Legacy system modernization for the digital era 

Legacy system modernization is the essential process of updating outdated software, infrastructure and applications to align with current and future business demands as technology evolves.

The imperative for legacy system modernization

• Legacy systems struggle to quickly adapt to modern business dynamics due to their outdated architecture and proprietary nature.

• Modernizing legacy systems enhances functionality and efficiency by integrating historical data with current technologies.

Challenges and benefits of modernization

• Maintaining legacy systems is costly, inhibits innovation, limits integration with business systems and creates data silos.

• Older systems are prone to unreliability, security vulnerabilities and a lack of scalability, hindering their ability to meet increasing demands and maintain compliance.

• Modernization, particularly by moving to cloud-native infrastructures, reduces capital investment and maintenance costs, improves security and ensures adaptability for future growth.

Approaches to modernization

• Strategies like encapsulation, rehosting and federation often introduce new complexities, performance overhead and dependencies without fully resolving underlying issues.

• A more effective approach involves utilizing new, cloud-native solutions that offer enhanced scalability, performance and the ability to leverage cutting-edge technologies like AI and machine learning.

Current state: Legacy vs. modern

As businesses require increasingly agile, adaptable solutions, legacy enterprise content management (ECM) systems have quickly become obsolete. In fact, Forrester found that 76% of leaders are investing in modernization efforts to move away from legacy tools so they can reduce risk, eliminate silos and improve IT agility.

Many organizations’ legacy systems have been in place for years and even played a critical role in business operations and growth. While they may have served their purpose well in the past, the plain truth is they no longer can. Those systems were never designed to quickly adapt to changing business dynamics, and attempting to get antiquated systems to do modern work will lead to reduced productivity and a system that creates more roadblocks than solutions.

Although moving to more modern solutions can seem monumental, modern ECM platforms greatly simplify transitioning off legacy systems. Today’s leading ECMs:

• Provide sophisticated environments and tools like cloud-native architecture, intelligent processing and robust integration capabilities

• Take full advantage of cloud-native architectures

• Gain new insights and efficiencies with intelligent processing capabilities

• Deliver content in context with robust integrations with key business systems

With new technologies like AI and cloud-ready infrastructure available, now is the time to consider legacy system modernization. Let’s examine some considerations as you evaluate what’s next.

Legacy ECM systems rely on outdated technology and manual processes. Their functionalities were meant to be simple: Store and index digital copies of business records to be located and retrieved at a later date as part of a business process or in response to an ad-hoc request. 

But today, they also fall short in a number of ways: 

Challenge 1: High maintenance 

Legacy systems often need frequent maintenance. This requires specialized maintenance resources and increased IT budgets. Even then, the maintenance and upgrades these systems receive are often only fundamental, primarily covering bug fixes or compatibility enhancements — with limited, if any, innovation or new capabilities. 

Challenge 2: Integration issues 

Legacy systems often rely on proprietary interfaces, data formats or communication protocols that are incompatible with today’s standard integration methods, making it difficult to perform data exchange with other systems. This creates data silos and inefficiencies, hindering communications, operations and modernization efforts. 

Challenge 3: System unreliability 

Legacy systems are prone to crashes and failures due to under-maintained software, irregular maintenance and complex or obsolete architectures that are hard to maintain and debug. This leaves businesses at risk of disrupted operations or security breaches. 

Challenge 4: Lack of scalability

Scalability becomes an issue when legacy systems aren’t able to handle increased customer demands, user growth, data volume and complexity. This is often due to outdated system that have rigid architectures that make it difficult to scale horizontally or vertically.

Challenge 5: Inability to adapt to new, changing threats

Because of its outdated architecture and lack of encryption measures, older systems often possess inadequate security measures. This can lead to data breaches, leaks, cyber-attacks and service outages, complicating compliance and undermining a business’s reliability and trustworthiness.

Challenge 6: Poor user experiences

Asking your team to persevere with outdated interfaces hinders production due to the aging, poorly integrated solutions and leads to unhelpful rates of adoption among users.

Challenge 7: Skill shortage

As legacy systems become more outdated, and more modern systems take their place, the demand for knowledge on newer systems becomes higher while the requirement for legacy system skillsets dwindles. Companies that are reliant on legacy systems are increasingly unable to maintain and adapt these system to meet today’s challenges, as it may be difficult to find people to maintain, secure and update their system capabilities.

Challenge 8: Content isn’t ready for AI

As companies modernize their technology stacks and advance their AI efforts, the quality and usability of their enterprise content isn’t as helpful as it needs to be. With most of the data unstructured, it’s critical for an ECM to be capable of structuring it and making it ready for AI solutions. Not only is all that data a critical foundation for business intelligence, automation and scale — it’s also a competitive differentiator for those able to harness it and act on it.

Legacy system modernization can be a daunting task, especially as there are several possible approaches that depend on a variety of factors like the complexity and size of the legacy system, available budget and core business priorities.

Some approaches, while simpler and less costly to execute, come with their own set of problems.

Encapsulation

Encapsulation involves wrapping existing systems (i.e., legacy components or functionalities) within newer, modernized architecture — this means that only the interface layer is altered. The idea is that since new data and functions are applied using an external API, entire processes are still controlled via legacy systems.

This is a phased approach to modernization, but encapsulation doesn’t solve several of the problems companies are already facing when considering legacy system modernization, especially involving difficulties with maintenance, integration and upgrading.

Encapsulation also poses additional challenges, one being performance overhead. This actually increases computational resources (such as CPU, memory and network bandwidth) or time required by a system or application to execute additional tasks or processes. Instead of solving operational complexities, encapsulation adds to them as companies must maintain and manage the encapsulation layer on top of the legacy system.

