Intersection – Navigating Market Challenges: Modernisation of Legacy to enable business models and strategy.

As many businesses continue to rely on legacy applications for their critical functions, it's important to recognise the amazing opportunities along with the potential vulnerabilities and limitations associated with these systems. Our team has conducted extensive research, drawing data from diverse sources and harnessing Wipro’s AI360 to pinpoint the top 7 intersections of technology and business focus in Australia for the next 3 years. We've carefully assessed how emerging technology trends can significantly impact the modernisation and de-risking of legacy environments.

In addition to outlining the most influential technology developments for addressing this challenge, our paper delves into the key reasons why legacy applications pose security risks and impede adaptability in business. We also propose approaches to modernisation that can reduce legacy debt and empower new business models to effectively meet the demands of rapidly evolving business requirements.

Business Sentiment:

As we navigate through 2024, surveys of Australian CEOs have revealed a heightened sense of caution and concern compared to 2023, with expectations of moderate business conditions and reduced growth compared to previous years. Furthermore, additional surveys have indicated that 38% of businesses are grappling with cost controls in an inflationary environment.

In light of these surveys and sentiments, it's evident that executives are confronted with several top concerns related to legacy technology:

1.???? Delivering value from Digital Transformation remains a significant challenge. Legacy technology represents an ongoing investment that demands returns and poses challenges from a modernisation standpoint.

2.???? Enterprise transformation is expected to be either close to or entirely self-funding. Prioritising productivity improvements is crucial in achieving a self-funded outcome.

3.???? The escalating sophistication of cybercrime presents an evolving challenge, with executives and boards continually tasked with ensuring readiness for such situations.

These concerns underscore the pressing need for strategic and proactive approaches to modernising legacy technology, ensuring that it not only delivers value but also aligns with the evolving landscape of digital transformation and cybersecurity.

Legacy Applications and Security:

Understanding the reasons behind the security vulnerability of legacy applications is crucial for devising effective mitigation strategies. Here are some key factors contributing to these vulnerabilities:

Outdated Technology:

• Unsupported Software: Legacy systems often rely on outdated software that no longer receives security updates or patches from the vendor, leaving them susceptible to exploits.
• Incompatible Security Solutions: Modern security tools and protocols may not be compatible with older systems, making it challenging to implement current security measures.

Known Vulnerabilities:

• Exploited Weaknesses: Legacy systems may have well-documented vulnerabilities that hackers can easily exploit.
• Lack of Encryption: Older applications might not utilise encryption or other modern security practices to safeguard data.

Complexity and Customisation:

• Custom Code: Highly customised legacy systems can be challenging to update or secure, especially if the original developers are no longer available.
• Integration Challenges: Integrating legacy systems with modern applications can create security loopholes and points of failure.

Limited Monitoring and Incident Response:

• Inadequate Monitoring: Legacy systems may lack the capabilities to effectively monitor and log security events, making it harder to detect and respond to breaches.
• Slow Response: Incident response processes may be slower and less effective due to the complexity and fragility of legacy systems.

Access Control Issues:

• Weak Authentication: Older systems might not support strong authentication methods, increasing the risk of unauthorised access.
• Privilege Management: Managing user privileges and roles can be more challenging, leading to potential over-privileged accounts.

Addressing these vulnerabilities requires a comprehensive approach that encompasses not only technological upgrades but also robust monitoring, incident response capabilities, and access control measures. By understanding and mitigating these risks, organisations can effectively fortify their legacy systems against potential security threats.

Legacy Applications and Adaptability:

Understanding the factors that impede the adaptability of legacy applications is essential for organisations aiming to modernise their technology landscape. Here are some key reasons why legacy applications hinder business adaptability:

Digital Experience:

• Poor User Interface: Legacy applications often feature outdated user interfaces that can hinder productivity and user satisfaction.
• Mobile Incompatibility: Many legacy systems are not designed for mobile access, limiting flexibility and efficiency in a mobile-first business environment.

