In today’s business world, speed is the key to success. Companies that use modern IT systems work faster, more efficiently – and win. However, many companies face a problem: outdated technologies, so-called legacy systems, slow down processes and prevent innovation.
This is exactly where IT modernization comes into play.
IT modernization is the structured process of replacing or supplementing old technologies, processes and strategies with modern, efficient solutions. The aim is to increase productivity, competitiveness and security – and to be fit for the future.
IT modernization is an important part of digital transformation, i.e. the development that is forcing companies worldwide to change radically. Dealing with legacy systems in particular represents a real challenge.
Source: Effective IT modernization strategies to secure your company’s future
Estimated reading time: 7 minutes
Key Takeaways
- IT modernization is crucial for the future viability of companies.
- Outdated legacy systems cause high costs and hinder innovation.
- Side-by-side development enables low-risk and cost-efficient modernization.
- The integration of modern applications increases flexibility and agility.
- Successful IT modernization requires clear planning and the involvement of all stakeholders.
Table of contents
- Understanding the digital transformation
- Challenges of legacy systems
- Why IT modernization is crucial
- Strategies for IT modernization
- Side-by-side development explained
- Integration of legacy systems with modern applications
- Cost-efficient modernization without expensive replacements
- Advantages of side-by-side development
- Implementation best practices
- Case study: Successful IT modernization
- Conclusion: IT modernization as the key to the future
- Check IT fitness now
1. understanding the digital transformation
Digital transformation as the basis for IT modernization
Digital transformation describes the integration of digital technologies into all business processes. It is fundamentally changing how companies work and how they offer their customers added value. But it’s not just about technology. Successful digital transformation requires:
- Cultural change: Teams must be open to new technologies and ways of thinking.
- Continuous learning: Existing processes are constantly scrutinized and improved.
- Experimentation: Innovation comes from experimenting with and testing new approaches.
One thing is clear: digital transformation cannot be implemented without a modern IT infrastructure. The basis for this transformation is therefore IT modernization.
2. challenges of legacy systems
What are legacy systems and why are they a problem?
Legacy systems are outdated hardware and software solutions that still work, but no longer keep pace with modern requirements.
Typical problems:
- Slow performance and limited efficiency.
- Not compatible with cloud, mobile applications or new interfaces.
- Expensive to maintain – a large part of the IT budget is spent on repairing old systems.
- Security gaps, as security updates are regularly missing.
- Shortage of skilled workers, as hardly anyone still masters the old systems.
- Lack of flexibility, e.g. with new products or business models.
According to industry analyses, legacy systems often consume more than 50-70% of a company’s total IT budget – just for maintenance and servicing.
3. why IT modernization is crucial
IT modernization is not just a technical upgrade, but a strategic investment in future viability.
Important advantages:
- More efficiency: Modern systems work faster and enable automated processes.
- Better use of data: Companies receive reliable analyses in real time and can make smarter decisions.
- Optimized collaboration: Digital communication tools simplify teamwork – even across locations.
- Lower operating costs: less maintenance and more efficient hardware save money.
- Greater agility: companies can react more quickly to market changes.
- Stronger IT security: Modern defense systems are needed against modern cyber attacks.
- Compliance with legal regulations: Updated systems are often automatically GDPR-compliant or meet other regulatory requirements.
Sources: Why IT modernization?, Benefits of IT modernization, IT modernization
4. strategies for IT modernization
Companies can take different paths to modernize their IT. These depend on budget, time frame, risks and goals.
Overview of the most common methods:
- System replacement: Complete replacement of the old system.
- Refactoring or re-architecture: Existing software is redesigned using modern technology.
- Rehosting (lift and shift): Legacy systems are moved to a new environment, e.g. to the cloud.
- Replatforming: Switching to a new platform without directly changing the function.
- Encapsulation: Access to old systems via interfaces, e.g. APIs.
- Side-by-side development: New applications are developed in parallel with existing ones.
The best approach depends on the specific operational requirements. Those who want to minimize risks and costs at the same time often opt for side-by-side development.
5. side-by-side development explained
With side-by-side development, IT teams develop new applications without immediately shutting down the old systems. Old and new run in parallel – a kind of “smooth transition”.
Difference to other approaches:
- No drastic change
- Users can use both systems simultaneously
- Tests and improvements are possible before the old system is shut down
Advantages:
- Less downtime: Operations continue.
