February 04, 2026
7 Actionable Strategies for Measurable Cost Reduction in App Modernization
Modernizing outdated systems and legacy applications can become really expensive, really quickly. The problem isn’t the technology itself, but hidden inefficiencies: unclear scope, accumulated technical debt, fragile core architecture, and complex integrations. All that slows teams down, increases project costs, and limits efficiency gains.
At Artkai, we know that it doesn’t have to be this way. When app modernization efforts are broken into phases instead of being treated as a complete rewrite, teams can reduce cost with app modernization, control scope, support business objectives, and avoid unnecessary spend.
In this article, we share seven practical modernization strategies that work without compromising product quality or slowing business operations. These insights come from patterns and numbers we’ve seen repeatedly while modernizing complex products at Artkai.
1. Conduct a Thorough Technical Audit
2. Prioritize Modernization Based on Business Value
3. Standardize and Optimize Processes Before Modernizing
4. Leverage Incremental and Modular Modernization
5. Automate Testing and Deployment
6. Consider Cloud Migration and Scalability
7. Engage Experts and Use Proven Methodologies
Why Choose Artkai as Your Modernization Partner
1. Conduct a Thorough Technical Audit
Cost-effective modernization efforts start with a solid technical audit. It’s the step that helps decision makers set clear priorities instead of spending time and budget on things that don’t meet business objectives or cost optimization requirements.
Skipping this step usually leads to late discoveries, like hidden dependencies, underestimated modules, or infrastructure issues, all of which drive rework, scope changes, and higher costs across application modernization projects. But a well-run audit gives teams a clear view of what needs attention now, what can wait, and what can be phased out, making it easier to modernize legacy applications in smaller, lower-risk steps.
We’ve seen that a thorough audit helps teams:
- Pinpoint the parts of the system that cost the most to maintain. In industries like banking and insurance, RS2 reports that up to 70–80% of IT budgets can go toward maintaining legacy systems.
- Spot technical debt that slows application development, increases regression risk, and makes even small changes more expensive over time.
- Avoid full rewrites by focusing on high-impact improvements instead of replacing stable components or existing code that still do their job.
- Plan modernization in phases, keeping both scope and technology investments under tighter control from the start.
What to assess during a cost-focused audit
To really reduce modernization costs, an audit should focus on areas that generate recurring expenses, not just architectural theory:
- Technical debt hotspots: Legacy modules, outdated libraries, security gaps, and fragile components that need frequent fixes or manual intervention, often making faster development cycles unrealistic.
- Modules with high failure or ticket volume: Components that generate repeated bugs, downtime, or support tickets often consume a disproportionate share of unplanned maintenance effort.
- Dependencies that slow development: Tightly coupled, monolithic applications, outdated APIs, and single points of failure make even small changes time-consuming and expensive in application modernization efforts.
- Infrastructure overuse or outdated hosting models: Oversized servers, legacy hosting contracts, redundant environments, and cloud setups that aren’t aligned with actual usage.
Cost impact
When used as a decision-making tool, a technical audit can:
- Cut unnecessary modernization scope, sometimes by as much as half, by clarifying what doesn’t need to be changed yet.
- Improve budget allocation, helping teams focus investment on the most expensive and risky parts of the system.
- Reduce overall modernization spend, often by avoiding rework, false starts, and late architectural changes.
- Improve delivery predictability, lowering the risk of costly mid-project course corrections and supporting successful modernization.
Use case
During the modernization of an enterprise communication platform, the audit focused on how the system actually worked in production, not how it was described in documentation.
Over the course of a two-week audit, we reviewed the most critical parts of the system and looked at them through a practical lens: business impact, operational cost, performance, scalability, and data security. This made it easier to see the problem areas that were adding unnecessary cost:
- Fragmented application logic, where important business rules were spread across desktop and MVC-based web apps with local databases, making data synchronization both fragile and expensive.
- Opaque integrations, with subsystems connected directly at the database level instead of through APIs, which slowed down debugging and made even small changes costly.