Inflexibility:

• Rigid Architecture: Legacy systems often feature rigid, monolithic architectures that pose challenges in adapting to evolving business needs or integrating with newer technologies.
• Slow Adaptation: Implementing changes to legacy systems typically demands significant time and effort, hampering the organisation's agility in responding to market or operational changes.

High Maintenance Costs:

• Resource Intensive: Maintaining and updating legacy systems can be resource-intensive, diverting funds and attention away from innovation and growth initiatives.
• Skills Shortage: Finding skilled professionals to maintain and update legacy systems can be challenging, as fewer IT professionals are familiar with outdated technologies.

Data Silos:

• Isolated Data: Legacy systems often operate in isolation, leading to the creation of data silos that hinder comprehensive data analysis and decision-making.
• Integration Barriers: Integrating data from legacy systems with modern analytics and business intelligence tools can be complex and costly.

Regulatory Compliance:

• Compliance Risks: Older systems may not meet current regulatory standards for data protection and privacy, posing compliance risks.
• Audit Challenges: Conducting audits on legacy systems can be more complex and less reliable, making it harder to ensure regulatory compliance.

Addressing these challenges requires a holistic approach that encompasses not only technological modernisation but also strategic resource allocation, talent management, and regulatory adherence. By mitigating these barriers, organisations can enhance their adaptability and position themselves for sustained success in a rapidly evolving business landscape.

Top Technology Trends supporting Legacy Modernisation:

As organisations navigate the modernisation of legacy systems, it's imperative to recognise and harness key technology trends that can drive this transformation. Some of the top technology trends we consider having a significant impact on legacy modernisation include:

1. Continuous Threat Exposure Management (CTEM): CTEM involves the ongoing process of identifying, assessing, and mitigating security risks and vulnerabilities associated with legacy systems. By implementing continuous monitoring, threat detection, and vulnerability management practices, organisations can safeguard legacy applications from evolving cyber threats and security risks.
2. Developer-Driven Self-Service Platform Engineering: This approach enables the acceleration of modernisation and optimisation of legacy systems through self-service platforms and tools. By empowering developers to leverage modern engineering practices and technologies, organisations can facilitate the updating, refactoring, or re-architecting of legacy applications with reduced reliance on traditional IT or operations teams.
3. Industry Cloud Platforms: These platforms offer an alternative to continuously building on legacy systems by providing industry-specific frameworks, processes, policies, and regulatory compliance requirements, extending beyond typical cloud repositioning of applications.
4. Platform Development and Architectural Release: This trend involves the development of a robust and modernised infrastructure that supports the deployment and management of legacy applications. This may encompass migration to platform-based architectures, containerisation, orchestration, DevOps practices, changes in release management, and ongoing application performance monitoring.

In addition to these trends, we have also recommended several existing and proven technologies in further detail in this paper. By strategically leveraging these technology trends, organisations can pave the way for successful legacy modernisation, driving innovation, agility, and resilience in an increasingly digital landscape.

Legacy modernisation strategies:

Embracing technology trends empowers businesses to navigate market challenges, modernise legacy systems, and drive growth and productivity in an uncertain economy. Several pathways support modernisation to reduce vulnerability and enhance business agility. Here are recommended practices from for developing an IT modernisation strategy to reduce legacy debt and enable new business models:

Assess and Understand Current Systems:

• Conduct a Comprehensive Audit: Perform a thorough audit of the existing IT infrastructure to identify outdated components, dependencies, and areas of inefficiency.
• Prioritise Critical Systems: Determine which systems are vital to business operations and should be prioritised for modernisation.

Define Clear Objectives and Strategy:

• Set Goals: Define clear, measurable goals for modernisation, such as improved performance, scalability, security, and cost savings.
• Develop a Roadmap: Create a detailed roadmap outlining the steps, timelines, and resources required for the modernisation process.

Adopt Agile and DevOps Practices:

• Implement Agile Methodologies: Ensure flexibility, faster development cycles, and the ability to respond quickly to changing requirements.
• Adopt DevOps Practices: Streamline development, testing, and deployment processes, promoting continuous integration and continuous delivery (CI/CD).