- Step-by-step migration: Functions and data can be transferred in stages.
- Flexible pace: Modernization takes place at the pace of the company.
- Lower risk: If a problem occurs, the old system is still available.
6. integration of legacy systems with modern applications
How old and new work together intelligently. One of the biggest challenges is connecting legacy systems with modern applications.
Here are some methods for integration:
- API development: The old system can communicate with new solutions via programming interfaces.
- Middleware solutions: Bridge components connect old and new systems.
- Data virtualization: Direct access to data without moving it.
- SOA (service-oriented architecture): Services are designed on a modular basis – this increases flexibility.
- Event-based architectures: Systems react in real time to events (e.g. server message or customer request).
- ETL processes (Extract, Transform, Load): Data extraction, transformation and feeding into modern databases.
Popular tools and platforms:
- IBM Integration Bus
- MuleSoft
- Apache Kafka
7. cost-efficient modernization without expensive replacements
A complete system replacement costs a lot of time, money – and nerves. When comparing methods, side-by-side development is particularly impressive due to its cost-effectiveness.
Cost comparison
System replacement:
- High initial investment
- Standstill during the changeover
- Training and implementation costs in one fell swoop
Side-by-side development:
- Costs spread over months or years
- Parallel operation = no loss of productivity
- Possibility of optimization during implementation
IT modernization usually saves companies significant costs:
- Maintenance costs of old systems
- Parallel energy consumption, as modern hardware is more efficient
- Personnel deployment thanks to automation
- Avoidance of downtime and loss of sales
- Cloud solutions instead of own server rooms
- Use of license-free open source technologies
8. advantages of side-by-side development
Side-by-side development offers companies numerous strategic advantages:
- High degree of flexibility: adaptation to market changes in real time.
- Good scalability: systems grow with the business.
- Stable operating processes: No interruption to business processes.
- Better user experience: New, modern functions – without breaks.
- Preservation of knowledge: Legacy systems often contain important specialist know-how.
- Continuous improvement: the old can be gradually adapted to the new.
9. implementation best practices
Step-by-step to successful IT modernization:
- Analysis of current legacy systems
Check performance, security gaps, maintenance requirements and modernization potential. - Definition of the objective
What should be achieved? Market adaptation, cost reduction, better customer experience? - Planning the integration
Which interfaces, data sources and applications need to be connected? - Develop a data migration strategy
What data needs to be transferred? How sensitive is it? - Update security
Install modern security protocols and access rights. - Develop and test applications
Set up test environments for new applications in parallel operation. - Training and change management
Employees must understand and accept the new systems. - Gradual introduction of new systems
Gradual changeover by department or function. - Monitoring and optimization
Ongoing improvement based on user feedback and system data.
Tips for minimizing risk:
- Clear project management
- Involvement of all stakeholders
- Flexibility for customization
10. case studies: Successful IT modernization
Practical example from industry and the financial sector
Case study 1 – Industrial company
Problem: Outdated ERP system, slow processes
Solution: New ERP solution introduced in side-by-side operation
- 40% faster processes
- 25% lower operating costs
- Better data analysis for managers
Case study 2 – Financial services provider
Problem: Legacy systems hindered rapid market launch
Solution: Customer front-ends modernized with side-by-side development
- Time to market reduced by 50%
- 30% increase in sales in the first year
- Higher customer satisfaction
Lessons learned from both projects:
- Clear goals are crucial
- Change management must be planned for
- Communication with employees is a key factor for acceptance
Source: Advantages of IT modernization
11: Conclusion: IT modernization as the key to the future
Whether SMEs or large corporations – without IT modernization, companies will come to a standstill sooner or later. Only those who use modern infrastructure can successfully implement the digital transformation. Side-by-side development is a particularly efficient, low-risk path to renewal. It combines the best of old and new – step by step.
12. check IT fitness now
Take the first step:
- Check your legacy systems with our free IT modernization checklist!
- Arrange a free consultation with our IT experts.
- Take advantage of our knowledge package with tools, resources and practical examples.
Take the step towards future-proof IT now – efficient, secure and economical.
👉 Make your IT future-proof – with a free initial consultation and our IT modernization checklist. Get started now and put your company on the road to success.
