What is application modernization?

Application modernization is the process of converting outdated systems into more current, efficient, maintainable and scalable applications. It encompasses enhancements to an application’s architecture, code or infrastructure.

Modernizing applications is typically part of a company’s wider digital transformation efforts. According to a survey conducted by the IBM Institute for Business Value (IBV), 83% of C-suite executives said modernizing apps and data is central to their organization’s business strategy.

Application modernization entails thoughtful preparation and careful implementation, especially for critical systems. The process can be broken down into these key steps:

• Assessment
  
  
• Planning
  
  
• Implementation
  
  
• Testing
  
  
• Monitoring

The first step is to take inventory of existing applications and analyze their current state. Criteria for evaluation can vary based on what matters to an enterprise, but some common ones include business value, compliance and security risks, contribution to technical debt, cost and complexity of modernization, and performance and user experience issues.

Each factor will have its own weight, with scores calculated for every system. These scores can be used to rank and prioritize applications for modernization.

During planning, organizations outline their objectives and scope and determine the modernization method that best fits an application. The plan maps out budgets, likely risks and ways to mitigate them, resources and timelines.

This phase can be complicated and overwhelming, particularly for companies aiming to modernize huge or multiple legacy applications. Some might choose to engage third-party application modernization services, leaning on their expertise to help craft the right strategy.

The implementation stage is when enterprises put their plan into action. This includes carrying out their selected modernization approach.

Businesses must conduct thorough and rigorous testing to make sure all the app’s necessary features and functionalities remain unaffected. Consider running tests in a staging environment to isolate and fix any problems before a full deployment into production.

Keeping track of an application’s performance and other metrics can help pinpoint bottlenecks and opportunities for optimization. The results can also inform modernization schemes for other apps.

Modernizing applications often involves a strategic mix of methods rather than a one-size-fits-all approach. Here are some of the most common techniques, also known as the “R’s of modernization,” a few of which have been borrowed from the “R’s of cloud migration”:

• Rehost
  
  
• Replatform
  
  
• Refactor
  
  
• Rearchitect
  
  
• Rebuild
  
  
• Replace

Rehosting, also called lift and shift, moves an application to a new environment, making little to no meaningful adjustments to code and functionality. It’s a swift way to modernize while applying as few changes as possible, but the new environment must still have access to the same data.

Replatforming, sometimes referred to as lift and shape, adapts a system to a different platform, which can be another cloud provider or the latest version of a framework or operating system. It requires code changes to run on the new platform, so proper planning is vital to avoid scope creep.

Refactoring restructures an application’s source code without altering its core behavior and functionality. It contributes to more efficient software and quicker runtimes, enhances maintainability and helps reduce technical debt. This method can take longer than rehosting or replatforming and calls for skilled software developers, specifically when dealing with legacy code.

Rearchitecting modifies a system’s underlying design. It might look like transforming a large, tightly coupled monolithic application into a microservices architecture composed of many smaller, independent services, for example.

This approach provides the opportunity to adopt modern architectural patterns and offers improved flexibility and scalability. Like refactoring, however, it takes time and expertise to redesign a system while still preserving its expected behavior.

Rebuilding means starting fresh, scrapping the existing codebase and rewriting the app from the ground up. Software development teams get a chance to use the latest tech stack and follow current design and development practices.

This technique opens the door to innovation, with more control over functionality. It also allows organizations to retain their intellectual property and tailor the app to their business needs. But a rebuild can be more costly and intensive than other approaches due to the significant time, effort and resources required.

For legacy systems that have reached their retirement stage, a full replacement might be the most suitable option. A replacement can come in the form of a commercial off-the-shelf product or a SaaS application, as long as this newer packaged solution contains the necessary functionalities of the system to be decommissioned.

It can be more straightforward and less expensive than rebuilding, but businesses might also have less control over future features and will have to contend with vendor lock-in.

Enterprises can choose from a wide array of technologies to streamline application modernization. Here are some popular ones that work hand in hand to support the process:

• APIs
  
  
• Cloud computing
  
  
• Containerization
  
  
• DevOps
  
  
• Microservices
  
  
• Serverless computing

Organizations might prefer to leave an application in place while securely exposing its data or functions through APIs. These protocols serve as a bridge between legacy systems and modern apps, facilitating data flow and interaction for seamless connectivity and communication. Creating APIs for legacy applications eliminates the need for refactoring, rearchitecting or rebuilding while integrating them with modern services.

Cloud computing platforms provide on-demand access to computing resources over the internet, offering greater scalability than traditional on-premises infrastructure. They allow for rapid deployment and updates and deliver managed services.

Entities such as financial institutions, government agencies and healthcare organizations often opt for a private cloud to comply with regulatory requirements around workloads containing sensitive data. Other companies pick a more flexible cloud migration strategy that involves a hybrid cloud architecture to keep some workloads on prem while moving others to the cloud. Some businesses embrace a multicloud environment for better customization, broader feature and service selection and to avoid vendor lock-in.

Containerization encapsulates application code along with its libraries and dependencies into self-contained executable units called containers. These containers are lightweight and portable, allowing them to run quickly and consistently across different computing environments. Docker is one of the most popular open-source containerization tools, while Kubernetes is a widely used container orchestration platform.

