In an evolving digital landscape, legacy AS400 applications impede an organization’s ability to compete and thrive. Introduced in the late 1980s, these obsolete systems created on monolithic architectures fail to meet the dynamic needs of modern customers, employees, and markets. As per a recent study by McKinsey, more than 70% of an enterprise’s budget goes toward maintaining legacy systems, leaving little room for experimentation and large-scale innovation. Not to mention the security and compliance-related risks that may compound over time.  

Considering these bottlenecks, it’s clear that legacy AS400 modernization is a strategic imperative for any CTO, CIO, and IT decision-maker seeking fast-paced transformation. In this blog, we’ll discuss why business leaders need to invest in AS400 modernization initiatives. We’ll also talk about how working with AS400 is fraught with challenges.  

Why Do Organizations Need to Move Away from Age-Old AS400 Systems: Key Drivers Behind Modernization 

Several organizations insist on keeping legacy AS400 systems for running their day-to-day operations. While the system still works, it may not support new features and integrations, and can hardly keep up with your evolving business requirements. 

Now the question is-why do so many organizations still count on legacy systems that don’t align with their needs. A few possible reasons are mentioned below:  

  • IT leaders or employees may be resistant to the introduction of new technology. 
  • Implementing a brand-new platform, migrating data, and training the workforce to use it effectively can be a resource-intensive activity. 
  • Modernization may incur a range of expenses, including several unexpected expenses, denting their technology budgets. 
  • A lack of qualified talent to oversee the transition may deter organizations from undertaking such initiatives. 
  • The organization may be using AS400 systems to handle business-critical operations; any change may disrupt day-to-day work.  
  • Many are reluctant to move away from their legacy systems simply because they get the job done despite a few challenges. 

So, you see companies expect to save time, money, and effort by staying with their legacy AS400 systems for as long as they can. What they fail to realize is that they keep losing opportunities for growth and innovation-and that’s just one of the issues with these age-old systems. There may be other risks involved such as:  

  • Security Risks: According to a recent study, the average cost of a data breach is nearly $9.4 million in the USA. Older business systems don’t undergo regular bug fixes or patching and become easy targets for malicious entities targeting business networks and data.  
  • Performance Issues: While legacy systems may have worked well decades ago, they are bound to get sluggish with time. As a result, they may struggle to handle large volumes of data or complex business processes or fail altogether to complete a given task.  
  • Lost Opportunities: Legacy systems lack the essential features and integrations needed to meet your business goals. For instance, you may find it difficult to integrate your AS400 applications with an advanced analytics tool to identify how your business processes are performing, or which specific areas need to be optimized. 
  • Operational Expenses: Legacy software is monolithic in nature, so even a minor change in the codebase leads to multiple changes across the system and requires both time and effort. Likewise, legacy hardware also becomes cost-prohibitive to maintain as it ages.  
  • Difficult to Integrate: Legacy AS400 systems are often difficult to integrate with any new software you may bring in, due to their underlying architecture. This may impede data sharing between the two platforms, compelling users to manually move data from one platform to another.  

Why Legacy AS400 Modernization Matters in 2024? 

So, you see, legacy systems come with a range of challenges that may be difficult to tackle for any business. The biggest drawback of using legacy systems is that users tend to miss out on the features and functionalities only new platforms can provide. Now let’s discuss why businesses should consider investing in legacy application modernization in 2024 and beyond: 

  • Enhanced Productivity: Modernization eliminates mundane tasks your teams once spent their time and energy on (e.g. creating manual backups or patching legacy software). They can now prioritize activities that drive higher revenue, such as improving customer experience. Additionally, modern programs provide a wide array of features that help simplify lead generation, monitor customer interactions, and optimize sales processes, resulting in high overall productivity.  
  • Increased ROI: In addition to automating and streamlining routine tasks, modern software solutions offer real-time insights and custom dashboards to help employees make more informed decisions. All this boosts work efficiency and paves the way for higher ROI.  
  • Improved Security: Modern software systems are built keeping security and compliance in mind, which means you’ll get next-gen security features such as multi-factor authentication, access control, and data encryption to safeguard your assets. These systems are also compliant with the latest data privacy and compliance requirements including HIPPA, GDRP, etc.  
  • Cost Savings: While modernization may appear like a massive investment, it can slash a large chunk of your IT budget over time. Unlike older systems where a lot of effort goes into keeping your application performant and stable, new-age software gets updated automatically.  

Furthermore, newer platforms run on cloud-powered infrastructure, so you don’t need to spend on installing, managing, and maintaining in-house servers. So, while transforming legacy systems may seem costly at the outset, your investment soon pays off in the form of enhanced revenue.  

  • User Experience: Most of us would agree that legacy systems aren’t the most convenient to work with. Owing to a lot of missing features, a lot of work has to be done manually; this creates sub-par user experiences. Newer software systems, on the contrary, come with automated workflows, collaboration tools, and data visualization capabilities that amplify productivity and user satisfaction.  

Ready to Transform Your AS400 Systems? 

Modernizing your legacy software can be a challenging exercise, particularly when these systems are intricately tied to your critical business operations. Legacy systems may have served you well over the last few decades, but now is probably the time to take a leap and unshackle your business from the constraints of low performance, poor user experience, and limited scalability.  

Collaborating with trusted AS400 modernization specialists such as Damco Solutions can steer your transformation in the right direction. Whether you aim to upgrade your existing AS400 application or move to a completely new platform, we know how to make your modernization journey as seamless as possible.