Why Modernize Legacy Applications in India’s Rapidly Digitizing Economy?

We are in the midst of an increasingly digital world, and nowhere else is this more prevalent than India, home to the fastest growing digital economy in the world. India’s digital economy is growing at 2.8x the rate of its regular GDP. It was 4.5% of GDP in 2014, over 12% today and projected to be 20% by 2027. 

With this rapid digitization, Indian enterprises are facing ever-pressing decisions on whether to modernize the legacy applications being utilized over the years in the face of rapidly evolving business demands. According to a survey by IBM, 83% of C-suite executives say modernizing applications & data is central to their organization’s business strategy.

The Paradox: Legacy Applications Offer Robust Performance but Pose Limitations

Modernization efforts are usually undertaken to optimize performance, but here’s the paradox regarding the current scenario: potential performance issues during the modernization process are preventing many enterprises from opting for it. Any issues in business critical applications can damage an organization’s reputation, and the reality is – most legacy systems demonstrate robustness, steadiness and efficiency in providing the desired business outcomes. In fact, there are still many benefits to certain aspects of legacy applications:

• Legacy applications still have high performance tools native to the mainframe, like virtual storage access methods (VSAMs), computational databases and in-memory data structures. VSAMs in particular perform remarkably well with COBOL-based applications.
• Most legacy applications have monolithic architectures where all the application layers are coupled and high performance is generated from not having to deal with network and communications overheads. Introducing modern architectures that build their foundation on multiple modular layers could be a challenge.
• Integration of multiple components (programs, databases, maps, Job Control language, schedulers, etc.) could be very efficient in a sophisticated legacy environment. Introducing modernization in this streamlined workflow could create performance bottlenecks.

Future-Proofing Your Enterprise: Why Legacy Modernization is Non-Negotiable

For most organizations, legacy applications are still the centre of gravity within their application portfolio. They contain important data and provide valuable functions to digital products & services. So, while it is a redundant question, it is an important one to ask: why should one modernize legacy applications at all?

The answer is simple: to future-proof your business. Legacy applications are not designed to match the pace of digital business demands. They involve a lot of physical footprint, something becoming increasingly obsolete in a cloud-centric world. Their systems may no longer receive vendor support, leaving them exposed to cyber threats. And as they age, they become extremely unwieldy to manage for your teams. It all leads to legacy applications having massive amounts of technical debt.

Avoiding the ‘Rip-and-Replace’ Trap

This is not to say that you should completely eliminate all your legacy applications, but rather use it as a springboard to support your desired business capabilities. A ‘rip-and-replace’ approach where you completely overhaul your legacy applications isn’t advisable for multiple reasons:

• This is an exhaustive process that will take close to a year, and your digital business efforts cannot wait that long.
• In such a constantly evolving ecosystem, new & changing demands will challenge the rigid nature of your ‘rip-and-replace’ project.
• You will have to deal with high upfront costs & risks. Overhauling at once can lead to massive security flaws that cyberattackers could exploit.

Balancing Performance and Security with Continuous Modernization

The truth is, the 80/20 rule applies in general for current legacy applications – 20% of the functions are causing 80% of the woes, yet 80% of the functions are still fit for purpose. You should keep aspects of it that still provide optimized performance, while creating strategies to modernize all parts of the architecture that create friction points for business optimization.

To that end, most Indian enterprises are searching for easy & efficient approaches to digital transformation that can provide cost-effective, modernized systems without losing core application functionality. Many modernization pushes must effectively balance performance and security, while taking into account other factors like customer retention, customer experience, business transactions, transformation costs/efforts, service quality and impact to brand value.

Taking all this into account, a strategy of continuous modernization could be highly beneficial for your enterprise. This involves identifying, prioritizing and removing friction points that negatively impact business agility & velocity. Two tenets are at the heart of this increasingly preferred approach: composability and modularity. Composability is a system design approach that enables systems to adapt quickly to changes while staying resilient, creating the perfect blend of performance and security that we are seeking. Modularity, on the other hand, is creating a system of building blocks that can easily be configured into various solutions. For example, let’s say you need to create an order-tracking function on your customer portal driven by legacy applications. You can use the cloud to build the order-tracking module, link it to your legacy systems using an API and extend it by building a web graphical user interface on top of it.

Continuous modernization should ideally be carried out in 3 phases:

Phase 1: Identification

It starts with identifying all the business capabilities supported by legacy applications. This involves getting into specifics, i.e. linking each component or part to respective capabilities. Then, using exercises like value-stream mapping and business-capability-impact mapping, you can highlight all the opportunities for optimization.

Phase 2: Prioritization

This is where you assess all the support structures for every business capability and identify all the friction points. Analysis should follow with regards to why modernization is necessary for each component, whether its poor business fit, high complexity, extra risk or added cost. Once a list of all friction points are gathered, they should be ranked according to importance. A good framework to follow is Gartner’s TIME approach, which categorizes each friction point into one of the following four categories:

• Tolerate: Accepting the application as it is for the time being.
• Invest: Prioritizing the application to gain maximum value from it.
• Migration: There is a need to find a better application for the task at hand.
• Eliminate: Removing the application if it lacks utility.

Phase 3: Transformation

This is where you choose an appropriate modernization approach that proves to be the perfect solution for each friction point. Here are some future-ready approaches we incorporate in our legacy application modernization India suite:

• Encapsulation: This is a technique that securely, gradually decentralizes legacy applications by having certain optimized functions take place outside the system. Synergy is achieved by relying on robust data integration tools that provide real time data mirroring of legacy systems to the modern data repository.

• APIs: You can develop APIs to facilitate seamless communication between legacy & modern systems, allowing for data exchange & resource accessibility. 

• AI: Artificial intelligence is now being used in a variety of ways across the modernization cycle. Generative AI can help you better understand your systems during Phase 1, while automation can streamline tasks and enable faster migrations when it comes to your modernization activities.

• Hybrid Multicloud: Cloud computing is becoming a staple for most Indian enterprises, and with so many types of clouds these days, there needs to be a realization; no single system is the perfect solution for all your tasks. Each system has its own merits. Therefore, hybrid multicloud, an ecosystem that incorporates a mix of public clouds, private clouds and on-premises legacy systems, is becoming an attractive choice for enterprises. Having an open-source hybrid multicloud that incorporates containerization can significantly improve your migration approach across systems. 

• Parallel Computing: This is a process where large compute problems are broken down into smaller problems solved simultaneously by multiple processors.

• Dynamic Scaling: This is one of the main reasons why people find cloud services so attractive, where resources can be scaled up or down in response to traffic spikes.

• Code Refactoring: After identifying outdated, redundant and inefficient code segments, you must incorporate code refactoring to break down lengthy functions, eliminate redundant code and optimize your algorithms. This will enhance your maintainability, readability and performance,

• Low-Code or No-Code Development Platforms: This will enable you to quickly create and deploy applications across your ecosystem with minimal manual coding.
• Data ETL Processes: These processes involve extracting data from legacy systems, transforming it to meet contemporary requirements and loading it into new systems. It is advisable to use precise data mappings to maintain data integrity all through the migration process. 

Doing the continuous modernization process in such a phased way will help you reap all its benefits, like cost savings, scalability, efficiency and future-readiness. It provides you with the application performance India demands in this digital era. Click here to get in touch about modernizing your legacy applications.