Modernizing legacy systems

Update your historically grown legacy system with system and software modernization

Just about every company has to deal with modernizing its legacy systems at some point. The reasons for system or software modernization are diverse and multi-faceted. A discontinued core technology, maintainability or security issues, or Software as a Service as the goal of a new business model are just a few examples.

Fraunhofer IESE advises and supports companies of all kinds, from SMEs to large corporations, in their projects to modernize their legacy systems. In doing so, we contribute our expert knowledge from all areas of software and systems engineering in order to develop customized approaches and solution concepts. Since technology never exists in isolation, we always consider the environment as well, such as user experience, business model, and team and company organization. After all, only a holistic approach will lead to sustainable success. 

Fokusthema: Systemmodernisierung / Legacy-Systeme, Fraunhofer IESE
Mit System- und Softwaremodernisierung Ihr historisch gewachsenes Altsystem aktualisieren

What are legacy systems? What is legacy modernization?

Definition Legacy Systems

Many companies have systems that have been used, operated, and maintained for a long time. This is typically referred to as “legacy systems” or “legacy software”. While this term often has a negative connotation in German (where the corresponding term translates as “inherited liabilities/burdens” or “old systems”), it has a thoroughly positive meaning in English: “Legacy” or “inheritance” are terms that often describe something of high value. This can be applied well to systems, because it is often the legacy systems that are at the core of a company, are extremely successful, and generate high value.

Legacy Modernization

This long lifetime of software and systems requires continuous maintenance. Nevertheless, at some point in the lifecycle of a software system, there are almost always situations that make a fundamental modernization of the system or of an entire system landscape necessary. Examples include lack of maintainability, need to replace a core technology, or even a change in the underlying business model. 

A central characteristic of legacy modernization is that it goes beyond purely functional evolution of the system and that other aspects such as restructuring or paradigm shifts are in focus. This is often accompanied by increased technical and organizational complexity, which makes any modernization a challenging undertaking. Still, such an investment in the modernization of a legacy system is well worth it in many cases, because it creates a solid foundation for the ongoing and sustainable success of the core systems in the company.  

Examples from IESE for the modernization of legacy systems

The modernization of legacy systems affects almost all companies as well as all types of systems, whether embedded systems, large information systems, data-intensive cloud systems, or mobile applications. Fraunhofer IESE has already worked with several customers on a wide variety of modernization projects.

FibuNet offers a very successful software for financial accounting, which has been developed successfully over many years and is used by more than 1,000 customers. In order to take advantage of new opportunities, FibuNet decided to modernize their software by developing a web client. By developing a user experience concept tailored to the specifics of the web, selecting a suitable web technology based on the sound assessment of available options, and analyzing the impact on the system’s architecture, Fraunhofer IESE helped lay the foundation for implementing the modernization of their legacy system.

Ellenberger GmbH & Co KG is a mechanical parts manufacturing company based in Kaiserslautern, Germany. One of their biggest challenges is to quickly process a large number of customer orders with different lot sizes based on existing capacities and available resources. The goal of this project was therefore to map manufacturing islands and their machines and tools as Digital Twins and thereby enable semi-automatic resource-based feasibility checks based on real-time production data. The information modeling of the Digital Twins is done via the implementation of the standardized asset administration shell provided by BaSyx.  

DigiPro4BaSys/HÄFNER Präzisionsteile Oberrot
HÄFNER Präzisionsteile Oberrot GmbH is a producer of high-precision weights in single to small lot productions, partly highly individualized. This means that a wide variety of different geometric forms of weights are manufactured. The weights are regularly recalibrated after the initial calibration, with the interval being determined by the customer. In addition, HÄFNER Präzisionsteile Oberrot produces precision parts (e.g., for transmissions), where various kinds of data are recorded in a CAQ (Computer-Aided Quality) system during quality assurance. This involves quality data generated during measurements in special measurement laboratories. In both cases, data must be exchanged across company boundaries. The aim of this project is to use Digital Twins at precisely this point as the basis for a service platform for exchanging data with customers. In the form of the asset administration shell, this is one of the central concepts of Industrie 4.0.  

