7 legacy software modernization strategies. Which one to choose, what will be its costs and potential benefits 

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In one of our previous articles, devoted to modernizing legacy software in companies, we focused on presenting the scale of losses incurred by companies using outdated software and the benefits of adapting systems to current standards. 

We also emphasized the key importance of choosing the right legacy software modernization strategy for the success of the entire initiative and achieving the assumed business goals. 

In this article, we will characterize each of the available modernization options in more detail, we will analyze their costs, ease of use and the scale of potential benefits.  

What strategies are available for modernizing your company’s systems?

core legacy system modernization strategies

Once the decision is made to start upgrading your company’s software to current standards, it will be crucial to choose the best modernization strategy for each of the systems. 

Currently, there are 7 main approaches to software modernization, differing in terms of complexity and the impact each of them has on the final functionality, security and system architecture: 

  • encapsulation,
  • rehosting,
  • replatforming,
  • refactoring,
  • rearchitecting,
  • rebuilding,
  • replacing.

The selection of the most optimal strategy should take place as part of a systematic software modernization process, based on the collected and analyzed information about the current state of the operating systems. 

What should the process of modernizing legacy systems in the company look like?

steps in legacy system modernization

The process of modernizing legacy software in the company consists of the following stages:

1. Comprehensive analysis of the systems used in the company and assigning them to specific groups – legacy systems, intermediate systems and modern software. Each group requires different actions:

a. legacy systems – they require modernization as soon as possible, regardless of their age,

b. intermediate systems – these are tools that should be modernized, but it is not a priority,

c. modern systems – they do not need to be modernized at the moment, but they should be monitored and covered by the software development and maintenance plan.

2. Assessment of each system requiring modernization to determine which update strategy would be most beneficial, taking into account both the business aspect and the perspective of the IT department. It is also important at this stage to define specific, measurable goals that we want to achieve by modernizing legacy systems.

3. Selection of the most optimal methods of modernization of individual systems.

4. Development of a roadmap for the modernization of all systems, including the key steps necessary to achieve the assumed results.

5. Scheduling and periodically re-analyzing the condition of systems to react early enough when software that does not require prior modification ceases to meet current standards.

As you can see, before we decide on a specific strategy, it will be crucial to identify the problems and determine the goals that we want to achieve by modernizing the systems. 

Analysis of the current state of systems as a starting point for modernization

Before you start modernizing the systems in your company, you should analyze what you actually have, which software needs improvement and to what extent. Thanks to this, you will be able to properly plan the entire process and choose the modernization strategy for each system that will bring the best results. 

It is worth starting the analysis by asking yourself a few general questions: 

1. What is the value of the current system to the company? 

2. What is the system missing?

3. How do users interact with the current system? Which features are used most/least often?

4. What issues are reported? Are they related to low performance, errors, data access problems, difficult navigation through the system or its high complexity?

5. Which system functions are crucial for the daily functioning of the company, and which are less important?

6. What really works well and should not be changed? 

Detailed definition of current problems, both technological and business, allows you to clearly define where there is room for improvement. 

For each of the systems, there will be certain areas to focus on, such as system performance, user experience issues, programmig languages, and tools used (where lack of skills and support is a common issue). 

Knowing the type and scale of problems, it will be possible to move on to the next stage – defining the goals to be achieved thanks to the modernization of each of the legacy systems in your company. 

Setting measurable goals for system modernization 

Success in implementing changes, both small and large, requires a clear definition of the current state of your software and setting realistic, precise and measurable goals. 

Determining whether the selected modernization strategy brings results should be based on measurable KPIs, allowing to analyze the progress of works and make improvements when necessary. 

It is worth remembering that the process of modernizing legacy systems takes place in stages, so you should plan in advance what you want to achieve in each phase, taking into account technical requirements and business needs. 

When setting realistic and measurable goals you can focus on different areas, such as: 

  • process reliability,
  • security management in order to avoid external threats,
  • efficiency,
  • consumer satisfaction,
  • number of customers using the product,
  • navigation and intuitiveness.

Knowing what problem we are trying to solve, where its source lies (technology, architecture or specific system functionalities) and knowing the goals we want to achieve, we can proceed to choose the best strategy for modernizing legacy systems in the company. 

Which legacy modernization strategy is right for your business?

Each of the available approaches to modernizing legacy systems has different costs, effort, technical requirements, and business impact. 

A detailed analysis of needs carried out earlier and the definition of goals are the starting point for choosing this modernization strategy that will allow you to achieve the planned results while maintaining the optimal level of costs. 

cost and impact of legacy system modernization

1. Encapsulation 

This is the minimum approach, consisting in isolating specific data or functions of the legacy system and making them available to users in another tool, e.g. through an API interface. 

Daily work then takes place without logging into outdated software, using a modern interface, which affects the comfort of users. 

Encapsulation can be a short-term solution that improves User Experience by enabling quick and effective use of legacy system data and functions. 

Among the advantages of encapsulation, the relatively low cost of using this solution and the low risk are most often mentioned. 

