Insights

How to leverage the cloud for legacy modernization and innovation

Vishal Vasava, Head of Cloud & DevOps , UST Product Engineering

Legacy modernization is the need of the hour, yet most organizations are behind in their transformation efforts. Gartner Research stated that while 84% of organizations reported technical debt as a significant issue, they still need to address it. Unfortunately, 90% of current applications will still be used by 2025, consuming over 40% of IT budgets. A systematic way of modernizing will help deal with this gap. The pace of change is too fast for most legacy software and IT systems to deal with, which means business outcomes are affected. Transforming legacy systems would help reduce IT environment complexity and costs, improve process flexibility and data consistency, and enable collaboration across platforms.

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Pain points of legacy systems

Business leaders and technology heads know that legacy systems can severely hinder growth and survival in a world where digital natives rule. Enterprises yet to begin their legacy modernization journey have many options. But what is the right way forward?

There is no 'one size fits all' solution. The approach needs a delicate balance between business needs, security features, future strategies not built for 'mobile first,' regulatory compliance, and functional disparities. One must also consider the opportunity costs of not engaging in other, more transformative projects. Falling behind on legacy modernization can lead to bad customer experience (CX) and declining product maturity and customer stickiness. There are many reasons for this.

• Evolution of user profiles, behaviors, and expectations with time
• Not being scalable, cloud-ready, or technology evolved
• Change in business models and value chains
• Growing security concerns
• Changing regulations & business environment

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Challenges CIOs face in legacy modernization

Beyond legacy modernization, CIOs must also work on monetizing and transforming the solution for tomorrow. The mutlifold challenges that enterprises face while seeking legacy modernization include:

• Contextualizing business challenges for results that matter and eliminating unwarranted experiments and wastage
• Ensuring proper significant investments
• Opting for the right technology solutions and software delivery methods
• Engineering culture impact: appreciating team opinions regarding the decision-making process and the technology roadmap
• Managing the loss of tacit knowledge
• Enabling product innovation
• Tackling the knowledge gaps in best practices in Cloud, Microservices & DevOps and other NewIT technologies e.g. GenAI, BigData AI/ML etc
• Focusing on change management with the modernization program
• Long-term governance – orchestrating people, cost overruns, and realize right outcome

Steps to Value Realization

Legacy system modernization should not be considered an ad-hoc project but rather an ongoing process with a clear goal, consistent methodology, and planned transition for a satisfactory outcome. Modernization efforts call for functionality changes, rearchitecting, technology changes, or any combination of the above. These are followed by a tactical approach for application rationalization that may need rebuilding from scratch. These may include well known cloud-native strategies, re-platforming to the Cloud, refactoring, embracing automation and DevOps, UI/UX optimization, new persona understanding and addressing, etc.

A long-term cloud strategy will help organizations be aligned to achieve modernization and derive true value by installing business agility and flexibility. During this process, organizations must also be able to analyze business criticality, migrate, and optimize cloud economics and governance. They should develop the ability to innovate within context (as against disruptive innovation), technical capabilities in various latest tech trends, understanding of product life cycle aspects, ability to handle change management, and operating model changes.

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The right tools and technologies for the job

The UST product engineering team addresses the entire spectrum of challenges and factors. Our toolkit is a combination of solutions that helps personalize legacy modernization to meet expected business outcomes. Quick overview:

• 6R thinking to be applied to all the applications in the landscape one after the other (Rule-out, Rehost, Replatform, Refactor, Rebuild & Replace)
• Discovery and business case thinking in modernization. Discovery is crucial to business because, if not done carefully, it can introduce unknowns and risks in the overall roadmap and raise unbudgeted costs. We use tools during discovery that helps with execution and governance. Center of excellence set up to explore new capabilities in a synergetic manner with UST Product Engineering’s scalable services
• Persona interviews and design thinking, service design
• Cloud & DevOps adoption frameworks, mobility, new UI frameworks/SDKs, starter kits for fine-grained architecture like microservices, analytics, etc
• Platform engineering approach to build internal self-servicing platform for engineers
• Overall migration tools provided by cloud providers and their know how
• Well-architected reviews of your existing products and benchmarking them through UST EDIT-like assessment tools
• Some more considerations are the tools for application landscape assessment, RAM, business process documentation, system documentation, requirement trace matrix etc., to systematically capture the tacit knowledge with people
• And finally, consider the Rough Order Magnitude method for long-term budget estimates

Various capabilities needed to modernize

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Putting the cloud to work

Legacy modernization works only when we use the benefits of the cloud and AI. This helps enterprises adapt to changing business dynamics, become nimble and innovative and see a return on investments.

This can result in:

• Migrating to the cloud for optimization and elasticity
• Building rapidly using Cloud-native capabilities, potentially using a cloud-native low-code solution
• Quickly enabling products with intuitive features using AI/ML and analytics
• One can make choices to use low/no code solutions and GenAI to achieve faster time to market
• Forging product elasticity - scaling up/down on demand to generate savings
• Using DevSecOps enabled agile discipline and microservices to enable quality@speed. Think of managers orchestrating people in your initiatives vs. automation at play to foster consistent engineering processes. (Humans are not good at doing repetitive tasks)
• Making event-driven and loosely coupled solutions and choice of managed or self-managed utilities
• Considering white-labeling and new revenue streams like SaaS using cloud-based global infrastructure
• Speeding up marketplace launches and initiatives
• Consider serverless solution that leverages the lowest cost of function programming on Cloud platforms using lambda, Cloud function, etc. Imagine the price point compared to competing products built in a monolithic way
• Higher technical team engagement with Cloud & DevOps. Considering cloud as a way to modernize always attracts engineering staff
• Addition of a value chain in the form of cloud service providers and their support system
• Most importantly setup modernization center of excellence

Cloud platforms also provide various utilities and web services, which will help simplify these efforts. A recent example is a UST Product Engineering customer whose primary challenge was sorting, storing, and managing manual documentation with records going back two decades – on an outdated system built on legacy technology stack and tools. Our solution helped them migrate all applications to the Cloud and delivered enhanced features by deploying Cloud-native document processing services. The newly transformed business process helped realize a 60% boost in productivity, while a new serverless architecture gave significant OPEX benefits. With old SAP-like transactional ecosystems built around it, they often had friction points requiring elimination on their product persona journey. This is apart from the technical plastering required on legacy systems to become Cloud friendly.

Our customers seek technology modernization but are also concerned about the choice of future roadmap and the associated pitfalls. For instance, choosing low code, no code solution can transform quicker but may limit business diversification, hindering CIOs from exploring new revenue streams. We use tools like MicroFocus, CAST, EA, AveriSource, TMaxSoft, Heirloom Computing, etc., to understand components, architecture, code, business rule mining, logic extraction, and documentation. A combination of expertise and experience helps leverage these tools in modernization engagements.

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Build for a resilient future

Any legacy modernization roadmap is realized incrementally, and the changes with the least risks appear gradually. But as you progress, you reap many benefits that can lead to a sustainable future. You will have all the tools at your disposal - Cloud, mobility, advanced analytics, and cyber security with the expert help you need.

For more information on how UST Product Engineering can help your enterprise modernize your legacy systems, please visit Software Engineering Solutions and Services | UST