Cranimax GmbH develops the CraneBee software for the construction industry, which enables its customers to plan the deployment of mobile cranes. Cranimax decided to modernize its business model and, along with this, to offer the software as Software-as-a-Service in the cloud in the future. Cranimax wants to take advantage of this opportunity to also improve its legacy application with respect to various quality properties, such as maintainability. As part of this modernization project, Fraunhofer IESE supported Cranimax in the development of the new business model as well as in the design of the future software architecture and the selection of a new technology. In addition, Cranimax has established a state-of-the-art development approach with agile practices together with Fraunhofer IESE in order to modernize the development process in line with the system. In this way, Cranimax has positioned itself and its software well for the future.  


Back to Overview

Fokusthema: Systemmodernisierung / Legacy-Systeme, Fraunhofer IESE
Mit System- und Softwaremodernisierung Ihr historisch gewachsenes Altsystem aktualisieren

What are the reasons for modernizing legacy systems? Where are the opportunities for companies in this regard? 

There are numerous and very different reasons why legacy systems need to be modernized: 

The software needs to be improved

Despite careful care and maintenance, it can happen that the software itself needs to be fundamentally improved. There are various reasons for this: One example are technologies that were used in the realization of the software. Technologies, whether open source or commercial, are themselves subject to a lifecycle. If a technology is no longer being developed further or if it is simply not possible to find experienced developers, companies are forced to replace such a technology. Another reason may relate to the internal quality of legacy systems. Software is subject to a continuous erosion process in which the internal quality of the software can deteriorate successively. A degenerating structure of the system, accumulation of technical debt, increase of code duplicates, departure of knowledge carriers, or lack of documentation can be important factors. Drastically deteriorating maintainability, decreasing stability, and longer release cycles are typical effects. In addition, deficiencies in runtime quality may be reasons that make it necessary to improve legacy software. Such deficiencies must be considered particularly critical because they are noticeable to the end users when they use the software. Examples include poor performance, security gaps, or a poor user experience. These deficiencies can have a serious impact on the success of the software product.


New opportunities are to be exploited

Technologies and business models are evolving continuously. For a company to be successful, it is crucial to continuously check such new developments and examine them with regard to the further development of its products. Offering software in the form of Software-as-a-Service or establishing a Digital Ecosystem are examples of modern business models that have a formative influence on a company’s system landscape. Technological innovations include, for example, cloud and serverless computing, Machine Learning, or diverse new communication technologies such as 5G. These evolutions often necessitate a fundamental modernization of legacy systems, which frequently also affects the organization of the company itself. 


Costs are to be reduced

Many legacy systems are still operated on cost-intensive hardware or in expensive execution environments. In the banking and insurance sectors, for example, mainframe systems are often still in use. Many companies are therefore looking to operate on commodity hardware or in the cloud in order to reduce costs. In most cases, such a change of the execution environment also entails a fundamental technological modernization of the legacy systems in question. In development, too, there may be numerous undesired cost drivers. For example, the acquisition of companies that bring their own applications with them, or “historical reasons” often lead to the situation that a company has several applications for the same use case or even completely separate variants of the same product. Maintaining and further developing these in parallel requires a lot of effort and is expensive. In such cases, companies strive for consolidations, i.e., modernization projects in which systems and components are merged or replaced in order to reduce the costs caused by multiple developments. This often calls for product line or modular approaches.


Time-to-market is to be improved

Time-to-market, i.e., the point in time and the intervals at which new solutions and functionalities are available, is becoming ever more important for successful survival on the market. This is particularly true for Digital Ecosystems. Successful companies today use Continuous Integration and Continuous Delivery approaches to release new features in their applications several times a day. In the process, they try out new functionalities, make experiments, collect data, and continuously reinvent their applications. And so the expectations of customers and users grow as well. Such speed poses a special challenge for almost all areas of development, testing, deployment, and operation of the system for a company. The establishment of such a release cycle therefore often requires profound modernization, not only of the application itself, but also of the organization as well as the processes and tools used by the company. 


