company needs to look upon. Like, is the legacy codebase completely messed up and cannot be repaired? Are the legacy systems intertwined in such a manner that for simple changes also it needs a cascade of changes to other parts of the code? Due to the original technology choice, is there any difficulty for continuous improvements? Is the original technology being supported? Is the capability quickly diminishing in the company and the industry? Due to lack of your responsiveness, are the competitors taking any advantage? And, lastly, do you know the general market direction for your product or service, and is your present working ways perfect or it needs to be refreshed?

Not letting complexity to bother you. An executive might find it difficult to understand the complexity of software systems. For example, the requirement of a simple new button on a screen can seem very complex and time-consuming for the team executing it, particularly, when there exists a big complexity and legacy on the inside of the system. It is very obvious that complex systems usually become slower to change. We get to see that in organizations, the IT and business teams fall apart and do not work cordially. In order to resolve this issue, we will have to properly understand the difference between inherent complexity and accidental complexity. Well inherent complexity of a system is completely unavoidable, it has to be dealt with in order to build a software system. On the contrary, accidental complexity is faced by everyone involved in the development of a software, starting from the developer who writes the code, to the product manager who decides the priority of a feature, to the executive who takes the decisions regarding the investments. Therefore, due to all these decisions, ‘technical debt’ comes into existence. According to a 2018 survey by payments firm Stripe, it is found that on an average 40% of developers waste their time while dealing with bad code and fixing tech debt. Therefore, to tackle such a difficult situation, the organizations need to budget for improving their code quality. Technical debt payments have to be very carefully planned and implemented. The leaders need to focus on building a constant, enhancing engineering culture, and provide support to improve the understanding of exactly how the code quality enhances the capacity to build newer and better products.

Finally, ending with a Q and A session with Jay Bellissimo, a managing partner of global business services at IBM describing how intelligent workflows can harmonize people, data and machines. 

Conclusion

Legacy modernization doesn’t take place in a moment. Rather, it's a journey that will vary for every organization and might include executing technologies like cloud, cybersecurity, advanced analytics and mobility as discussed above. This entire approach helps an organization to completely transform this IT ecosystem depending on the present and future business needs and establish a strong foundation for better innovation and invention.
 

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