What is Mainframe Modernization: Benefits & Common Techniques

Mainframe modernization is the process of updating outdated mainframe systems with newer technologies to improve security, enhance performance, and reduce operational costs.

The mainframe application modernization process involves rewriting the parts of the codebase, migrating the system to a newer platform, or completely shifting towards a modern solution.

Many large enterprises depend on legacy PL/I, RPG, and COBOL mainframe systems. These legacy systems are costly to maintain, complex to update, and don’t integrate with modern technologies.

The top companies for mainframe modernization address these challenges and improve the performance, security, and experience of the legacy systems.

The best mainframe modernization strategy, when executed effectively, can add business value. Here are the top five benefits of modernizing the mainframe:

Mainframe systems are slow and struggle to handle demanding workloads. Legacy mainframe modernization helps automate routine processes and free up human agents for cognitive-intensive tasks.

Legacy mainframe applications run on proprietary hardware and frequently crash. These challenges quickly increase maintenance costs. Modernizing mainframes helps save on licensing, hardware, and dedicated support costs.

Old mainframe systems don’t have up-to-date security measures and fail to meet current regulatory standards. Modernizing these mainframe systems helps protect against breaches and meet current security requirements.

Monolithic legacy systems slow down the business’s ability to respond to changing user needs or market shifts.

Mainframe modernization allows organizations to adapt quickly to changing business needs without major investments. This flexibility comes from moving to a modular architecture or a cloud environment, where scaling can happen faster and with a lot less effort.

Outdated mainframes cannot integrate with modern solutions. Legacy mainframe modernization enables easy integration of your existing systems with modern technologies through APIs.

Your core mainframe has carried the load for years, and it has done a good job. But with time, mainframe systems age.

Efficiency takes a dip. The user experience becomes frustrating. Maintenance costs appear when you least expect them.

And if these issues keep piling up, the whole mainframe system may shut down. You cannot let that happen. Your entire business depends on it. Money, customers, reputation, everything is at stake.

Here’s what you put on the line by delaying legacy mainframe transformation:

Outdated systems become fragile over time. The risks of outages increase when you postpone modernization. Even minor errors in code or hardware can cascade.

The Barclays case is right before us. Barclays experienced 33 outages between January 2023 and February 2025. And for just a 3-day outage in early 2025, Barclays has to pay £7.5 million to customers.

The root cause? Mainframe failure.

The price they paid could be much higher than it seems. Lost trust, operations backlog, regulatory fines, and more.

The longer you run a legacy mainframe, the more you pay just to keep things running. Specialized skills become scarce, hardware ages, and manual fixes become endless.

All these challenges eat your budget fast. You invest more in maintenance than in innovation. However, modernizing mainframes can help you become more profitable.

According to a Kyndryl survey of 500 business leaders, businesses become 9% more profitable by modernizing their mainframes.

Markets don’t wait. Customer demands evolve. Older mainframes struggle to adapt.

According to a One Advanced report, many participants cited an inability to scale to meet new demands (34%), a lack of business agility (32%), and difficulty integrating with modern tech (32%) as direct consequences of foregoing modernization.

Companies that delay mainframe transformation lose to their competitors. The competitors who modernized can launch new products quickly, start new business lines, and win over customers.

Over the years, online attacks have become more sophisticated. And the outdated systems aren’t built to defend against them. Cyberattacks have changed. Your systems haven’t.

Outdated mainframes are an easy target for hackers. They are harder to patch and get fewer security updates.

Mainframe modernization helps you secure your business against cyber threats and comply with regulatory bodies to avoid heavy fines.

Now that you understand what’s at stake and the benefits of modernization, let’s look at some of the most common mainframe modernization techniques.

Rehosting, also known as lift-and-shift, is a modernization approach in which applications are deployed to a different infrastructure without changing their code. The new infrastructure could be virtual, physical, or cloud, as per your business requirements.

Rebuilding is a technique in which legacy mainframe applications are rewritten in a modern programming language with the same core logic. In other words, creating a new application from scratch with the same functionality using modern architectures and programming languages.

Refactoring is an approach to improve the internal structure of existing code. This technique doesn’t require rewriting the entire application; rather, it involves reorganizing and optimizing the code to improve performance and maintainability while retaining functional equivalence.

Replatforming is similar to rehosting, but not identical. It involves migrating applications to a new runtime platform with minimal code changes just for compatibility. No new features or code restructuring are part of this approach.

Replacing is a legacy mainframe modernization technique of substituting a legacy app with a new application rather than modernizing the existing one. The process may involve buying a commercial Off-The-Shelf (COTS) software package.