Opportunities are to be seized

Modernizations of legacy systems are more often than not driven by constraints. Nevertheless, it is advisable to see modernization not only as a necessary evil, but also as an opportunity to position the legacy system and the entire company well for the future. New technological developments, e.g., in the sense of comprehensive networking, Machine Learning or Augmented Reality methods, as well as innovative business models open up numerous new possibilities. In addition, modernization offers the opportunity to rethink fundamental assumptions and throw unnecessary ballast overboard.    


Back to Overview


What are challenges in modernizing legacy systems?

Legacy modernizations are demanding projects, often even more demanding than pure new developments. The reasons for this are numerous different challenges. 

High-risk projects

Modernizing legacy systems often means making changes to the foundation of applications and usually affects many system parts. Also, it often involves the use of previously unknown technologies and paradigms. 

In many cases, not only the system (software, hardware, and electronics) is affected, but also the company itself. This makes system modernizations complex, long-running, and cost-intensive projects that have a risk of failure that should not be underestimated.

Existing system

Legacy modernizations are often challenging projects because companies have to consider their legacy systems and therefore start from a suboptimal starting point. While an existing system provides security as a result of accumulated experience, it also narrows the solution space, generates additional effort, and increases complexity. In most cases, important information and contact persons are no longer available. Furthermore, modernization often makes it necessary to part with existing processes and structures, which is difficult for many companies.

Parallel operation of
legacy system and new system

Modernization of legacy systems is carried out in parallel with the ongoing operation of the legacy system and is thus comparable to open-heart surgery. This is a challenge because modernization, like ongoing maintenance and further development, ties up capacity. The new system and the legacy system compete for the time of the same employees. Therefore, a suitable transition and migration strategy must be developed so that the transition can succeed.

Clear goals

In order to make the modernization of a legacy system a success, it is essential to define a clear goal and thus also to leave out anything that is unnecessary. Otherwise, there is a risk that such projects will never come to an end. A clear definition of the goal includes determining which success criteria are to be achieved and which aspects are to be considered in the core and context of the system. So the question arises as to the scope of the modernization: Should only a technical modernization be performed, or should the user experience or even the business model be changed?

Different priorities

The definition of goals is made more difficult by the different stakeholders in the company. Different people set different priorities and therefore assess different modernization goals very differently. These different assessments must be consolidated and evaluated so that the company can benefit in the best possible way from a legacy system modernization. After all, only in the rarest of cases is a system modernization a purely technical project.

Unknown field

Larger companies and corporations have often carried out numerous modernization projects. However, when small and medium-sized companies tackle system modernizations, they often enter uncharted territory.

Legacy system modernizations have a high level of complexity and many pitfalls. Also, modernization often involves the use of new technologies or approaches that the company has no experience with. Little experience usually increases the risk of failure.

Profound and far-reaching effects

The reasons for modernization can vary, but the causes are never local. Legacy modernizations therefore often affect numerous parts of the system and cause profound changes. But in many cases, the effects are not limited to the system itself. Conway’s Law applies to modernization as well. Consequently, the impact of the modernization on the company’s organizational structure must also be considered and changed, if necessary.

Where does my company stand in terms of legacy system modernization?

Whether you use software on a large scale in your company or develop software yourself – sooner or late you will have to deal with the modernization of your legacy systems. With the following four phases, you can easily classify where your company currently stands in terms of system modernization.


1 | My company has not addressed legacy system modernization yet

 If there is any software in the company that has been operated, developed, and maintained for a number of years already, it is highly likely that a certain need for modernization already exists. Why not talk to different stakeholders of your system and ask about needs for improvement? This will enable you to quickly identify the greatest modernization needs.


