Business Process, Software Development, Technology Strategy

How Do You Modernize Legacy Applications? Upgrade Your Business Operations

Posted on May 24, 2024

By Kyle David

June 17, 2024

Businesses are constantly looking for ways to stay competitive and meet the ever-changing needs of their customers. One of the critical challenges they face is the modernizing legacy applications. Failing to upgrade these systems can lead to numerous issues, such as increased maintenance costs, security vulnerabilities, and inefficiencies that hinder productivity. In this article, we will explore the concept of legacy application modernization, its benefits, and provide seven effective strategies to help businesses upgrade their operations for long-term success.

What is Legacy Application Modernization?

Legacy application modernization is a transformative process that updates outdated software systems to align with current architectures, platforms, and technological advancements. The goal of modernization is to reduce risks and cut costs while boosting the application’s performance, user experience, and overall value.

Despite the proven reliability of legacy systems through years or even decades, of operation, they are not without their challenges:

  • Complex Technicalities
  • Documentation Lack
  • Skill Shortage
  • Cost Considerations

The Benefits of Modernizing Legacy Applications

Modernization isn’t just about keeping up; it’s about reinvigorating your existing applications to meet the evolving standards and demands of today’s digital landscape. For businesses aiming to maintain a competitive edge, modernizing outdated applications offers a multitude of benefits. These are:

Boosts Efficiency and Productivity

Legacy systems can transform through modernization, leading to enhanced speed and operational efficiency. This revitalization can result in quicker response times and a superior user experience, propelling your business forward.

Strengthens Compliance and Security

Modernization is a proactive step that involves not only meeting industry standards but also fortifying security protocols. This strategic move can significantly reduce the risk of security breaches and help you avoid costly compliance violations.

Increased Flexibility and Innovation

By replacing dated technology with modern, adaptable architectures, organizations gain the agility to innovate, rapidly prototype new features, and respond swiftly to customer demands.

Enhanced User Experience and Interface (UI/UX)

A key aspect of modernization is the overhaul of the user interface and experience, aiming to elevate satisfaction levels among consumers and employees alike.

Cost Savings

Modernization can lead to substantial long-term cost savings by optimizing global workforce utilization, reducing maintenance expenses, and enhancing hosting efficiency.

For example, retail businesses operating on archaic inventory management systems incur higher costs due to sluggish performance and continuous maintenance needs. Modernization streamlines these processes, cutting maintenance costs and boosting employee productivity.

Improved Collaboration and Integration

Companies like DSI have leveraged modern technologies such as Electronic Data Interchange (EDI) to modernize their legacy systems, resulting in improved supply chain transparency and collaboration.

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7 Effective Strategies to Modernize Legacy Applications

1. Rehosting

Rehosting, often referred to as “lift and shift,” involves transferring an application or a part of it to a different infrastructure. This could be a virtual, physical, cloud, or hybrid environment. The initial step typically involves eliminating some technological debt from the mainframe before moving it elsewhere.

For example, an application might be migrated from outdated physical servers to a cloud environment like AWS. Rehosting doesn’t significantly alter the application’s code, features, or attributes. It’s a quick, low-risk, and cost-effective solution that serves as a stepping stone for further modernization efforts. Therefore, it’s a popular choice for businesses looking to swiftly move their applications to the cloud or those just starting their modernization journey.

2. Encapsulation

Encapsulation aims to rewrite an application’s interface to interact with other technologies without changing the application itself. This strategy requires developers to update the existing code to modernize older applications and integrate all previously displayed data and functions. This allows the application to evolve, making it accessible as services via an API. Developers can then extend and utilize the application functionalities. However, encapsulation isn’t a viable solution for maintenance or upgrade issues; it’s only suitable for interface challenges.

3. Refactoring

Refactoring involves rearranging and optimizing an application’s internal code structure while maintaining its external functionality. For example, if a historical invoice management module is hindering the business process, you might choose to refactor it, even if the rest of your hosting platform, architecture, and features are satisfactory and don’t require an upgrade. The module’s code will improve, but its behavior will remain the same. Refactoring simplifies the code, making it easier to understand and use, which boosts developer productivity and facilitates future updates and modernization processes.

4. Replatforming

If you have an efficient system or application and wish to switch to a similar one with features that better align with your business needs, re-platforming could be the answer. This strategy is particularly beneficial if the resources required to join and set up a new platform are reasonable.

With re-platforming, developers can make minor changes to the code, but not to the features, functions, or code structure. As a result, the application performs better and is more user-friendly and cloud-compatible.

5. Rebuilding

Rebuilding involves preserving the current architecture but discarding old programs and completely redesigning or rewriting their components. This might be necessary if the application no longer receives full or partial support.

Although rebuilding is a complex and risky process, it can unlock a world of possibilities for using new platforms and technologies. It’s an opportunity to consider the benefits that clients could gain from updating old apps to gain a competitive edge.

6. Replacing

When an application’s value to your business is less than the resources required to maintain it, it’s time to replace it. This process is similar to re-platforming but more involved as it usually involves creating and integrating several interconnected, mutually dependent systems.

As you analyze your technical debt and align it with your business goals, you can assess how much the new application will differ from the old one. The most important factor is ensuring it meets the new demands and criteria, regardless of its size or feature set.

7. Rearchitecting

When a company grows to the point where its workflow processes outgrow its engineering system, the system may become outdated and require revision. If you find this to be the case at the beginning of your SMB or corporate application modernization journey, and your current application’s design can’t meet your business objectives, rearchitecting is the best course of action.

Rearchitecting involves both rebuilding and replacing the application architecture to lay the foundation for future business growth. It’s the most complex and comprehensive process, virtually eliminating technical debt.

Once you’ve completed rearchitecting, you open new avenues for your innovations and digital transformation. It’s the strategy that propels your business to new heights.


Modernizing legacy applications is crucial for businesses that want to succeed in the digital age. By embracing modernization, companies can discover new opportunities, increase their operational efficiency, and offer improved experiences to their customers. With the correct strategies and a clear plan, businesses can successfully modernize their old applications. This enables them to upgrade their operations to meet the demands of the dynamic marketplace of today.

KDG can help businesses modernize their legacy applications with our technology strategists and software development experts. We ensure that applications are not only modernized but also made flexible to grow with the business’s evolving needs. Our team prioritizes user adoption, data accuracy, and seamless integration, providing comprehensive support throughout the modernization journey. Reach out to KDG today to transform your legacy systems into powerful, agile tools that drive long-term success.

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Kyle David is the President and CEO of KDG. He has navigated the dynamic intersection of technology and business, advising both leaders and organizations, from Fortune 25 companies and professional sports leagues to innovative technology startups.

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