Modernise or Stagnate: Why Enterprises Must Prioritise Application Modernisation Now

Summary 

Enterprise leaders grappling with ageing systems, rising costs, and changing customer expectations must read this. This article explains why modernising legacy applications is not a tech luxury but a business necessity in 2025. It is essential to unlock agility, resilience and competitiveness.

Key Findings 

1. Over 70% of IT budgets are spent maintaining legacy systems 

2. Legacy applications limit scalability, security and integration with modern tech stacks 

3. Cloud-native and microservices-based architectures enable faster innovation and lower costs 

4. Modernisation boosts customer experience and employee productivity 

Recommendations 

1. Assess legacy systems for business impact and modernisation urgency 

2. Adopt a phased, value-driven approach to application modernisation 

3. Leverage cloud-native platforms and microservices architecture 

4. Prioritise cybersecurity and data compliance during modernisation 

5. Partner with experienced consultants to accelerate outcomes and manage risk 

Analysis 

The Modernisation Imperative 

Many large enterprises are still heavily reliant on legacy applications. These are systems built over a decade ago, often monolithic, hosted on-premises, and developed in outdated languages. While these systems may be functional, they lack the flexibility, speed, and scalability needed in today's digital economy. They also pose security and compliance risks due to unsupported components and fragile integrations.

A 2023 Gartner study noted that “through 2026, 80% of organisations will face cost and complexity challenges from legacy systems, forcing them to modernise to remain competitive.” The rise of generative AI, API-driven platforms, and customer expectation for real-time, omnichannel experiences has widened the gap between what legacy applications can deliver and what businesses need. 

Finding 1: Legacy Systems Drain Budgets and Agility 

Most CIOs admit that a significant chunk of their IT spend, often over 70%, goes into just “keeping the lights on” with legacy applications. These systems demand niche skills to maintain, are brittle to update, and often require hardware investments to scale.

This cost burden limits the funds available for digital innovation. Worse, it delays time-to-market for new features, stifling the enterprise’s ability to respond to changing market conditions.

Recommendation: Begin with a robust application portfolio assessment to identify high-cost, low-value systems that are prime for modernisation. 

Finding 2: Limited Integration and Scalability 

Legacy systems are often closed, with minimal API support or ability to integrate with modern platforms like SaaS products, analytics engines, or IoT devices. Scalability is limited. A peak in demand may crash an old system or require expensive vertical scaling.

In contrast, modern architectures, particularly microservices deployed on Kubernetes or serverless platforms, allow horizontal scaling, container-based deployment, and real-time integration.

Recommendation: Shift to microservices and cloud-native models to unlock on-demand scalability and integration with modern digital ecosystems. 

Finding 3: Security and Compliance Gaps Are Widening 

Outdated applications often run on unsupported OS or frameworks, making them prime targets for cyber threats. Furthermore, they lack the agility needed to implement compliance updates quickly in response to evolving data protection regulations like GDPR or Australia’s Privacy Act updates. 

A Forrester report showed that legacy systems are 4x more likely to be breached due to unpatched vulnerabilities. 

Recommendation: Modernisation must embed cybersecurity and compliance as design principles, not afterthoughts.

Finding 4: Poor User Experience Hampers Growth 

Whether it is employees using clunky internal tools or customers struggling with slow interfaces, legacy applications directly affect satisfaction and productivity. Modern user expectations, shaped by consumer-grade apps, require responsive, accessible, and personalised experiences.

Modern apps designed with UX frameworks, real-time data, and responsive UI dramatically increase engagement and reduce error rates.

Recommendation: As you modernise, incorporate human-centred design and DevOps practices to rapidly iterate and deliver improved user experiences. 

Conclusion 

Enterprises can no longer afford to treat application modernisation as a back-office IT project. It is a strategic initiative that directly impacts agility, innovation, security, and competitiveness. Ignoring it risks not just higher costs and inefficiency but also customer churn and brand irrelevance. 

The journey to modernisation can be complex. It may involve re-architecting, re-platforming, or even retiring systems. However, a deliberate, value-driven approach ensures sustainable success.

How Sedha Consulting Can Help 

Sedha Consulting partners with enterprises to drive application modernisation through a business-first lens. Our team brings deep expertise in legacy system assessment, cloud-native architecture, and secure migration. From crafting modernisation roadmaps to executing phased transformations, we align modern IT infrastructure with strategic business outcomes. 

Whether you're just starting to assess your legacy landscape or already in a modernisation sprint, Sedha helps reduce risk, accelerate delivery, and maximise ROI on your tech investments. 

Sedha Consulting