2 | My company has identified a need to modernize our legacy systems

 This means that you have already taken the first step towards a more modern system. You should now analyze exactly where you currently stand with your system and what exactly the causes are of the identified modernization needs. This is the only way you can plan and implement a targeted modernization project.  


3 | My company has performed an as-is analysis of our legacy systems

Then you now know exactly where to start in order to modernize your legacy system as effectively as possible. As the next step, you should define clear goals derived from the causes. Based on this, you should agree on a modernization strategy that will allow you to achieve these goals. This includes determining exactly which software engineering activities are required to achieve them.  


4 | My company has defined goals for modernizing our legacy systems and determined an associated modernization strategy

Then roll up your sleeves and implement your modernization strategy. But do keep in mind that modernization is not an end in itself and only do things that will bring you closer to your goals; otherwise you will run the risk of never finishing. 


Back to Overview

How does IESE support my company in the modernization of legacy systems? 

No matter in which phase of your modernization project you are: Fraunhofer IESE is the ideal partner for you company. 


As an institute for innovation, systems and software engineering, Fraunhofer IESE is ideally positioned to support you in the modernization of your legacy systems – starting with the initial intent and continuing throughout the entire implementation period. In doing so, we cover a wide range of services. We can help with strategic decisions, assist with the design and construction of the target state of your system, and clarify questions regarding the technical realization with the developers. 

Tailored to your needs, we offer different types of cooperation:

  • We completely take over certain tasks for you
  • We actively support you in your tasks, work together with you, and provide guidance to your team
  • We teach you our methods so that you can apply them on your own


In the graphical overview below, you can see the central activities in the modernization of legacy systems.
Our services with which we can support you in this process are explained below the graphic.

Grafik Leistungen des Fraunhofer IESE zur Modernisierung von Legacy-Systemen
© Fraunhofer IESE
Grafik Leistungen des Fraunhofer IESE zur Modernisierung von Legacy-Systemen
Blauer Kreis, Nummer 1

As-is analysis and cause analysis 

In order to be able to define a solid modernization strategy and lead your modernization project to success, the current state of the legacy system must first be determined and the causes of existing problems must be analyzed. We help you with this and bring a whole set of different tools with us for this purpose: For example, we conduct interviews with stakeholders, examine code quality, or check how well quality properties are understood and whether the architecture concepts are suitable for fulfilling them. But of course we only do what brings us closer to our goal in your modernization project in the best possible way, and leave out anything that is unnecessary. 

Blauer Kreis, Nummer 2

Definition of a modernization strategy 

Setting goals and defining a solid strategy forms the basis for successful legacy system modernization. That is why we support you right from the start. We work with you to develop a vision for your future product, examine your business model, look at the competition, and analyze possible modernization options. In particular, together with you we address the question of whether to rebuild or build new. Together we develop a solid modernization strategy that makes your system and your company fit for the future.  

Blauer Kreis, Nummer 3

Implementation of the modernization of the legacy system  

Together with you, we conduct the modernization of your legacy systems. We are happy to take on the challenging issues, develop solid solution concepts for them, and demonstrate their feasibility with prototypes. With our experience from the various disciplines of software and systems engineering, we find solutions for the most diverse modernization challenges. For each task, we bring the appropriate experts, for example for business models, architecture, reuse and modular approaches, user experience, simulation, functional safety and IT security, hardware and memory technology, or different programming languages and development technologies. After the definition, we accompany you and your team during the implementation of the concepts in your system.  

Blauer Kreis, Nummer 4

Modernization of the company 

Conway’s Law states that organizations are forced to create system designs that reflect the communication structures of that organization. That is, the design of organizations and the design of systems are interdependent. This is also true in modernization. Therefore, we always keep an eye on the company in our modernization projects. Together with you, we look at the organizational structure, the roles and processes in your company, and ensure that these fit the vision of the modernized system. It is not uncommon for software modernization to be accompanied, for example, by teams being restructured, responsibilities being changed, or agile approaches being introduced into the development process.  