Retiring is an approach of decommissioning an application, database, or mainframe because it is no longer needed. The goal is to reduce complexity, cost, and risk by removing redundant legacy systems.

For IT Directors, legacy mainframe modernization is a high-stakes decision. You must modernize to stay competitive, but you can’t afford disruptions, budget overruns, or failed migrations.

The challenge is that modernization sounds necessary in theory but risky in execution. Downtime isn’t an option. Budgets are scrutinized. And every decision has long-term consequences for the business. That’s why most organizations hesitate to modernize their mainframe systems.

Understanding the challenges upfront is the first step to modernizing with confidence. Below are some challenges that enterprises face during mainframe application modernization:

Most enterprises don’t have a “single mainframe system.” They have decades of layered logic, patched fixes, shared libraries, batch jobs, and undocumented dependencies spread across hundreds or sometimes thousands of programs.

Over time, business rules get hard-coded into COBOL, PL/I, or Assembler. Temporary fixes become permanent. Documentation falls out of date. And the people who originally built the system are no longer around.

When modernization begins, teams quickly realize they don’t just lack documentation, they lack clarity.

• Which programs are critical?
• What breaks if a single module changes?

Until this is understood, modernization can’t move forward safely. Teams end up spending months just mapping dependencies and untangling logic before a single line of modernization work begins. This discovery phase is unavoidable and often underestimated.

Mainframe systems still run the core of the business, but the people who understand them are disappearing.

Most experienced mainframe professionals are nearing retirement. New engineers rarely choose COBOL, IMS, or CICS as a career path. As a result, enterprises face a critical risk: their core systems rely on knowledge held by only a few individuals, and losing these experts threatens continuity.

During mainframe transformation, this becomes a bottleneck. Progress slows because only a handful of people can explain how things work. If one of them leaves mid-project, teams lose context that no documentation can replace.

At the same time, modern engineers struggle to work with legacy constructs such as copybooks, batch schedulers, and hierarchical databases, which make collaboration difficult.

Code gets most of the attention, but data is where projects fail. Legacy mainframe systems don’t store data the way modern systems do. Enterprises rely on hierarchical databases, flat files, and VSAM datasets.

Data access rules are embedded deep inside the code. Read and write behavior is often implicit, not documented. Changing the data structure without breaking applications requires extreme precision.

During migration, even small mismatches, including field lengths, encodings, and transaction timing, can corrupt data or cause silent failures. And because these systems run financial transactions, claims, or customer records, there is zero tolerance for error.

Testing data integrity at scale takes time, tooling, and discipline. Rushing this step introduces long-term risk that surfaces only after go-live.

For most enterprises, legacy mainframes are not just another system—it’s the backbone of daily operations.

Invoices, payments, customer interactions, and compliance reporting all depend on it. Any outage, even for a few hours, can lead to revenue loss, regulatory exposure, customer dissatisfaction, and damage to brand reputation.

This is why many organizations delay mainframe modernization year after year. The challenge isn’t modernizing. The challenge is doing it without breaking the business.

Enterprises must maintain parallel environments, validate outputs, and ensure a clean cutover. Without a structured, phased approach, mainframe application modernization quickly becomes too risky to approve.

Mainframe system modernization is a long-term initiative, not a quick project. And that makes budgeting difficult. Costs don’t just come from tooling or migration work. They come from:

• Extended discovery phases
• Parallel system operation
• Unexpected dependencies
• Additional testing and validation cycles

When the scope isn’t fully understood upfront, timelines stretch, and budgets follow. This uncertainty makes it hard for IT leaders to secure executive buy-in or justify investment compared to “keeping things running as they are.”

Ironically, delaying mainframe modernization ultimately costs more in the long run. Maintenance fees rise. Talent becomes scarcer. Hardware and licensing costs keep climbing.

Now that we know everything about legacy mainframe modernization, it’s time to take action. You must partner with a dependable mainframe modernization company, as the success of your project and business depends on it.

Code District is a trusted mainframe modernization company. We create a personalized strategy and leverage the best mainframe modernization tools to help businesses modernize their mainframe.

Our mainframe modernization experts can help you understand and document outdated code. We help you understand business logic and code dependencies. Our experts have proven expertise and can help you identify the right approach for your modernization.

Minimal disruption, faster time-to-market, and measurable cost savings are our promise. No matter the stage of modernization you are at, Code District helps you improve your mainframe’s performance, scalability, and agility to respond to changing business demands.

So, why wait? Book your free consultation today with our experts and let us be a part of your modernization journey.