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Software modernization can optimize performance, security, and business competitiveness. Read our guide to create a road map for modernization success.


Software Modernization for Increased Efficiency and Competitiveness

Posted by Angela Davis on November 7, 2023
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Software modernization is essential for any business that wants to stay competitive today. The rate of technological advancement and digital transformation has accelerated over the past ten years and shows no signs of slowing.

Today, customers expect smooth, effective services that are web-accessible. If they want to keep up, companies cannot keep relying on dated legacy systems; they have to evolve. 

Read on to understand how to successfully implement software modernization and benefit from its many advantages.

What is software modernization?

Statistics that support the need for software modernization

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Software modernization is the process of updating legacy software. In 2023, more and more businesses, in industries from the banking sector to healthcare providers, are recognizing the importance of this process. 

Modernizing software instead of replacing legacy systems entirely allows businesses to combine the many benefits of modern-day systems and applications with the parts of older systems that may still hold invaluable information. 

Modernizing software allows businesses to use the many benefits of modern-day systems. The main difference between modernizing and replacing legacy systems entirely is that certain modernization strategies provide methods to combine the use of newer systems with legacy data and utilities. 

Using software modernization, businesses can reap the following rewards:

  • Overcome technological constraints.
  • Improve customer experiences. 
  • Improve operational efficiencies. 
  • Integrate legacy and newer systems. 

There are multiple approaches you can take to legacy software modernization. For example, migration tools allow businesses to continue using existing systems. We’ll go over the most popular software modernization approaches later, but first, let’s look at why software modernization is beneficial for businesses.  

Why is the modernization of software important?

There are many reasons to consider software modernization for your business. We’ve compiled some of these below. 


The older they become, the less useful legacy systems are. You may find they start to run slower and less efficiently, and that you’re increasingly  hampered by crashes and downtime. Ultimately, projects will take longer to complete and your business’s growth will be stunted. 

Therefore, software modernization can boost business performance. By integrating your legacy tech stack with newer systems, you’ll see disruptions decrease as well as speed and user experiences improve. 

Scalability and flexibility

Legacy systems simply weren’t built for the modern era, so you may struggle as you expand and need to adapt to new technologies. It’s likely you’ll find it difficult to grow your business in the way you’d like to. 

However, by embracing innovations like cloud modernization, you’ll be able to scale more effectively. This will enable you to deal with larger-scale workflows, market fluctuations, and any other challenges you encounter as your business grows.  


Perhaps the biggest argument for software modernization is cost-based. Completely scrapping an old system and introducing new technology is incredibly expensive. Not only will you need to pay for new software, as well as its implementation and management, but you will also need to retrain employees to use it. 

However, sticking with an outdated system is also costly. Older systems often run into problems, and ensuring they’re running as they should requires frequent maintenance. 

By upgrading rather than replacing, however, you can save a great deal of money by removing unneeded processes to ensure greater reliability. Cloud systems also allow you to only pay for the processes you use. 

Security and compliance

69% of businesses are boosting their cybersecurity investment in 2022

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Cybersecurity is a priority concern for many businesses in 2023. As quickly as technology improves, cybercriminals are working to find new ways to breach it. As many as 66% of small to medium-sized businesses have experienced a cyber attack in the past 12 months.

Older systems are less equipped to protect against these threats. Enter software modernization, which allows you to enjoy the advantages of up-to-date security, minimize the risk of cyberattacks, and protect your data. 

Modern software also helps ensure compliance with data laws. Certain legislation includes penalties for businesses that leak customer data, so, most modern software comes with rigid protections to guarantee security. Another advantage of modern software is that these security systems are updated regularly.


As we mentioned before, businesses across the board are adopting the latest advancements in tech. Technologies like machine learning allow businesses to reach their audience in more targeted ways, while automated workflows accelerate the completion of projects. And, the list of upsides goes on. 

If your competitors are investing in this tech, you can be sure that they will reach their goals more quickly. To avoid being left behind, software modernization is essential.

Successful software modernization examples

Software modernization isn’t a new activity; in fact, it’s a tried and tested approach. OpenLegacy has helped many different companies to effectively modernize. Two examples of companies whose software modernizations were successful are Autogrill and Maccabi Healthcare Services.


Autogrill is an Italian multinational catering business that operates in 30 different countries. 

The company had identified the modernization goals it wanted to achieve and was searching for a partner to provide software modernization services. Among its objectives, it desired full visibility of its core data and analytics. A major problem it flagged was that its existing BM i (AS/400) and SAP systems didn’t facilitate instant access to the data it needed. 

Together, Autogrill and OpenLegacy formed a formidable team. As part of their collaboration, OpenLegacy developed multiple connectors to Autogrill’s backend to generate cloud-native microservices. Both Autogrill and its partners could use these to leverage its core services.  

The end result was a resounding success and a major win for Autogrill’s digitalization and software modernization strategy.