The main disadvantage of this approach is the fact that the costs incurred so far, related to the maintenance of the old system do not change, because no modifications have been made to the software itself and it is necessary to maintain its stability, as has been the case so far. 

This approach is sometimes used when a company plans to implement new software that will partly use data or functions of the legacy system, but no expenditure is planned to modernize the old system to integrate it with the new one. 

2. Rehosting 

In case where the problem you have to deal with is the cost of maintaining your own server infrastructure and ensuring data security, and the system itself does not require significant modernization, software re-hosting may be the solution. 

It is a transfer of the system to another server, with full freedom of choice, whether it will be a physical, virtual or cloud infrastructure. 

This approach allows you to continue using the system’s functionality and access to all data, while increasing efficiency and improving security. 

Re-hosting, also referred to as a “lift and shift” approach to migration, extends the life of legacy code by moving existing business logic and data to modern platforms. As a result, business processes are carried out without interruptions, and the costs of maintaining the legacy system decrease, thanks to its transfer from old hardware to modern hosting solutions. 

However, it must be taken into account that re-hosting does not provide such a significant increase in efficiency and cost reduction as the actual modernization of the system. 

3. Replatforming 

This approach means migrating the system from the old environment to a modern platform with minimal changes to the software source code. 

In general, the system code is modified so that it can be easily integrated into a new environment, often cloud-based. 

This results in increasing the stability and reliability of the software and improving the comfort of its use, but the structure of the code, and thus the functions of the system, largely remain unchanged. 

This solution is applicable only to systems whose architecture allows for a relatively trouble-free transfer to a new platform. 

In other cases, a different approach may be required, often involving much more extensive modifications. 

4. Refactoring 

In the case of this approach, software modernization is done by rebuilding and optimizing the source code, but without interfering with the external behavior of the system. 

A characteristic for code refactoring of legacy systems is making small-step modifications by introducing small changes that are easy to control and test, which can then be very quickly integrated with the original code. 

This approach is cheaper to use than a full reconstruction of the system, as it allows you to refactor the code of only selected segments of the software, when the problem occurs only in them, and not in the entire tool. 

System maintenance costs are also reduced, as two separate code bases do not have to be created during the work. 

However, it is worth remembering that refactoring requires different skills than creating software from scratch, which may increase the cost of building the right team of programmers. You should also take into account additional expenses related to the need to conduct more tests to ensure stable operation of rebuilt code fragments as part of the entire system. 

5. Rearchitecting 

This strategy focuses on optimizing the system architecture with code rewrites to increase performance and facilitate the introduction of new features. 

Most often, software modernization in this approach consists in breaking the previously functioning, complex monolith into microservices. Microservices-based solutions offer greater flexibility and less risk because developers can implement new features, perform updates, or make changes without affecting the entire system. 

Changing the architecture can be the optimal solution in many cases, ensuring a good return on investment and long-term savings. 

However, this is a time-consuming process, requiring a significant expansion of the internal team of programmers or hiring an experienced software house that will be able to comprehensively carry out all the work for your company.  

Often the involvement of an external partner is the best solution, as rearchitecting requires many different skills, difficult to gather in an internal team due to the costs. 

6. Rebuilding 

If you have decided to continue using the system and other modernization strategies are not optimal for your company, you can also decide to completely rebuild the software. 

This strategy involves a gradual redesign or rewrite of the code from scratch, starting with the most critical functions of the software. Taking into account the resources needed to build many elements of the system practically from scratch, this is the most expensive and time-consuming way of modernization. 

In some cases, rebuilding the system from scratch may be justified, however, as it allows you to maintain the original functionalities and collected data, while introducing significant improvements and all the benefits of creating dedicated software. 

It may also happen that some of the system components will still be usable without the need for a complete rebuild, which will reduce the costs associated with the project. 

7. Replacing 

In case is none of your company’s legacy system modernization strategies are viable, the final solution may be to phase out outdated software and replace it with a modern and efficient system. 


Choosing the right approach to software modernization in your company requires a lot of experience. It is not only about determining how long it will take to introduce changes depending on the selected strategy, but above all, the ability to choose a solution that will allow you to achieve the assumed goals and ensure continued, efficient functioning of the system. 

Modernizing the legacy system or even implementing a completely new software does not relieve you of the need to plan its further maintenance, fixing errors and conscious development. 

In order to avoid the situation that the company is currently facing, it is also necessary to ensure accurate documentation. In addition to developing documentation for future developers, it may also be required to create guides and/or training programs for new users. Finally, to ensure that a routine system upgrade doesn’t waste your money, keep in mind that constant updates are essential. 

To achieve this, the best solution is to engage an experienced partner, a software house that, like SOFTIQ, has carried out many successful legacy systems modernization projects in companies of various sizes and specifications. 

If you are wondering how we can support you in your software modernization project, we encourage you to contact one of our consultants who will help you evaluate it. 

SOFTIQ offer for legacy systems modernization

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