Blog: Legacy Modernization Trends to Watch in 2020

Here is everything you need to know about legacy modernization:

• What is a Legacy Application? 
• Why are Legacy Applications a Problem? 
• What is Legacy Application Modernization? 
• Legacy Application Modernization Trends to Watch
• How to Modernize Legacy Applications
• Bridging the Gap Between Legacy Systems & Modern Integration Solutions

What is a Legacy Application? 

In computing, a legacy application is an outdated or obsolete software program that is still in use.

Why are Legacy Applications a Problem? 

Legacy applications can block or slow down an organization’s ability to grow, shift, and adapt in the face of changing market dynamics. Here are 4 common problems with using legacy applications:

1) Inability to Integrate 

Oftentimes, the older technology of legacy applications will not allow them to interact or integrate with new systems. Although the application still meets the needs it was originally designed for, it will not scale as the business grows.

2) Lack of Security

Lacking regular maintenance, legacy applications with vulnerabilities will not see the updates and patches necessary to stay secure in the modern world. Poor data security presents a risk to every organization no matter the industry.

3) Expensive Maintenance

If a legacy application runs exclusively on antiquated hardware, the cost of using the application may eventually outweigh the cost of replacing both the software and hardware in favor of a new application that can be hosted in the cloud

4) Lack of Insights and Information

With legacy applications, data becomes stuck in silos leaving each business team isolated from the business insights that are created from having a fully integrated solution.

Look no further than this post for 5 reasons to update your legacy system. 

What is Legacy Application Modernization? 

Legacy application modernization is the process of replacing an outdated or obsolete legacy application with a modern application that can better support your business goals or processes.

An example of legacy application modernization would be moving a legacy application to the cloud from an on-premise data center. The cloud offers a less difficult environment for organizations to work with and maintain. Operating costs are significantly reduced because an organization can only pay for the resources it uses and no longer has to conduct maintenance on the physical infrastructure of the formerly on-premise data center. 

To understand the future of legacy application modernization, the integration software market offers compelling reasons for the need to update business solutions. 

Legacy Application Modernization Trends to Watch

Companies are facing all kinds of pressure, both internally and externally. This has been especially true throughout the COVID-19 crisis. Businesses have lost revenue rapidly, as supply chain disruptions wreak havoc on businesses everywhere.

It doesn’t matter what industry a business is in, whether it’s logistics, wholesale, or manufacturing, it’s clear that companies are losing patience with the complexities and negative business impact of legacy integration solutions. As an example – not only are valuable orders all too often lost due to an integration snafu, but almost half of IT professionals say that it takes a month or longer to onboard a new trading partner.

Here are 4 major themes of legacy applications in 2022:

1. Legacy applications are hindering growth

2. The demand for new technologies is growing

3. Onboarding is more critical than ever 

4. Poor integration is costly

In 2022, there was a compelling sense of urgency to solve integration challenges once and for all. Companies now not only recognize the shortcomings of existing integration offerings, but they also want better solutions and are taking action, driving market demand for more sophisticated integration platforms in the process.

Cleo’s Ecosystem and Application Integration report explores integration strategy through the “outside-in” lens of ecosystem integration and touches on the role new and emerging integration technologies play in solving the most common applications and data issues challenging the modern enterprise. The report shows legacy modernization trends, legacy application trends, and most of all, how to modernize legacy applications.

Key Findings / Integration Challenges

While there are a number of different legacy modernization trends and strategies that companies can set in place within their enterprise, in order to successfully gain enterprise application modernization, it takes a dedicated effort. Enterprises must embrace modern integration technology and evolve past outdated and manual order processing and shift towards IT process automation across the board.

98% Expect to Gain Value from Ecosystem Integration

Ecosystem integration isn’t simply some buzzword; it’s an entirely new way of thinking for enterprises, regardless of the industry. An integration platform allows the company to ditch its legacy software and evolve via modern technology to better serve its customers and trading partners.

80% Identified Integration Automation as Their Top Objective

A vast majority of those surveyed see automating their myriad integration processes as a clear route to value creation via integration solutions.

