Upgrading Legacy Systems? A Development Partner Is the Best Option

But they can also stifle in-house innovation in big organizations, says Roberto Torres, editor at CIO Dive. He points to a Stepsize report that finds 60 percent of engineers believe it can “slow their pace of development, and the average engineer dedicates six hours a week to dealing with technical debt.”

Quick updates and one-off projects are often the preferred methods for dealing with legacy code, as they avoid the disruption and expense that come with full transformations. But one-off projects rarely deliver a long-term solution.

Instead, organizations that are serious about resigning legacy systems and their issues to the history books should look for a long-term partnership with a reliable development team.

The Problem With a One-Off Fix

While a one-time project to upgrade a legacy system may seem like the quickest and most cost-effective solution at first, several hidden costs must be considered.

Short-term fixes like a lift and shift can actually drive up costs, McKinsey’s Will Forrest, et al write. “In contrast, companies that have built new systems in the cloud or remediated existing applications to leverage cloud attributes are seeing dramatic efficiency improvements.”

The benefits of the cloud are significant, but it requires a clear strategy to obtain them. “For example, organizations that simply ‘lift and shift’ applications to the cloud with no change to architecture miss out on key benefits, such as autoscaling and automated performance management,” Forrest, et al. write.

“Moreover, success requires a cloud-ready business-technology operating model built around a product life cycle, which improves developer productivity, thereby accelerating product development.”

Inefficient processes also get ignored in a lift and shift, says Prabhjot Singh, founder and CEO of Pyze. “Legacy systems evolve over years and generally implement poor processes with inefficient workflows,” Singh writes. “The new system yields the same business performance as the old system.”

Because a one-off project typically doesn’t replace the legacy system, businesses also miss out on the benefits a full digital transformation brings. Clinging on to legacy systems for too long can come with a sizable opportunity cost, says John Burke, CTO and principal research analyst at Nemertes Research.

“A business that ties up too many of their resources in a legacy system may lack the ability to invest in emerging technology spaces such as AI and IIoT. This will cost them not just the new revenue streams or improved efficiencies that could come from projects that revolve around those new technologies, but also the expertise they would develop and could then apply to other opportunities down the line.”

Deciding when to upgrade is somewhat of a balancing act, continues Burke. On the one hand, businesses can upgrade systems prematurely and irresponsibly, failing to justify their investment. On the other hand, holding onto a legacy system for too long can be an equally ill-considered move. CIOs must weigh up the costs of upgrading vs. the costs of maintaining legacy systems to come to the right solution.

Partnerships Provide Different Viewpoints

While in-house teams are often more than capable of carrying out holistic upgrades to legacy systems, a partnership with a custom development team is incredibly valuable. Not only do partners bring expertise, experience and the human resources to mitigate some of the biggest pitfalls of legacy system upgrades — disruption and scope creep, for instance — but they also bring a set of opinions that can be transformative.

“Combining a legacy system upgrade with a longer term cloud architecture strategy can greatly improve the ROI on this type of effort,” says Bill Clerici, CEO of Kingsmen Software. Finding a partner that has the expertise to do both will greatly increase the likelihood of a seamless and successful upgrade.

Greg Schulz, founder of StorageIO, considers an outside view essential when updating legacy systems. “You need to do that — to get that technical validation, that business assessment validation — just to cover your own backside. If you don’t have anybody else’s fingerprints on the decision, guess who’s stuck holding the bag?”

Not just any vendor will do, however. “You want an outside vendor who brings expertise in working with different entities across different states, across different business groups within the state,” he says.

“You want somebody who will listen to you and validate what you’re doing, but who will also challenge you, get you thinking outside the box, thinking of things in different ways and exploring different options.”

A different way of looking at the problem will often yield the best results, says Johna Till Johnson, CEO at Nemertes Research. “The important thing is to consider all legacy systems against all possible modernization alternatives, then select the approach that makes the most sense for each system.”

Rethinking the business process and the modernization strategy can often eliminate the business process and entire legacy systems.

Partnerships Facilitate Gradual Transformations

Issues with digital transformations occur when everything happens all at once. Where upgrades are handled in-house, the desire to get everything out of the door as quickly as possible is understandable. Developers need to get back to their day-to-day work as quickly as possible.

In a long-term partnership with a custom development team, however, enterprises can adopt an ongoing or portfolio-based approach to digital transformations, and all of the benefits that come with that approach.

“A gradual transformation ... can solve automation problems with minimal-to-no disruption,” says Jakob Freund, CEO of Camunda. “For example, a telecommunications company could take manual tasks run by customer service representatives and automate some of them with robotic process automation (RPA) bots. That’s step one in the gradual transformation.

“Step two might be orchestrating these RPA bots to tie together into actual business processes that may include multiple bots, other IT systems or supervisor approvals. Step three might be to sunset one of these bots and replace it with a modern, microservices-based application that’s much more robust and can be easily plugged into the existing end-to-end process.”

Gradual, ongoing transformations are quickly becoming the preferred approach of organizations. A survey by Gartner found 85 percent of companies have adopted or plan to adopt a product-centric approach that continuously integrates and delivers new features rather than a project-based approach.

Enterprises taking this approach tend to deliver more effective transformations, too. Research by Ivanka Visnjic, Julian Birkinshaw and Carsten Linz found that the most successful digital transformation initiatives of industrial companies are “usually stories of evolution, not revolution.”

Partnerships Are Powerful Even When Legacy Systems Can’t Be Replaced

For some organizations, replacing legacy systems will be the most cost-effective solution. For others, it isn’t possible to replace them. In some cases, legacy systems are so vital that they simply can’t be upgraded.

Where this is true, issues can be avoided through training that gets newer employees up to speed on outdated programming languages and workflows.

"Lack of training can cause users to make data errors, and the high employee turnover because of the current labor shortage can lead to inadequately trained new employees,” says Reda Chouffani, cofounder of Biz Technology Solutions. It’s why he recommends creating standard operating procedures and other training materials for new employees to reduce the risk of error.

But sometimes additional training isn’t enough. Because of employee turnover, as well as other factors, companies can quickly find themselves lacking the skills to maintain critical systems, says Justine Brown, contributing editor at CIO Dive.

She points to the example of a healthcare provider in the Midwest that offered early retirement to a large percentage of the workforce. Most employees accepted the offer, including most of the personnel responsible for maintaining legacy systems.

With a lack of experience in-house, outsourcing was the only solution. The healthcare company partnered with a development team to manage infrastructure services and help keep legacy systems afloat.

Whether legacy solutions require wholesale changes to keep organizations relevant, or specific skill sets are required to maintain critical systems while new development occurs, in-house teams rarely have the expertise or the capacity to handle development on their own.

Partnering with a custom development team ensures the biggest risks of digital transformation are kept in check while providing the ongoing advice and support required to make sure new solutions never become legacy again.

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