Legacy software modernization: 4 barriers and 4 strategies

CIOs today consider modernizing legacy software a top IT investment. With a comprehensive enterprise modernization plan, companies can adapt to evolving technology and changing customer expectations while increasing operational efficiency and providing robust security. What’s more, many aging systems have become a ticking time bomb of high maintenance and update costs because years of modifications and workarounds have made these systems increasingly brittle.

However, many IT leaders view the modernization of legacy applications as a daunting task—and even an “impossible project.”

It’s easy to see why. High costs, long timelines, and unpredictability make modernization feel too risky for many to take on. As a result, most modernization projects never get off the ground. Let’s explore the challenges holding many IT leaders back from advancing modernization initiatives and the strategies and tools you can use to overcome them.

Why does legacy software modernization seem so daunting?

Just thinking about tackling the task of modernizing mission-critical legacy systems can give a CIO a headache. The approach that’s top of mind—ripping out and replacing the applications with a modern alternative—has serious drawbacks. We’ve had the opportunity to speak with many CIOs and tech leaders about their thoughts on these rip-and-replace projects–and these four barriers come up time and again.

1. Time

It can take a year or longer to replace a legacy system from scratch. Most companies can’t afford a process that lasts that long. Digital business is about instant gratification and agility. It needs support as soon as possible, not months and months down the road.

2. Cost

Each phase in a rip-and-replace initiative has specific costs associated with it. In addition, any new enterprise system will require a heavy investment in implementation, infrastructure, licensing, training, and more.

3. Unpredictability

Migration can be an unpredictable endeavor. Timelines, costs, and security concerns often remain in constant flux. In addition, a constantly evolving operational environment means there’s no guarantee that the new system will be able to handle the future needs of the organization. The whole process could repeat itself a few years down the road.

4. Risks

Any modernization strategy involves a certain amount of risk, but a rip-and-replace approach can raise the stakes considerably. Downtime during the transition between one highly complex monolithic system and another is significant and difficult to anticipate, for example. Transitioning to unfamiliar software and infrastructure with entirely new configuration requirements can affect security, and moving from one data structure to another could result in data loss or corruption.

Here’s something even riskier than modernizing, however–failing to do so. The longer you put it off, the more technical debt, security vulnerabilities, and downtime you’re likely to accrue.

What if you want to avoid the risks of not modernizing legacy applications?

And what if you can’t afford to rip and replace? There’s really only one answer to that. You create your own optimized and adaptable suite of applications. Four trends in application development are making this form of legacy modernization easier and offering light at the end of the modernization tunnel.

1. Cloud migration and cloud-native development

Migrating legacy applications to the cloud provides scalability and other benefits, but you’re still left with the same old systems. The real path to modernization is on the cloud–from managed infrastructure to cloud-native development using microservices, containerization, container orchestration (Kubernetes), and more. This requires a large investment in developer talent and expertise.

2. DevOps

DevOps speeds the delivery of higher quality software by automating and integrating the efforts of development and IT operations teams to reduce risk and improve quality. While more efficient than traditional development, DevOps is still a lengthy and painstaking process slowed by manual coding.

3. Artificial intelligence (AI)

By automating data migration, code analysis, testing, and performance modernization, AI-driven tools can streamline the modernization process, reduce manual effort, and enhance accuracy. It’s important to note, however, that AI tools need guardrails and governance to work effectively and safely.

4. Low-code development

Low-code development speeds the process of building applications that modernize your legacy software because of its simple drag-and-drop design and its one-click deployment. What’s more, low-code also offers a phased and modular approach to legacy application modernization, enforcing best practices and governance—which in turn decreases risk and disruption.

All this is only possible, however, with a low-code development platform that enables cloud-native development, DevOps practices, and AI-powered automation of the entire development lifecycle.

For example, KPMG, OutSystems, and Rhino.ai have designed a starter solution to help you to modernize legacy systems fast without disrupting current processes while reducing costs and complexity, through AI-assisted development without disrupting current processes. The result? Solutions that can scale on any timeline, deliver immediate business value, and highlight practical GenAI use cases–all with the talent you already have. Learn more about this KPMG, Rhino.ai, and OutSystems solution and how to get started.

How can OutSystems low-code help with legacy modernization?

The OutSystems low-code platform makes it faster and easier to build robust, complex enterprise applications that fit into three primary modernization strategies for your legacy software systems. You can extend core systems by enhancing them with new interfaces and capabilities. You can refactor individual application components to create a flexible foundation for innovation. Or you can rebuild legacy applications that connect to and access existing data, ensuring a smooth transition to more advanced, efficient systems.

It is ideal for any of these strategies because it offers:

• Effortless integration: Intuitive tools and support for integration provide a smooth transition from old systems to new ones.
• Risk mitigation: Comprehensive governance and automated testing capabilities to prevent and detect potential risks before they reach production.
• Modular design: Phased application rollouts help minimize operational disruptions during the critical transition period so you can grow your portfolio incrementally.
• Integrated lifecycle management: A continuous integration and continuous delivery pipeline pushes updates to respond to market needs without technical debt.
• Reusable code: The ability to add traditional code to applications and even use it to create reusable modules ensures that no valuable dev work is lost in modernization.

Modernization success stories: Making the impossible possible with low-code

Legacy application modernization with low-code isn’t just theoretical. It’s a proven strategy. Here are four OutSystems customers who have discovered the power of low-code development for modernization.

The U.S. Department of Defense modernizes software in 6 months

The U.S. Army needed to ramp up the digitalization and modernization of its Exceptional Family Member Program. So, the U.S. Department of Defense turned to BAM Technologies, a veteran-owned software development company, for help. BAM used OutSystems to deliver the new software in six months instead of multiple years. Code reuse and rapid low-code development not only sped up application delivery significantly, but also continued to save months of developer time and hundreds of thousands of dollars. Now families in the Army have the support they deserve.

BCX Builds ERP System 5x faster and gains business agility advantage

ICT solutions provider BCX used OutSystems to build a crucial inventory tracking solution in one weekend. The system eliminated inventory and billing black holes with significant cost savings. As a result, BCX extended its OutSystems landscape, including mobile apps and a complete ERP and workflow solution that the entire company runs on.

Tysers moves from paper to an app–and resolves queries 60% faster

Leading Lloyds of London insurance broker Tysers replaced paper-based processes with Tconnect, an application developed with OutSystems in just four months. Tconnect positions the company for scalable growth with digital efficiency and standardized processes that span multiple specialty insurance lines—saving the company 400 hours per week and resulting in a 60% faster customer query resolution.

Banco Santander Consumer Portugal builds 14 apps to replace core systems

To power its ambitious digital transformation program, Banco Santander Consumer Portugal selected OutSystems to help it modernize its systems. In three years, the bank replaced 70% of its core systems with 14 new applications, including consumer credit, personal loans, ecommerce, and portals for durables and used car dealers.

Advancing your digital transformation with legacy modernization

Legacy system modernization is a critical step in any organization’s digital transformation journey. Low-code application development provides an ideal opportunity to overcome the immense challenges of the traditional “rip and replace” strategy with an incremental platform approach that is far less risky and disruptive while being more flexible and future-ready.

OutSystems lets you ship more modern apps faster to transform your legacy systems into today’s cloud-native microservices architecture. It's the AI-powered low-code platform for the complex, mission-critical apps that matter most to your business.

Learn more about modernizing legacy systems with OutSystems and the legacy modernization starter solution from KPMG, Rhino.ai, and OutSystems.