SAP Logo LeanIX is now part of SAP
Content Hub on

Application Modernization

Uncover the essentials of application modernization. Dive into the process, benefits, challenges, and strategies for a successful transformation journey.

► Find out how to get started with Business Transformation now!


In an era where technology is constantly evolving, application modernization (a.k.a. software modernization) has become a necessity for businesses to stay competitive.

It is a process of transforming legacy systems into modern, efficient, and scalable applications that can meet current and future business demands.

This journey is not just about updating technology; it's about aligning IT infrastructure with business goals, improving agility, reducing costs, and mitigating risks.

As we move deeper into this guide, we will explore the various strategies, benefits, challenges, and key steps involved in the application modernization process.

📚 Related: Application Modernization Solution


What is application modernization?

Application modernization is the process of updating older software for new computing approaches, including modern cloud environments, mobile platforms, and business process management.

This process is essential for improving efficiency, agility, and scalability, enabling businesses to respond more effectively to changing market dynamics.

The need for application modernization arises when legacy systems—those that have been inherited from languages, platforms, and techniques earlier than current technology—fail to meet business needs.

These systems often pose significant challenges, including high operating costs, difficulty integrating with modern systems, and a lack of skilled resources for maintenance.

Evolution of application modernization

Application modernization is not a new concept, but its importance has been amplified in the digital age. Initially, businesses used to modernize apps primarily to reduce the costs and risks associated with outdated technology.

However, the focus has shifted over time. Today, organizations are leveraging modernization as a strategic move to increase business agility, improve customer experience, and drive innovation.

In the early days, modernization often meant a complete overhaul of existing systems - a time-consuming and risky proposition. The advent of new technologies and methodologies has since introduced more nuanced approaches.

For instance, the rise of cloud computing has enabled organizations to incrementally modernize applications by moving them to the cloud. Similarly, the adoption of microservices architecture allows for the modular modernization of large, monolithic applications.

📚 Related: 4 Application Modernization Trends

What technologies require modernization?

  • Monolithic applications: Large, single-tiered software apps that can be broken down into microservices.
  • Legacy programming languages: Older languages like COBOL or Pascal may need to be updated to languages like Java or Python.
  • Outdated databases: Older systems like IBM DB2 or Microsoft Access may need to be migrated to newer systems like PostgreSQL or cloud-based solutions.
  • Client-server architectures: Early web architectures may need to be moved to more scalable and flexible architectures, such as cloud-based or microservices architectures.
  • Legacy middleware: Older technologies like CORBA could be updated to more modern middleware technologies like RESTful APIs.
  • Non-responsive web design: Websites not designed for various screen sizes that would benefit from implementing responsive web design.
  • Lack of automation: Older systems rely heavily on manual processes that could be improved by implementing automation technologies.

Modernizing these applications involves a range of strategies, from rehosting on a new infrastructure, to completely rebuilding the with modern features and capabilities.

The choice of strategy depends on the specific needs and constraints of the business, including budget, time, and available resources.

Application modernization approaches

When it comes to application modernization, there isn't a one-size-fits-all strategy. The approach chosen depends on the business goals, the current state of the application, and the specific issues that need to be addressed.

The 5R (or 6R) framework is a popular approach developed by Gartner and AWS:

  • Rehosting: Also known as the "lift-and-shift" approach involves moving an application from its current environment to a new one. It's typically a cloud-based infrastructure that requires no design modification. This can be a quick and cost-effective way to start the modernization journey, but it may not fully leverage the benefits of the cloud.
  • Replatforming: Moving to a new runtime platform while making minimal changes to the code. For example, you might move a Java application from an on-premises server to a Platform as a Service (PaaS) offering. This can provide some cloud benefits while minimizing changes to the application.
  • Rearchitecting: Making significant changes to the application's architecture to take full advantage of cloud-native features, such as scalability, resilience, and agility. This can be a more complex and time-consuming approach, but it can also provide the most substantial benefits.
  • Rebuilding: Re-writing the application from scratch using modern technologies. This approach allows for the most flexibility and can result in an application that is fully optimized for the cloud. It can also be the most expensive and risky approach.
  • Replacing: Retiring the legacy application and replacing it with a modern, off-the-shelf solution. This can be a good option if there's a readily available solution that meets the business's needs. But it can also require significant changes to business processes.

Each of these strategies has its trade-offs, and the best approach depends on the specific circumstances.

In some cases, a combination of these approaches might be used. For example, you might rehost some apps to achieve quick cost savings, while rearchitecting or rebuilding others to take full advantage of the cloud.


Key modernization technologies

Modernizing applications often involves adopting new technologies that can help streamline the process and maximize the benefits.