In order to bring the newly developed systems or system parts into productive use, data must be migrated and users must be introduced to the new system. Whether Big Bang/Cold Turkey, Chicken Little, or Butterfly – we work with you to develop a migration strategy that is feasible and provides the best possible experience for your users. 


Back to Overview

Why should my company collaborate with Fraunhofer IESE to modernize legacy systems? 

Every system needs to be modernized at some point. However, legacy modernizations do not have to be a necessary evil, but can also be an opportunity to question assumptions, rethink things, and position yourself well for the future.  

Fokusthema: Systemmodernisierung / Legacy-Systeme, Fraunhofer IESE
Fokusthema: Legacy-Systeme modernisieren

Our contribution to your successful legacy modernization 

We always remain neutral.  

We have no tool that we want to sell, and are not committed to any method. This means that we will develop a customized approach for your specific challenges, the characteristics of your system, and the particularities of your company. This enables you to make the best possible progress.


We contribute experience from many projects and domains. 

This helps you avoid repeating mistakes that other companies have already made, with painful and costly consequences. Regardless of whether your company is an SME or a large enterprise – we have the experience to flexibly adapt to your requirements.


We support you from strategic decisions to technical implementations, from the start of your modernization project to migration and beyond.  

In this way, you get yourself a strong partner who takes an integrated and coordinated view of the various complex challenges. At the same time, you avoid having to find a specialized partner for each task and having to invest a lot of effort into coordinating all partners.


Using profound analyses, we find the real causes of the problems. 

In this way, we align all activities with the goal and ensure that you will achieve an actual improvement of your systems in the end. 


We are immune to hypes and buzzwords. 

Claims that you have to do microservices or DevSecOps today do not count for us. We keep track of new developments and trends, but in our projects, we only use what fits and promises to provide added value. 


We do not only look at the technology.

User experience, business model, and the organization of the company are just as important for us as a solidly constructed new system. This is the only way to ensure that your system modernization will lead to sustainable success. 


We support you in leading your systems into a successful future! 

It does not matter whether you...

  • are just realizing that you need to do something to modernize your legacy systems and want to discuss possible options,
  • are planning to modernize and would like assistance in the development of a solid strategy,
  • have already set your goals and are looking for experienced support in software and systems engineering,
  • have any interesting ideas and questions and would like to discuss them with us.

Contact us!


We will be happy to support you and make time for you! Schedule an appointment with us, by email, phone, or via LinkedIn.

Which references does Fraunhofer IESE have regarding system modernization?

Below are some examples of system modernization projects with our customers and selected research projects.

Customer Statement

“We cannot imagine who could have supported as well as Fraunhofer IESE did, with a comparably well-founded understanding of technology, such multi-layered application experience, and a neutral point of view all at the same time.”

Ralf Graap
Director, FibuNet GmbH


FibuNet GmbH

Fraunhofer IESE provides support in the modernization of the FibuNet software with a user experience (UX) concept, new web technology, and the architecture design.

Automotive & Mobility


Fraunhofer IESE supports CRANIMAX in the migration of an existing desktop application to a Software-as-a-Service (SaaS) solution.

Machine and Plant Engineering / Industrie 4.0

HÄFNER Success Story

HÄFNER Präzisionsteile Oberrot GmbH is performing a retrofit with Fraunhofer IESE using Digital Twins to enable a holistic overview of the factory. 



Lufthansa AG

Fraunhofer IESE supported AG in the selection of a suitable system technology for the replacement of an operative system.

Customer Statement

“The performance of the team was impressive, as a sound basis for proceeding further could be created on a very professional level within a very short time.”


Michael Nachtigäller
Deutsche Lufthansa AG

Machine and Plant Engineering / Industrie 4.0

BasyPaaS with Ellenberger

Realization of services-based production – with BaSys 4.0 to Production-as-a-Service



Listen instead of reading

In the MORGEN DENKER podcast, Dr. Dominik Rost and Dr. Matthias Naab explain how Fraunhofer IESE can support you in modernizing your legacy systems.