Organizations may also become dependent on specific vendors or proprietary technologies to maintain the encapsulation layer, limiting flexibility and vendor choice.

Rehosting and replatforming

Rehosting and replatforming are alternate modernization strategies companies may consider.

Rehosting involves moving current applications from on-premises to a cloud or different hardware with minimal code changes, called “lift and shift.” This transfers applications and databases to the cloud and adjusts them to work in the new setting.

Replatforming has a similar approach, with an additional step known as “tinkering” (making minor adjustments like updating configurations, adjusting settings or optimizing code for better performance).

There are drawbacks to both approaches. Rehosting doesn’t address underlying issues and inefficiencies in application architecture. By simply migrating applications into a new environment, systems can still exhibit previous limitations such as performance bottlenecks, inflexible scalability and maintenance challenges.

Replacing

Many companies come to realize their legacy system must be replaced. Perhaps the solution can’t be encapsulated, rehosted or replatformed, or maybe it simply can’t meet requirements any longer.

Replacing legacy systems with completely new solutions would incorporate necessary features and functionality to meet your organization’s current and future needs, while also incorporating new capabilities not available on the old system, reducing long-term maintenance costs and significantly contributing to increased ROI.

Modern solutions enable organizations to incorporate the latest technologies, functionalities and features to address current business problems, providing an opportunity for companies to align their systems closely with their goals and objectives to support future growth.

Managing legacy system modernization involves a combination of strategic planning, effective communication, risk management and careful execution. Start with implementing these best practices:

1. Assess current systems 

Then, conduct a thorough assessment of your current legacy system, focusing on performance, limitations, scalability and other requirements. 

2. Understand business needs 

Define how your solution upgrade can support your business requirements, considering present and future growth ambitions. 

Make sure your planned modernization efforts ensure business continuity and smooth integration with past and current data. 

3. Consult experts 

Engage with key technology and industry experts across your organization and beyond, including business leaders, IT professionals, analyst firms and external partners. 

4. Address high-impact areas 

Focus on addressing high-impact areas while minimizing disruption to ongoing business operations. This may be prioritizing incremental changes that can deliver tangible benefits, or in more serious cases, implementing a system overhaul through rebuilding or replacing. 

5. Invest in training and support 

Invest in training and support programs to equip team members with the necessary skills, knowledge and resources to play their part successfully. 

6. Conduct regular reviews 

Monitor progress against the intended objectives, tracking KPIs and milestones to make sure they align with project goals. 

Holding on to your legacy ECM system ultimately hinders your business's ability to effectively manage and leverage your organization's valuable content and information, causing operational delays and placing you at a competitive disadvantage. 

According to a McKinsey report, “reinvented” legacy companies see around 2.5 times more revenue growth, as well as a twofold increase in EBIT growth and ROI on digital efforts compared to their traditional counterparts. 

A robust ECM platform is often beneficial to companies implementing legacy system modernization efforts. ECM platforms facilitate the migration of content from legacy to modern systems, manage content throughout its lifecycle and strengthen information governance practices, among other tangible benefits.

Here’s a comprehensive look at how ECMs can play a part in system modernization:

Modern cloud-based architecture and extensibility

ECMs are usually cloud-based, offering scalability and lowering IT costs while improving security.

As modern ECM systems are typically built on cloud-native architectures with robust APIs, components can be deployed and scaled independently to meet changing needs. They also enable seamless integration with external data sources and systems, facilitating interoperability and data exchange, and enabling federation of content across disparate repositories.

By leveraging APIs and connectors, modern ECMs access and aggregate content from various sources, including legacy systems, cloud applications, databases and external repositories. This provides a unified view of content assets.

Overall, this offers scalability, reduces IT costs and bolsters security.

Intelligent processing capabilities

 AI and machine learning (ML) automates content categorization and tagging, extracting intelligent data and supporting predictive analytics for forecasting trends. Products likeHyland Knowledge Enrichment remove barriers to processing unstructured data and AI-enable your content. This gives the data you already own — which was previously too difficult to access and leverage — more power for downstream AI products.

> Read more | Use AI to redefine content management

Multiagentic automation orchestration

Most organizations have automated tasks and workflows, but the rest of the process still depends on people and disconnected systems. An agentic automation and orchestration platform helps organizations coordinate multiple AI agents alongside other automation tools and enterprise systems to complete individual tasks, make decisions and carry out follow-up actions across the full business process.

> Read more |  Explore agentic document processing

Access anywhere, any time

Giving your team the technology it needs to get work done with the most up-to-date data improves their lives and enhances their work. When everyone has the tools they need to easily and securely access the right content at the right time, they can deliver more informed decisions and offer top-of-the-line service. Plus, with modernized systems, your content stays safe with leading data security practices and back-up plans, so even if disaster strikes, your enterprise content remains safe.

> Learn more | What is disaster recovery software?

Integrations to key business systems

A seamless integration of your content management solution into and across critical business systems is key to your modernization journey. When you’re able to manage all of your content and processes with powerful connections between content tools and business applications, you can enhance workflows, outcomes and experiences.

Selecting the right ECM platform for your legacy system modernization efforts

Legacy ECM systems that rely on outdated technology and manual processes can create operational inefficiencies, pose integration challenges, escalate costs, and present compliance and security risks. This significantly affects productivity and business growth.

Hyland’s modern, cloud-native content management platform, Content Innovation Cloud™, fundamentally redefines what you can do with your content. It enables extensibility and integration, and it makes migrations simple. Our suite of content intelligence tools, as well as our ecosystem of professional services, partners and systems-integrator networks provide user-friendly, low-code interfaces, ensure rapid implementation and empower developers to create faster. Learn why Hyland might be the solution for your legacy system modernization.