  • Cloud platforms: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) provide the infrastructure and services that support modernized applications. They offer capabilities such as compute power, storage, and databases, as well as higher-level services for machine learning, data analytics, and more.
  • Containers and microservices: Technologies like Docker and Kubernetes help in creating and managing containers, which are lightweight. Standalone packages contain everything an application needs to run. This makes applications more portable and scalable. Microservices architecture, where an application is broken down into smaller, loosely coupled services, can also enhance scalability and agility.
  • DevOps tools: Tools like Jenkins for continuous integration, GitHub for version control, and Ansible for configuration management, can automate and streamline the development process.
  • APIs and integration tools: APIs allow different software applications to communicate and work together. Integration tools like MuleSoft or Dell Boomi can help connect your modernized applications with other systems in your IT environment.
  • Low-Code/No-Code platforms: These platforms allow developers to create applications with minimal hand-coding, using visual interfaces. They can speed up the development process and make it more accessible to non-developers.
  • Modern programming languages: Languages like Python, JavaScript, or Go are often used in modern application development due to their efficiency, versatility, and strong support.

It's important to remember that the choice of technologies should be guided by your specific needs and circumstances, rather than following trends. 

Key app modernization tools

In addition to the technologies mentioned, there are specific tools designed to assist with the process of application modernization.

These tools can help organizations manage their application portfolios, understand their current IT landscape, and plan their modernization efforts effectively.

  • Enterprise architecture tools: A tool like LeanIX EAM provides a comprehensive view of your enterprise architecture, aiding in strategic IT planning and identifying areas ripe for modernization. Get a deeper dive into selecting an enterprise architecture tool.
  • Cloud migration tools: When it's time to transition apps to the cloud, cloud migration tools become invaluable. They simplify the process by offering features for discovery, migration planning, and workload mobility.
  • Application portfolio management tools: To effectively prioritize modernization efforts, application portfolio management tools, such as LeanIX EAM are key. They help discern which applications should be modernized, replaced, retired, or maintained.
  • Modernization platform tools: The actual task of modernizing apps is facilitated by modernization platform tools. They provide a platform that supports various modernization strategies, including rehosting, re-platforming, rearchitecting, or rebuilding applications.
  • Code refactoring tools: In many modernization efforts, refactoring code to improve its structure without changing its behavior is crucial. Code refactoring tools assist developers in this task, enhancing the efficiency and maintainability of the code.
  • Container orchestration tools: With the rise of containerization and microservices, container orchestration tools have become indispensable. They handle the deployment, scaling, and load balancing of containers, fostering the development of scalable and resilient modern applications.
  • API management tools: APIs act as connective tissue in modern, distributed applications. API management tools ensure these APIs are designed, deployed, secured, and monitored effectively, delivering the required functionality and performance.

Choosing the right tools can significantly impact the success of your application modernization efforts.


The business case and benefits

Application modernization is a strategic investment that yields significant benefits across different levels of an organization. The importance of this process is reflected in industry trends and forecasts.

According to Gartner, 85% of organizations will modernize their applications with a cloud-first approach by 2025.

Furthermore, the 2023 Gartner CIO and Technology Executive Survey results show 46% of organizations will increase their spending on application modernization, and 50% will increase their spending on cloud platforms in 2023.

“Many organizations are dealing with bloated application portfolios with high technical debt, risk and cost. In such a case, a modernization initiative with additional funding is required to “cure” the application portfolio from intolerable risks and obstacles.” [Source: Gartner]

Here's how application modernization impacts development teams, IT, and business leaders:

Benefits for development teams

  • Enhanced productivity: Modern apps and tools can streamline the development process, automate repetitive tasks, and reduce the time spent on debugging and maintenance.
  • Improved collaboration: Modern development practices, such as DevOps and Agile, promote a culture of collaboration and continuous improvement, fostering better communication and teamwork.
  • Skill development: Working with modern technologies and methodologies can help developers broaden their skill sets and stay current with industry trends.

Benefits for IT

  • Increased operational efficiency: Modern applications are easier to maintain and update, reducing the time and resources required for these tasks.
  • Risk mitigation: Outdated applications can pose security risks and compliance issues. Modernizing these applications can help mitigate these risks and ensure compliance with current regulations.
  • Improved infrastructure management: Modern applications, particularly those hosted in the cloud, can simplify infrastructure management and provide better visibility and control over IT resources.

Benefits for business leaders

  • Business agility: Modern applications can be updated and scaled independently, allowing for faster deployment of new features and improvements. This helps businesses respond more quickly to market changes.
  • Enhanced customer experience: Deliver a better user experience, supporting mobile and web interfaces, offering faster response times, and providing more personalized and interactive experiences.
  • Innovation and competitive advantage: Modernizing applications can unlock new capabilities, such as AI, machine learning, and advanced analytics. These can drive innovation and provide a competitive edge.
  • Sustainability: Applications, particularly those hosted in the cloud, can be more energy-efficient than their on-premises counterparts, contributing to an organization's sustainability goals.

While the benefits of application modernization are clear, it's important to note that the process requires careful planning and execution.

It's not a one-size-fits-all solution, and what works for one organization may not work for another. Therefore, it's crucial to develop a clear app modernization roadmap that aligns with your business goals and capabilities.


