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What is application modernization?

Application modernization is the process of updating outdated business systems and applications. There are many ways to modernize your applications, from integrating existing systems with APIs to doing a full rip-and-replace of infrastructure and building an entirely new application architecture.

In this article, we’ll explore the most common approaches to application modernization to see what may work best for your business.

Building an application modernization strategy

Modernizing applications begins with auditing your organization’s application portfolio. By running the audit, you can identify: which systems are most in need of modernization, which would be easiest and most cost-effective to modernize and which could yield the biggest benefit. Once you have performed your audit, you can develop a strategy that serves your stakeholders and supports your business goals.

All modernization strategies add varying degrees of benefits and value, but opting for a holistic approach betters your odds of success over ad hoc or piecemeal modernization efforts.

This is because an effective, holistic roadmap for modernization is purpose-built with particular business processes in mind and takes into account the needs of everyone in the organization. A good application modernization plan carefully considers the role of customers, end-users and other stakeholders — as each will interact with and benefit from a well-executed modernization plan.

Common application modernization strategies

Leave applications in place, but expose their functionalities as APIs

Oftentimes, legacy applications can work just fine. But when siloed, they lack interoperability, don’t share data and have too many intermediary processes. In many cases, legacy systems can stay in place with an API that brings their functionalities together across systems. Modernizing existing apps with APIs is usually the fastest and most cost-effective way to update legacy applications that still serve their purpose well.

Migrate on-premises apps to the cloud

Your business can modernize applications by moving them from on-premises to the cloud. On-premises applications tend to be limited and inflexible, usually because they are less likely to be integrated into a larger application environment. By taking advantage of the cloud to advance and modernize applications, businesses can introduce more flexibility and scalability in their infrastructure. This could mean buying into cloud-native software-as-a-service (SaaS) apps or rehosting existing applications in the cloud.

Break down monolithic applications into microservices

Another common way to modernize applications is to replace legacy systems with more portable, lightweight and interconnected services. Instead of working with large, brittle applications, organizations can replace them with a series of modular new applications — often united by one or more APIs.

Tearing down big, monolithic services to make way for smaller systems can accelerate workflows and increase flexibility. These more adaptable applications, known as composable applications, take advantage of microservices, making them more portable and flexible.

Automate business processes

Automating business processes is an effective way to increase value as you modernize. Many legacy systems include what’s known as “swivel chair processes” — a name that recalls a worker in a desk chair looking at data on one screen — and swiveling their seat over to enter that data into another system. Loan origination systems in finance, for instance, organize and automate tasks associated with a specific loan. Tasks that were once phone calls, spreadsheet entries and other manual processes can be handled more accurately and more quickly by an automated system, freeing up financial workers to do other things.

By automating these processes, either with cloud-based or on-premises applications, organizations can save everyone valuable time, reduce instances of human error and free up team members to focus on more important tasks.

The benefits of application modernization

Application modernization has benefits across the business environment, from initial software development all the way to customer experience. Everything on that path relies on data integrity and efficiency, and application modernization can improve the quality of data across workflows. The bottlenecks that arise from legacy systems nearly always compromise the end result of any project, and modernization is a solve for those bottlenecks.

The truth is: Most legacy systems are not integrated. Piecemeal systems can increase the risk of errors. Incorrect or incomplete data impacts the integrity and functionality of the entire system. Even without errors, applications that don’t talk to each other can slow down processes.

Ultimately, modernizing applications can:

  • Automate business operations and processes
  • Speed up systems
  • Eliminate redundant functions to save on costs
  • Improve the experiences of everyone involved
  • Help mitigate data errors or data loss

Cloud services are a key part of application modernization.

Application modernization customer success stories

Application modernization takes many forms. It’s a process that matters for every business that contends with critical applications reaching the end of their life cycle. Industries with important customer-facing components — like finance and retail — need to constantly modernize their applications to meet customer expectations.

Discount Tire

Discount Tire has more than 900 stores in 28 U.S. states. The company needed to be able to compete with other high-profile online tire dealers. To do so, they wanted to create a comprehensive view of the company, its supply chain and its stores. By integrating a new SAP for Retail system with data from the entire organization and building new third-party applications in-house, Discount Tire saved hundreds of hours managing their data. And they did it all while ensuring that the data flowing into their new system was trustworthy and reliable.


Copic provides liability insurance to healthcare providers, hospitals and healthcare organizations across Colorado and Nebraska. To better react to dynamic markets, they needed improved, faster access to actionable business information. By migrating from on-premises to cloud operations, they could automate old manual maintenance tasks and save on customer solutions. They did it all in just nine months with two developers and achieved complete ROI in under two years.

Ongoing modernization for ongoing optimization

Letting go of old apps, processes and systems can be a challenge. It frequently involves reinvestment, rearchitecting and retraining. But, ultimately, it’s worth it. Modernization in the form of APIs, iPaaS or cloud migration leads to more efficient and effective business processes for all stakeholders in the long run.

Application modernization audits and upgrades are now a routine part of maintaining a healthy business. By deploying more modern applications that add the right features — not just new features — and constantly looking for opportunities to improve across your tech stack, your business can remain agile, relevant and sustainable for years to come.

Explore why Gartner consistently names Informatica as a leader in cloud migration.