The Key to Delivering Successful Legacy Modernization

For many organizations, digital transformation and legacy modernization are now considered strategic imperatives. In a 2021 survey conducted by Ernst and Young, 63% of executives flagged digital transformation as a top strategic growth priority for the next three years.

Despite the momentum, many banks and financial institutions are still approaching application modernization with caution. Reservations range from the need to house sensitive data with third-party cloud providers to meeting uptime and regulatory requirements. Many executives are also concerned with the potential for business disruption when modernizing business-critical legacy applications.

However, financial executives are well aware that delaying application modernization may be placing them at a competitive disadvantage. Business leaders are looking for ways to gain the benefits of modernizing their legacy apps while minimizing the risks (and costs) to their organizations. In response, many of these executives are embracing proven migration methodologies with demonstrated track records of success.

The Hidden Costs of Delaying Legacy Modernization

Many financial executives ask, “if it isn’t broken, do we really need to fix it?’ While many legacy applications may be performing adequately, there are several downsides to preserving the status quo. These include:

  • You’re paying too much. Rising licensing and maintenance costs may be consuming money and resources that could be diverted to digital transformation or other strategic initiatives.
  • You’re sinking capital into aging platforms. Similarly, you may be using capital for new software or hardware needed to keep your legacy platforms operational.
  • You’re tying up people and resources. Older platforms and custom applications often require extensive in-house support.
  • Cannot scale to address disruptions or new business opportunities.  Financial organizations need to quickly develop, roll out, and scale new applications and systems. This can be difficult, even impossible, with legacy applications and infrastructure.
  • Inability to collaborate or merge with other organizations. Legacy systems may not integrate with those of other companies and business partners.
  • Security issues. Outdated software and expired support create security gaps that hackers and cybercriminals can exploit.
  • Limited analytics capabilities hinder decision-making. Legacy systems have a limited ability to collect and analyze data necessary to enable timely decisions.

AIM — a Proven Methodology for Application Modernization

Manually migrating applications code to a new language or environment is resource-intensive and subject to human error. At Updraft, we use our fully automated digital transformation solutions to modernize and re-platform your applications while preserving their functionality. Employing full automation delivers faster applications transformation while reducing costs and risks.

Central to Updraft’s modernization methodology is our Analyze, Improve, and Migrate (AIM) framework. AIM combines our innovative automation tools with proven best practices to quickly and efficiently transform legacy applications. With AIM, each step is customized to align with your modernization goals and priorities.

Here are the three components of AIM:

Analyze. Developing a clear understanding of both the source code and the business purposes of an application is a critical first step in the modernization process. Differentiating between business logic and low-level technical details will help create a more functional, modernized application.

It’s also important to identify key features in the legacy application code that must be replaced or enhanced in the new version. Finally, understanding the legacy application’s dependencies (e.g., external data or processing resources) ensures the updated application interacts properly with external systems.

Improve. Making improvements to applications during the modernization process ensures they function optimally in their new environment. These improvements include replacing inefficient algorithms, removing unused or redundant code, adapting the new code to current coding standards, and rearchitecting the code for scalability and resilience.

Migrate. The final step involves migrating the code to the new target language and execution environment. The new code will use the chosen databases, user-interface frameworks, logging standards, third-party applications, etc. The transformed code is native to the target platform (e.g., Java), does not rely on runtime libraries or emulation, and has no associated licensing fees.

Delivering the Benefits of Applications Modernization With AIM

Reaping the Benefits of Applications Transformation

While modernizing legacy applications is a major undertaking for most banks and financial institutions, the rewards can be significant.

These benefits include:

Capital preservation. Organizations can reduce capital expenses by migrating legacy, premises-based applications to OPEX-based cloud consumption models.

Reduced complexity. Application modernization can create efficiencies by consolidating computing resources and streamlining processes.

Faster time to market. Modernized, cloud-based applications can be updated and deployed more quickly than their premises-based counterparts. Companies looking for a ‘first mover’ advantage in the market can often take an application live in weeks, not months.

Ability to scale and right-size. Once modernized and deployed in the cloud, applications can be easily scaled up or down to accommodate new business initiatives, seasonal requirements, or organizational changes.

Reduced risk. Aging legacy applications present significant risks, including a lack of available development resources and limited on-staff expertise. Updated applications are designed to be more efficient and better-supported.

Improved security. Modernized cloud-based applications are typically more secure than legacy premises-based systems. Using the cloud secures data offsite and limits access to approved employees and third parties. Cloud providers also invest heavily in security technology, highly trained staff, and rigorous processes and audits.

Future-ready. Modernized applications can utilize emerging technologies like automation, analytics, and machine learning to provide greater insights and improved user and customer experiences.

Find out how Updraft’s automated AIM application modernization methodology minimizes risk in your digital transformation. Contact us today.