There are many approaches to how you can update legacy software, and there’s certainly no shortage of advice on the topic. Every IT consulting and development company that has ever migrated a firm to a new CRM is preaching on how to modernize legacy solutions.

And though we have dealt with quite a few of such multi-year projects, we’ve decided to step back and see what the grand old men from McKinsey, Deloitte, and Gartner have to say on the matter.

Legacy Software Update Options

In this roundup, we compare how these respected consultancies recommend approaching legacy system updating, weigh in with our insight on how their advice plays out in practice. And, of course, we’ll help you choose the most appropriate option to revamp software.

But before jumping to the topic, let’s ensure we’re on the same page about definitions. What is legacy software? It refers to older, often outdated, technology systems, applications, or platforms that are still in use within an organization. However, these systems may no longer be actively supported or updated by their vendors, making them difficult and costly to maintain.

Apart from the lack of vendor support and update, there are other signals to watch out for. Look at the signs below indicating that you deal with outdated legacy software:

Now, given these signs, it’s no wonder that many companies are compelled to do away with legacy technology. According to Statista, the top five reasons for such updates include enhancing security, improving overall system performance, reducing costs, and boosting integration capabilities. Convinced to consider transitioning to newer tech, too? Let’s see the ways.

Top Reasons for Legacy Application Modernization in 2023

McKinsey’s Way

McKinsey provides probably the most down-to-earth recommendations on how to update a legacy system. The company singles out three apparent approaches:

McKinsey’s Way to Modernize Legacy Software

Hopefully, these are self-explanatory, perhaps except for refactoring. As an example, if you decide to refactor an existing system, you’ll update its source code to remove any technical debt and make it easier to maintain. Or you may completely rehash, say, an accounting block in your legacy software and leave everything else intact.

Each of these three options, according to McKinsey, can be further divided into:

As if not to sound too stiff or conservative, McKinsey goes on with two fancy models for IT transformation:

The two-speed model is the most interesting. This approach ensures a relatively quick change to a particular part of legacy software. At the same time, the core platform is being revamped at a steady pace or even remains intact.

This way, the companies don’t have to interrupt their day-to-day operations to deal with modernizing their solutions. The development team issues incremental updates and keeps optimizing until the desired effect has been reached.

The greenfield option, as the name suggests, is focused on the complete replacement of a legacy solution.


So, it looks like McKinsey offers three options to overhaul legacy software: build a new solution, refactor an existing one, or buy a ready-made product. Plain and simple, right?

However, if you add the incremental and end-to-end approaches into the equation, you will see that there are way more variants.

And the two-speed or greenfield option is perfect for getting your management’s attention and getting them genuinely interested in updating the legacy software at your place. At the same time, these are not theoretical musings. We’ve applied the two-speed approach when helping an insurance company update its legacy system, bit by bit.

Gartner’s Options

When it comes to defining the most appropriate way of how to revamp a legacy system, Gartner is the one that goes into the most detail. Let’s take a look at the seven options that the company distinguishes:

Gartner’s Options to Update Legacy Software


Seven options, that’s where the real choice is, right? Wondering if you can also apply here the incremental and end-to-end multipliers from McKinsey? You sure can. It won’t necessarily make sense in all possible combinations. Still, theoretically, yes — you can arrive at 14 options using Gartner’s recommendations.

If we look at these alternatives from the point of view of changes to legacy software, though, we’ll notice something interesting. Rebuild and Replace are akin to McKinsey’s Build Anew & Replace, while Replatfrom, Refactor, and Rearchitect resemble McKinsey’s Refactor.

Encapsulate and Rehost, in their turn, do stand separately. They are often decent interim options, while a major rehash of a legacy system is taking place. We used these options to preserve a vulnerable piece of legacy software while developing a brand-new solution for a plant-growing company.

Deloitte’s Approach

Deloitte stands somewhere in the middle between Gartner and McKinsey in terms of how many options to modernize a solution it recognizes. There are five you can choose from:

Deloitte’s Way to Update Legacy Software


We’ve never met companies seeking to retire or resource legacy software in our practice. Of course, the nature of our expertise probably has something to do with the fact, but it seems Deloitte includes the Retire and Resource options just to sound different.

The remaining (real-life) variants — replace and retool — we already know from the previous options, right? And as for Remain, well, give us a call, and we’ll share a couple of stories about the companies that decided to leave their outdated software intact.

How to Update Legacy Software Based on These Options?

As you can see, there are many options available for you. And when you are ready to make the decision, it will lie in one of these three dimensions:

Complete Overhaul
Gradual Transformation
Build a new solution

So all of the options that we’ve just covered will fit into one of these larger groups. Let’s regard them through the prism of the goals you are trying to achieve and potential benefits.

And while we’re at it, let’s also put the option of building a new solution aside. Because let’s face it, “build anew” is a favorite option for many IT consulting and development firms. Yet, at Velvetech, we prefer not to underestimate the importance of reusing what you already have as much as possible.

Business Goals
Update Options
Automate new or changed business processes Replatform Faster service delivery. Let’s say your field workers are demanding a mobile app that allows them to serve customers right from where they are.
Retool Optimal use of resources. Let’s say you automate an onboarding process for your customers: that frees your workers.
Replace Budget economy. You replace legacy software with a canned solution that covers all workflows at your company. This might be a more budget-conscious option compared with custom software pricing.
Enhance the productivity of an existing system Rearchitect Improved stability. Switching to a microservices-based architecture improves your legacy software performance noticeably and makes it more stable.
Refactor Lower maintenance cost. Legacy software with refactored source code requires less attention and is easier to support and maintain.
Hibernate an existing solution and make it more secure Rehost Protect your business as you gear up toward proper legacy software modernization.
Make software available for light integrations with other systems Encapsulate An interim solution to enable new workflows. Let’s say you want to hook your legacy software with a new accounting solution you’ve deployed.
Sell the business, so modernization is someone else’s headache Retire Well, if you are on this route, there’s but a tiny chance you’re reading this. Anyway, I encourage you to give us a call or fill out the form below and hear your options on what to do with legacy software. It doesn’t need to be a headache.
If that’s not enough and you’re looking for a more comprehensive guide on how to upgrade legacy software and approach outdated solutions, then we have it for you.
Discover our 101 on systems modernization.

What’s exciting about legacy software modernization is that in practice, such projects are often a mixture of all these different options. Reach out today to learn what will work best for your unique situation.

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