63% Say Legacy Applications are Their Biggest Integration Challenge

Legacy technologies and implementations were the biggest recurring issue that IT professions are having. Relying on outdated technology means you aren’t putting your business in the most effective way to navigate a potential supply chain disruption.

46% Say it Takes More Than One Month to Onboard a Trading Partner

It isn’t that taking over an entire month to onboard a new trading partner is too long, it’s unacceptable. Companies need a modern technology that allows a trading partner to get up in running in days or even just a couple of hours.

Top 5 Reasons for Optimism

Reason #1 – Integration Professionals Know What Capabilities They Want

It isn’t surprising to learn that integration professionals know exactly what kind of features they expect from a technology platform. They recognize the importance of ecosystem integration technology and all the benefits that come with it, including onboarding trading partners quickly.

Reason #2 - Better End-to-End Visibility Across Processes is a Necessity

Whether we are talking about order-to-cash, procure-to-pay, or load-tender-to-invoice, enterprises must maintain a high level of visibility through the lifecycle of a business process. Having reliable end-to-end visibility provides a clear view of transactions between an organization's environment and those of its partners, suppliers, and customers.

Reason #3 - Flexible Architecture and Automated Processes Also Offer Best Routes to Value 

Companies need flexibility. They must be able to adjust on the fly, and evolve to better serve their customers’ needs. Automated IT processes show a clear path to success by eliminating those time consuming manual tasks that so many employees waste time and money on.

Reason #4 - Ecosystem Integration Approach is Highly Beneficial

We showed you the stat towards the top of this blog that 98% expect to see value from ecosystem integration. The benefits are clear, from increasing speed and flexibility to accelerate the onboarding process.

Reason #5 – The Urgency for Ecosystem Integration is Real

Because companies are aware of the benefits that come from ecosystem integration, they also recognize at the same time that they cannot afford to delay modernizing their legacy environment. As we approach the halfway point of 2022, companies must utilize integration technology to best serve their customers, suppliers, and trading partners.

How to Modernize Legacy Applications

As you consider how to modernize legacy applications, it is useful, to begin with, the end in mind.

What is the justification for replacing your legacy application?

To find the compelling reason for a modernization effort, an enterprise needs to have a complete understanding of the legacy applications. And to gain that understanding, there are five questions that an enterprise must ask itself:

1) Are you able to accept and process multiple data formats from all internal applications and partner systems?

2) Do you need to customize integrations to connect to new applications and trading partners?

3) Are you able to expeditiously handle increased volumes of data from new applications and trading partners?

4) Are you able to identify data processing errors and resolve them quickly?

5) How much investment is tied to supporting legacy applications, such as chargebacks, development expenses, and maintenance costs?

If any of the answers above are unsatisfactory, you have a valid reason for examining migration from legacy systems to the cloud. 

Now, as you create your legacy modernization approach, it’s important to evaluate any downstream effects that may arise from the implementation of the new, modernized application. Only then can businesses effectively evaluate the project and business needs, and layout the goals, timeline, and overall vision for the modernization initiative.

Once these downstream effects are fully understood and the migration roadmap becomes clear, organizations can dedicate time and resources to other important steps of modernizing legacy applications. Here are some additional best practices:

1) Develop new processes that fit your company’s current and desired future business patterns and culture

2) Design and orchestrate workflows to seamlessly integrate with applications and maximize resources

3) Define benchmarks for agility and the ability to integrate

4) Consult with partners and thoroughly scope the extent of ecosystem integration map development

5) Go through various development iterations and testing cycles to ensure a successful go-live

Bridging the Gap Between Legacy Systems & Modern Integration Solutions

Enterprises have admittedly grown frustrated with just how complex and unnecessarily costly outdated integration technology is. Out of this frustration, a groundswell of optimism is emerging that is driving demand for change. At the root of it all, is the cloud.

Today’s enterprises are starting to put their ecosystems first and have revealed intentions to invest more strategically in integration technology platforms that support ecosystem integration as a means to sustainable, long-term value creation.

Cleo’s Ecosystem and Application Integration Report includes all of these stats (in more detail) as well as other interesting figures that truly show just how valuable modern integration technology can be. Don’t hesitate, download the report now and modernize those outdated business processes.

Download the free report