Software modernisation: Everything you need to know

Our six-part series of articles covers all important aspects of software modernisation.  This introductory article provides an overview of the most important topics that will be explored in more detail and further developed in the following five articles. An overview of the topics is provided at the end of this article.

Software modernisation describes the process of replacing legacy software or IT infrastructures with the latest technologies and architectures. The aim of modernisation is to future-proof the software, improve its performance and security and ensure it can be maintained and upgraded. Software modernisation enables companies to adapt their IT infrastructure to modern business requirements and therefore prevent the creation of a legacy system with limited flexibility and performance.

Generally speaking, modernisation should not be viewed as a finite project, but as an ongoing analysis of the software and surrounding components: permanent maintenance, upkeep and renewal ensures that an up-to-date system will not develop into a legacy system.

1. Why software modernisation is relevant for all companies

Because software systems play a pivotal role in business processes in practically all organisations and companies, their maintenance, upkeep and modernisation is critically important. Maintaining the systems is one of the key tasks in the value chain to remain competitive and avoid the risks of legacy systems. If a system is not regularly maintained and updated, there is a risk of it becoming a legacy system.

Legacy systems are IT systems that are based on outdated technologies and software solutions and that have been in use for many years. They are often deeply integrated into a company’s business processes, are critically important for business and therefore difficult to replace or modernise. This limits efficiency and agility, increases operating costs and maintenance requirements and poses security risks.

A typical feature of legacy systems is that they often no longer meet current requirements in terms of scalability, security and maintainability, because they were developed at a time when the technological standards and requirements for IT systems were completely different than they are today. Rather than undertaking massive software modernisation projects, we believe that ongoing investment in maintainability is essential. The cumulative scale of these investments is usually smaller than large projects and is guaranteed to be less risky.

2. The most important reasons to modernise software

In an increasingly digital and competitive business world, companies need to be flexible and able to respond quickly to change. Legacy systems hinder such flexibility and frustrate the introduction of new and innovative business models and technologies. Modernising these systems is an important step for companies to ensure their long-term competitiveness and efficiency and be able to adapt to changing market requirements.

Technical debt

Technical debt arises when software developers are forced to implement suboptimal solutions due to time or budget constraints, resulting in the long term in higher maintenance costs and difficulties with ongoing development. If such burdens are not resolved, they accumulate over time and make the system increasingly difficult to maintain. In a legacy system, technical debt can take the form of outdated code, architectures that no longer meet requirements, lack of documentation or dependencies on obsolete technologies. Cleaning up and optimising the code early on helps to mitigate or prevent such debt, making it easier to maintain and optimise the code and improving the overall quality of the system.

Software modernisation is an ongoing process that keeps the entire software system flexible and efficient. In practically all organisations, software systems are key to implementing business processes efficiently and productively, in other words for performing the essential tasks in the value chain. To remain competitive and to be able to respond to changes in the market, the software system must remain up to date so that the company can continue to operate successfully.

Efficiency and maintainability

Poor maintainability is a sign that software is obsolete or has significant technical debt and that the system is lacking clearly-defined, modular structures. Maintainability can also be restricted because of the difficulty of finding developers who are familiar with the legacy technologies. The efficiency of the system suffers because obsolete software is generally slower and more resource-intensive than modern alternatives, which allow the system to be adapted more quickly. In addition, modernising the software improves maintainability by cleaning up and upgrading the code. This can lead to lower operating costs and faster responsiveness, should this be one of the goals of software modernisation.

Security

Legacy systems often pose an enormous security risk because they no longer meet the latest security standards and may not be regularly patched or updated. These systems are more vulnerable to cyberattacks because they have known vulnerabilities that can be exploited by attackers. Moreover, they are often not compatible with modern security solutions, which makes it more difficult to integrate them into a comprehensive security strategy. Modern attacks and known security vulnerabilities need to be tackled quickly.

By modernising software, security vulnerabilities can be resolved and the system can be brought up to the latest security standard. Ideally, the relevant business processes are located at the heart of the software – decoupled from technical components on the periphery. As a result, adjustments can be integrated more flexibly later on without parts of the core software having to be rewritten.

