Legacy IT systems are one of the biggest obstacles facing manufacturers today. Outdated technology causes underperformance in 90% of businesses, blocking innovation and the adoption of Industry 4.0 capabilities. With enterprises spending up to 70-80% of their IT budgets maintaining legacy applications instead of innovating, modernization planning has become a strategic imperative, not just a technical exercise.
The Cost of Standing Still
The global application modernization market is projected to grow from $30 billion in 2026 to $92 billion by 2034, reflecting the urgency organizations feel to address technical debt. Enterprises lose an estimated $370 million annually to outdated technology through inefficiency, downtime, security vulnerabilities, and missed opportunities. For manufacturers specifically, legacy systems prevent the real-time data access needed for predictive maintenance, IoT integration, and AI-driven quality control.
Composable Modernization: The 2026 Approach
Legacy modernization has shifted away from risky "big bang" transformations toward composable modernization, where systems are upgraded in discrete, measurable increments. Rather than planning a single large cutover, teams build value through iterative improvements that coexist with existing systems. This approach reduces risk and allows teams to deliver early returns without disrupting ongoing production operations.
The 7R Framework for Decision-Making
Not every legacy system requires the same treatment. The 7R framework provides a structured way to evaluate each application:
- Rehost: Move the application as-is to a new hosting environment
- Refactor: Restructure the code for better performance without changing functionality
- Revise: Make targeted modifications to meet new requirements
- Rebuild: Redesign and rewrite the application from scratch
- Replace: Switch to a commercial off-the-shelf or SaaS solution
- Retire: Decommission applications that are no longer needed
- Retain: Keep systems that still serve their purpose effectively
Planning Best Practices
Successful modernization begins with a comprehensive system audit that documents dependencies, assesses risks, and maps business processes to technical assets. Manufacturers should visualize where technical debt resides and its impact on production to inform prioritization. Setting clear, measurable objectives such as improved system reliability, reduced total cost of ownership, or faster time-to-market ensures the modernization effort stays aligned with business strategy.
AI-Accelerated Modernization
In 2026, AI-assisted tools are accelerating the modernization process itself. AI code assistants can analyze legacy codebases, map dependencies, extract business rules, and even generate modernized code. These tools reduce the manual effort required for migration while preserving institutional knowledge that might otherwise be lost when legacy systems are retired.
Manufacturing-Specific Considerations
Manufacturers face unique modernization challenges. Production systems must maintain uptime during transitions, shop floor equipment may use proprietary protocols that require specialized integration, and regulatory compliance requirements add complexity to any system change. API-first strategies allow manufacturers to wrap legacy protocols in modern interfaces, creating a bridge between decades-old equipment and modern analytics platforms.
The Synesis Approach
Synesis International helps manufacturers develop modernization roadmaps that balance ambition with practicality. We assess your current technology landscape, identify the highest-impact modernization opportunities, and create a phased plan that delivers value at each stage while minimizing disruption to your production operations.