Maccabi Healthcare Services

Maccabi Healthcare Services is Israel’s second-largest health maintenance organization (HMO) and healthcare insurance provider. The company serves 2.4 million members and provides full-life health services, including hospitals, pharmacies, assisted living homes for the elderly, and more. 

Maccabi sought to modernize its dated IT structure and create microservices from its COBOL programs while maintaining its core IBM i operating system. 

The company also wanted to boost time-to-market for function and feature rollouts, automate efficiencies by using generic contracts, and turn COBOL programmers into first-class API developers. 

Maccabi partnered with OpenLegacy and began a pilot program to develop two microservices. The first would manage medications for patients, while the second would provide a physician-patient messaging service. 

Together, OpenLegacy and Maccabi developed a software modernization strategy that included the following steps: 

  • Business analysts provided a generic contract to be used by all microservices teams
  • Business analysts created specifications for each relevant operation of each microservice
  • COBOL developers used the generic contract to build microservices and implement the outlined business logic using OpenLegacy Hub. No coding or knowledge of advanced technologies was required  
  • The CI/CD process was implemented and the microservices deployed following a no-code approach

Following successful implementation and IBM application modernization, Maccabi’s developers were able to use code to realize any business logic in a matter of hours. 

IT software modernization strategies

IT software modernization can take many forms, so, let’s discuss several of the most common strategies that are used. 

Cloud migration

Cloud migration is the process of transforming legacy software and data by taking advantage of the benefits cloud computing can offer. There are two different and distinct forms of cloud migration. 

The first, data center migration, involves transferring an on-premises server to the cloud. This usually involves using a high-capacity network. An alternative method is to ship ‘data boxes’ to the cloud provider, who then uploads these themselves. 

The second option is hybrid migration, where an organization moves only some of its data and applications to the cloud. This is a less extensive migration and may be preferred by organizations that are conducting a more gradual migration. 


Rearchitecting involves modifying an application so it runs more efficiently in a hybrid environment, for example, transforming the app so it can operate in the cloud. For this reason, it’s the most expensive form of software modernization. 

At the end of the process, the user retains the best elements of the legacy system combined with the scalability and security of newer technology. 


Refactoring is similar to re-architecting because they both involve restructuring code. The code can then be transferred to a new application so that you can make use of new and improved features. 


Data exchange refers to the process of moving data between systems. This form of software modernization allows existing data to be utilized on new software. 

Five essential steps for software modernization solutions

Any successful software modernization solution must follow these five essential steps:  

1. Identify and assess your current software systems

Begin by taking an inventory of your existing software. Remember, the more extensive your modernization, the more expensive the process will be. 

Consider the systems that are most in need of updating as well as your modernization goals. What benefits would you like to see at the end of the process? 

2. Conduct competitor research and consider business alignment

As mentioned, a key part of software modernization is keeping up with your competitors. Research what systems they might be using to achieve their goals. 

Also, consider how your modernization efforts can boost business alignment by supporting cross-departmental teamwork. 

3. Choose the best modernization strategy

Above, we discussed several modernization strategies you could use. Consider which approach would best suit your goals and finances. If you have a smaller budget, hybrid migration could be the best choice. You could also consider using microservices for legacy software modernization to facilitate faster scaling. 

4. Complete a modernization risk assessment

A thorough risk assessment is vital. Because software modernization is a complex procedure, there can be a risk of damaging applications or losing data if it’s not done safely. 

Consider factors like the total cost of ownership before beginning your modernization, and carry out a careful audit of platforms and processes.  

5. Create a comprehensive roadmap for the process

Once you’ve considered these steps, put your plans together to create a roadmap. A clear plan will keep you on track and ensure you successfully meet your goals. 

How OpenLegacy can support software modernization

A graph showing answers to the question ‘If you do not modernize your legacy applications in the next two to three years, how will this impact your business?” 

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While outdated legacy systems won’t be able to successfully support your business’s future, sometimes replacing them entirely isn’t an option. Software modernization provides a middle ground. You can access the benefits of new software and avoid the difficulties of a complete upheaval. 

If you opt for software modernization, remember that OpenLegacy is on hand to help. We can generate, extend, and manage digital services, taking your business from the confines of your legacy systems to the flexibility of the cloud. 

Schedule a demo today to see the benefits of our legacy software modernization services for yourself. 


Software modernization FAQs

What is software modernization’s main challenge?

One of the biggest difficulties of software modernization is not understanding that there are two parts to modernization. The first is software modernization; the second is modernizing your processes. Many businesses forget this second stage and only focus on the first. However, if you neglect your processes, you can still risk falling behind your competitors. 

How do you know a software system requires modernization?

There’s no single indication that your software requires modernizing, but multiple factors can suggest the need for an upgrade. These can include increased system crashes, lack of support for mobile users, and vendors stopping updates for the software. 

How long does software modernization take?

Modernization is a complex process and, depending on the scale, can take years to implement. A multi-phase approach can help you avoid this. It involves modernizing individual areas, perhaps as a series of smaller projects, rather than tackling your entire organization at once. 

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