Most common challenges

While the benefits of app modernization are significant, the process is not without its challenges.

Some of the common obstacles that organizations may encounter during their modernization journey are:

  • Understanding legacy systems: Legacy systems can be complex and poorly documented. Understanding how they work and how they're interconnected can be a daunting task.
  • Skills gap: Modernization often involves new technologies and methodologies that your team may not be familiar with. Bridging this skills gap can require significant time and resources.
  • Business disruption: Modernization efforts can disrupt business operations. Minimizing this disruption and managing the change effectively is a major challenge.
  • Data migration: Moving data from legacy systems to new applications is a complex task. Ensuring data integrity and avoiding data loss during this process is crucial.
  • Security and compliance: Modernization, particularly when it involves moving to the cloud, can introduce new security and compliance considerations. Addressing these effectively is critical.
  • Cost management: While modernization can deliver cost savings in the long run, the upfront costs can be substantial. Managing these costs and ensuring a return on investment is a key challenge.
  • Choosing the right approach: There are multiple paths to modernization, and choosing the right one for each application can be complex. Making the wrong choice can lead to wasted effort and resources.

Despite these challenges, the potential benefits of application modernization make it a worthwhile endeavor for most organizations.

With careful planning (next section), the right skills and tools, and a clear understanding of your business needs, these challenges can be effectively managed.


A concise guide to modernizing applications

Application modernization is a complex process that requires careful planning and execution. Here's a high-level guide to help you navigate this journey:

Pre-requisite: Application portfolio assessment

Before you can begin modernizing, you need to understand your current application landscape. This involves assessing your existing applications in terms of their business value, technical condition, and other relevant factors.

LeanIX helps you gain a clear view of your application inventory and identify potential targets for modernization.

Step 1: Identify goals and scope applications

Start by defining what you hope to achieve through modernization. This could be anything from improving operational efficiency to enabling new business capabilities. Also, determine the scope of your modernization effort. Will you modernize all your applications or just a select few?

LeanIX can help here by providing a comprehensive view of your IT landscape, helping you identify which applications would benefit most from modernization.

Scope applications in LeanIX EAM

Scope applications in LeanIX EAM

📚 Related: Application Criticality Assessment

Step 2: Plan transformation roadmap

Develop an application modernization roadmap. This should include timelines, resources required, potential risks, and mitigation strategies.

LeanIX can support this step by providing tools for scenario planning and roadmap visualization, helping you create a clear and actionable transformation plan.

Roadmap with milestones in LeanIX

Roadmap with milestones in LeanIX EAM

Step 3: Create transformations

Begin the modernization process according to your plan. This will typically involve developing new applications or modifying existing ones, testing, data migration, and deployment.

LeanIX can assist by providing a collaborative platform where all stakeholders can track progress and coordinate their efforts.

Application modernization template in LeanIX

Application modernization template in LeanIX EAM

Step 4: Evaluate your target architecture

Once your modern applications are live, it's important to evaluate whether they meet your original goals and expectations.

LeanIX can help here by providing tools for architecture modeling and analysis, helping you assess whether your new architecture aligns with your business objectives.

Visualize landscape change in LeanIX EAM

Visualize landscape change in LeanIX EAM

Step 5: Execute, track, and report

The final step is to execute your plan, track the progress of your modernization efforts, and report on the results.

LeanIX can support this step by providing a centralized platform for tracking and reporting and demonstrating the value to stakeholders.

Roadmap Report in LeanIX EAM

Roadmap Report in LeanIX EAM

📚 Related: Application Modernization with LeanIX


Application modernization is a strategic journey that can unlock significant value, enhancing efficiency, agility, and innovation.

Despite its complexity, with careful planning, the right approach, and supportive tools like LeanIX, organizations can effectively navigate this process.

Free White Paper

The Business Transformation Management Playbook

Plan. Decide. Execute.

Preview the first 8 pages

Page: /

Fill out the form to get the full version

FAQs on Application Modernization

What is application modernization?

Application modernization is the process of updating outdated software applications to improve efficiency, agility, and innovation potential.

Why is application modernization important?

Modernization is crucial for businesses to stay competitive, respond to changes faster, reduce costs, and drive innovation.

How to modernize applications?

Modernizing applications involves identifying goals and scope, planning a transformation roadmap, creating transformations, evaluating your target architecture, and executing, tracking, and reporting your transformation.

How to modernize legacy applications?

Legacy applications can be modernized by assessing their current state, identifying issues, choosing the right modernization approach, and executing the transformation plan.

What is an example of application modernization?

An example of application modernization could be transitioning a monolithic application to a microservices architecture to improve scalability and agility.

What are the 5 Rs of application modernization?

The 5 Rs refer to the main approaches to application modernization: Rehost, Replatform, Rearchitect, Rebuild, and Replace.

What are the challenges in application modernization?

Challenges include understanding the current IT landscape, setting clear goals, planning and executing the transformation, and monitoring and optimizing the new systems.


Free White Paper

The Business Transformation Management Playbook