DevOps automates and accelerates how applications are built, tested and deployed. Its hallmarks include continuous integration and continuous delivery (known together as CI/CD). In the CI/CD pipeline, developers commit code to a version control system, and that code is automatically packaged, tested and released to production.

This cloud-native architecture is typically used to decouple monolithic systems into a collection of smaller, loosely coupled components. New features or functionality can be added without affecting the entire app, and components can be updated or scaled independent of one another. Microservices can help companies gradually transition legacy systems into modern services.

Serverless computing allows teams to build and run applications without provisioning or managing servers and other back-end infrastructure. It works well for stream processing and event-driven workloads.

Generative AI can transform application modernization, making it easier, faster and more affordable. According to the CEO’s guide to generative AI, an IBV report, almost a third of the costs of modernizing legacy apps are due to code translation and development.

But gen AI tools can generate app components and code and automate testing, helping lower those costs. For example, IBM Bob, an AI-powered development partner, offers premium packages with purpose-built modes, skills and workflows for enterprise modernization—from upgrading Java applications to the latest versions to mainframe development with COBOL.

The report also found that some organizations are applying generative AI for refactoring apps or creating workflows for legacy system migration to SaaS versions. But the IBV recommends going after opportunities that were previously off-limits because they were too difficult or too scary to even attempt modernizing, such as flight scheduling systems in airlines or product lifecycle management systems in manufacturing. Processes within these core business systems, along with application modernization projects in customer service, information security and marketing, are where generative AI is expected to deliver the biggest impact and most strategic results, the IBV notes.

Together, application modernization and generative AI spur a cycle of increased agility and revenue growth. According to the IBV report, 77% of executives said that using gen AI in app modernization projects will increase business agility—and CEOs who embrace agile practices are 49% more likely to outperform their peers on revenue growth.

Modernizing applications offers these advantages for businesses:

• Agility
  
  
• Better user experience
  
  
• Efficiency
  
  
• Reduced operational costs

Modernization allows enterprises to swiftly respond to market changes and fulfill evolving customer needs. They can deliver new features and enhanced functionalities without the downtime that comes with legacy systems.

Aviation company Lufthansa Group, for instance, modernized its ground operations by merging multiple mobile applications into a single, web-based solution called Turnaround Companion (TAC). Built on modern web technologies, the cloud-native platform’s modular structure allows for flexible adaptation to new requirements. Updated releases of TAC also have a downtime of only a few minutes compared to nearly 45 minutes for legacy mobile apps, with an aim of zero downtime for future releases.

Upgrading older, sluggish apps generally entails updating their user interfaces too. Intuitive, responsive, seamless and smooth interactions with apps make for a positive user experience that can improve customer satisfaction.

In Lufthansa Group’s case, TAC’s new design produced a consistent user experience across different devices. The platform’s intuitive interface and clear data visualization empowered ground personnel to quickly grasp important information and respond effectively even in stressful situations.

Application modernization usually leads to faster processing times and low latency, with systems that can handle varying workloads without a decline in performance. Cloud environments, in particular, can scale capacity up and down based on real-time spikes and dips in traffic.

For Lufthansa Group, its unified platform significantly improved the efficiency of its ground operations, with real-time tracking of the aircraft turnaround process. All data and communication is also consolidated into one solution stack, facilitating swift coordination among airport and airline staff.

Legacy applications are often costly to maintain. Modernizing them can decrease maintenance costs, with businesses investing these funds into innovation instead. Cloud computing platforms also offer a more cost-effective model through pay-per-use pricing and reduced infrastructure overhead.

Telecom brand stc group, for instance, adopted a hybrid cloud architecture. Replatforming to a high-performance solution provided a nearly one-third drop in containerization costs, a 30% reduction in capital expenditure and a cut in hardware-related operational costs.

While application modernization delivers meaningful benefits, the process also has its drawbacks. Here are some common hurdles enterprises might encounter as they modernize applications:

• Complexity
  
  
• Cost
  
  
• Data migration
  
  
• Skill gaps

Large legacy systems can be difficult to modernize because of their monolithic nature and their accumulation of technical debt. But even older systems with a smaller scope can become a hindrance due to their intricate dependencies.

Companies might find it easier to start in stages, dividing modernization projects into more manageable phases. Rather than tackling an app all at once, they can focus on a less critical aspect first and refine their approach for the next stages.

Modernization might seem like a hefty one-off expense, and budget constraints can derail these efforts. The previously mentioned phased approach can help, along with a comprehensive cost-benefit analysis and prioritizing high-impact systems that deliver clear value and a measurable ROI.

Data migration is an often overlooked aspect of modernization. When not done properly, it can lead to data loss or corruption and can introduce security risks.

Before migration, enterprises must encrypt all their data and prepare for backup and restore to maintain data integrity. Other factors to consider include the type of workload, the volume of data, how long it will take and how to minimize downtime or disruptions.

Businesses usually lack the knowledge and skills in the technologies they’ve chosen for modernization. They must be ready to invest in training and upskilling programs, equipping their teams with the necessary capabilities to implement and maintain modernized systems. Partnering with external providers who can guide and support organizations throughout their modernization journey can be an alternative option.