Leverage Cloud Technologies:

• Cloud Migration: Migrate legacy applications and infrastructure to the cloud to take advantage of scalability, flexibility, and cost efficiency.
• Utilise Industry and Hybrid Cloud Solutions: Gradually transition to the cloud while maintaining critical on-premises systems using hybrid cloud solutions.

Microservices and Containerisation:

• Embrace Microservices Architecture: Break down monolithic applications into smaller, independent microservices for independent development, deployment, and scaling.
• Implement Containerisation: Use containers (e.g., Docker) to package applications and their dependencies, ensuring consistency across development, testing, and production environments.

API-First Approach:

• Develop and Expose APIs: Facilitate integration between legacy systems and new applications, enabling seamless data exchange and functionality.
• Implement Robust API Management: Monitor, secure, and manage APIs effectively to ensure seamless integration.

Data Modernisation:

• Migrate and Cleanse Data: Migrate data from legacy systems to modern data platforms, ensuring data quality and consistency.
• Implement Data Analytics and BI: Gain actionable insights from data by implementing modern data analytics and business intelligence (BI) tools.

Security and Compliance:

• Apply Modern Security Best Practices: Implement encryption, multi-factor authentication (MFA), and regular security audits.
• Ensure Regulatory Compliance: Comply with relevant regulations and standards to avoid legal and financial penalties.

User-Centric Design:

• Improve User Experience (UX): Redesign interfaces and workflows to be more intuitive and efficient.
• Ensure Mobile Accessibility: Support a mobile-first business environment by ensuring applications are accessible on mobile devices.

Continuous Monitoring and Optimisation:

• Implement Performance Monitoring: Continuously monitor system performance, user activity, and application health.
• Establish Feedback Loops: Identify areas for improvement and iterate on solutions by establishing feedback loops with users and stakeholders.

Training and Change Management:

• Provide Employee Training: Upskill employees on new technologies and processes through training programs.
• Develop Change Management Strategy: Help employees adapt to new systems and workflows by developing a change management strategy.

Partner with Experts:

• Consulting and Partnerships: Engage with consulting firms, technology partners, and vendors who specialise in IT modernisation to provide expert guidance and support throughout the process.

In conclusion, the modernisation of legacy technology is not just a necessity but a strategic imperative for businesses aiming to thrive in today's rapidly evolving digital landscape. By embracing technology trends, adopting best practices, and partnering with experts, organisations can effectively reduce legacy debt, enhance adaptability, and drive innovation. It's crucial for businesses to recognise the potential vulnerabilities and limitations associated with legacy systems, particularly in terms of security risks, adaptability, and high maintenance costs. By strategically leveraging emerging technology trends, such as continuous threat exposure management, cloud adoption, and agile development practices, organisations can pave the way for successful legacy modernisation, positioning themselves for sustained success in an increasingly technology-driven business environment. The journey towards modernisation is an opportunity to not only mitigate the challenges posed by legacy technology but also to unlock new avenues for growth, innovation, and competitiveness. Embracing this transformation is not just about updating technology; it's about future-proofing the business and enabling it to thrive in the face of evolving market demands.

About the Authors

Nilesh Sinha

Nilesh is a seasoned ICT delivery leader with a passion for leveraging technology to drive innovation and growth. His expertise lies in aligning technology solutions with business objectives, driving organisational change, and fostering a culture of continuous improvement. ?With his commitment of staying at the forefront of technological advancements and his ability to inspire and lead teams, he has been instrumental in driving successful large and complex programs.

Bernadette Harkin

Bernadette is passionate about staying abreast of technological advancements to drive strategic execution. She brings a pragmatic approach to integrating professional skills and methodologies with technology to achieve successful Digital Transformation. With a background in professional services as an ASX NED and a global technology Executive, Bernadette possesses a strong digital literacy that she brings to both the boardroom and clients. Her extensive international experience in large corporate structures and start-up ventures has equipped her with the expertise to lead client-facing organisations, operations, advisory, and transformation initiatives, ultimately driving growth and scalability.

This paper was compiled with the assistance of Wipro’s AI360 platform.