Flexibility, agility and cost efficiency

In today’s business world, it is critical for companies to be able to respond quickly to market changes and new customer requirements. Legacy systems are often rigid and difficult to adapt to new conditions, thus limiting a company’s overall flexibility and agility. Legacy systems can also be very expensive to maintain, especially in the case of specialised hardware that is expensive to run and requires specific expertise.

If a system is modernised early and continually, this can help to spread and possibly even reduce these costs, since technologies are more efficient and thus good maintainability and flexibility of the system is ensured. Not only are the hardware and software more efficient as a result, but also the business processes supported by the software. If processes are changed in the company, the software has to be adapted accordingly. By modernising its software, a company creates the technological basis for quickly adapting to new market conditions, consequently making it more agile and more responsive.

Legal requirements

Data protection laws, compliance guidelines or regulatory requirements can change at any time, thus requiring systems to be adapted. One example of this is the Cyber Resilience Act, which requires companies to ensure that their IT systems meet certain security standards. Legacy systems often struggle or fail to meet these requirements, which can lead to legal and financial risks. Modernisation ensures that systems can be adapted to the latest regulatory requirements and that the company therefore minimises legal risks.

3. The advantages and opportunities offered by software modernisation

Scalability: Systems are designed to scale as business demands grow. Modern architectures offer the flexibility to scale IT resources as needed.

Innovation potential: A modern, flexible software system is needed to support digitalised and automated processes. It also enables the introduction of modern technologies such as cloud computing, artificial intelligence or the Internet of Things (IoT), allowing companies to develop new business models and remain competitive.

Quality: By introducing modern development practises and architectures, companies can significantly increase the quality of their software and thus create the basis for enabling ongoing changes.

UX design: Modernisation allows companies to improve the usability of their software and meet the changing needs of the market. While obsolete systems hinder the introduction of new functions, modernised software allows new development practices to be introduced so that new features and updates can be made available faster and more reliably. This in turn reduces the time-to-market.

4. Risks and challenges of modernisation

If software systems are not regularly maintained, optimised and modernised, a company runs the risk of one day being left with a legacy system. Preventing a legacy system is essential for a company to remain competitive. Yet the task of integrating new technologies into existing systems can be very complex technically. Old and new components often have to work together seamlessly, which can pose a challenge in terms of both compatibility and security.

Similarly, considerable financial and human resources may have to be deployed if optimisations and modernisations are delayed too long. Careful planning is just as important as early modernisation – not least because it can often be difficult to find available specialists for obsolete technologies. As with any migration in a company, careful change management is essential for the success of the modernisation project. Technology is just one aspect of modernisation. The processes involved and the working methods of the people who contribute to its creation are also impacted. Resistance to change can occur, in particular, when employees cling on to old systems and ways of working. Fears and cultural barriers can be overcome through communication, training and awareness. After all, the new processes and systems are dependent on the knowledge of the employees so that the business can be sustained.

5. Conclusion

Software modernisation offers companies the opportunity to increase scalability, grow innovation potential, improve quality and create a user experience that works for the target group in order to remain competitive and be successful in the market. At the same time, however, risks and challenges also need to be overcome such as technical complexity, high costs and management of change processes. Careful planning and a structured approach are therefore critical in order to successfully modernise software and benefit from the resulting advantages in the long term.

Software modernisation affects every company. An efficient and flexible software system is an essential element of the value chain. Such projects should not be put off for fear of the effort and costs involved. That’s because the earlier software modernisation is tackled, the less technical debt arises and therefore the more efficient the systems remain. Ideally, modernisation should be viewed as an ongoing priority, with code being optimised, updated and cleaned every time the software is changed.

Further articles on software modernisation in the bbv blog:

• Blog #1: Software modernisation: Everything you need to know?
• Blog #2: Software Modernisation Canvas: Structured for success
• Blog #3: Strategies for successful software modernisation
• Blog #4: The five most important factors for successful software modernisation
• Blog #5: The future of legacy systems: from modernisation to evolvability
• Blog #6: Artificial intelligence in software modernisation