- Inefficient release processes, caused by the lack of automated deployment pipelines and continuous integration, increasing both the effort and risk involved in shipping updates.
Catching these issues early helped keep the modernization process focused on what needed attention. Instead of rewriting stable parts of the system, the team could spend time and budget on the areas that were creating the most cost and risk.
2. Prioritize Modernization Based on Business Value
Not all parts of a legacy system deserve the same attention. But when modernization is guided by business value, engineering effort goes into changes that either reduce costs or deliver clear returns.
Various studies suggest that half or more of features in many products are rarely used or not used at all by most users. Modernizing those features costs just as much as modernizing high-impact ones, but brings far less value. By focusing first on features that affect revenue, customer experience, or daily business operations, teams can produce results earlier and keep project costs under control.
How to prioritize for cost reduction
Effective value-based prioritization typically involves:
- Mapping features and modules to clear signals like revenue contribution, transaction volume, or how often customers actually use them.
- Identifying the small set of functionality that generates most of the business value.
- Focusing modernization efforts on customer-facing features or workflows that are expensive to run or support.
- Pushing low-value components to later phases if they don’t materially affect users, customer demand, or internal operations.
Cost impact
When modernization is guided by business value:
- Modernization timelines are shorter by 25-40% because effort is spent on what actually matters.
- Early delivery of high-value functionality makes it easier to justify continued technology investments and reduces budget risk.
- Unnecessary complexity is avoided, which lowers long-term maintenance and support costs.
- Teams start seeing real impact from the very first phase of modernization.
Use case
In one of our application modernization projects, the main constraint wasn’t ambition — it was risk. The client, a financial institution, depended on a complex legacy core system that was stable and business-critical, but difficult to change safely. A complete backend rewrite would have introduced a lot of uncertainty and upfront cost.
So instead of starting there, the team focused on where business value and cost savings could be achieved fastest. The first step was a new customer-facing interface supported by a cloud-based middleware layer. This made it possible to:
- Deliver a noticeably better UI/UX and support modern devices
- Add new customer-facing features without touching the core system
- Keep testing and regression scope limited by leaving stable backend components as they were
By modernizing the “facade” first and integrating it with the existing backend, the client reduced both technical risk and upfront modernization cost. As early results became visible and confidence grew, it became much easier to plan the next modernization steps and decide where additional investment would make sense.
3. Standardize and Optimize Processes Before Modernizing
Modernizing inefficient workflows just makes inefficiency more expensive. Rebuilding outdated processes on a new tech stack carries old complexity into the new system and increases both development and operational costs, undermining successful modernization efforts.
That’s why process optimization should come first. Simplifying workflows before the application modernization process starts reduces the amount of logic to build, test, and maintain, lowers integration overhead, and helps reduce costs early. It also helps ensure the modernized system supports real business objectives instead of outdated assumptions often embedded in legacy systems.
How to optimize processes with cost in mind
A cost-focused approach to process optimization typically includes:
- Looking at existing workflows to spot bottlenecks, unnecessary steps, and outdated approvals
- Removing duplicate or low-value activities that add complexity without improving results
- Making sure workflows reflect current business goals and regulatory requirements
- Being deliberate about automation, deciding what really needs to be automated and what is cheaper to handle manually
Cost impact
When processes are optimized before modernization:
- Redundant logic is removed, which means less code to build, test, and maintain across app modernization initiatives
- Integration scope is reduced, lowering both development and ongoing maintenance costs and delivering early cost savings
- Operational efficiency improves right away, not only after the new system is fully released
- Long-term support costs go down because there are fewer edge cases and exceptions to deal with.
Even if the initial development phase takes slightly more time, the total application modernization cost is lower in the long run, simply because the system is easier to run, easier to change, and cheaper to maintain — one of the key expected benefits for both engineering teams and decision makers.
Use case
In a modernization project for a financial institution, customer onboarding turned out to be one of the most expensive areas to change. Over time, the process had grown complicated, mixing automated checks, manual reviews, and multiple third-party integrations. But fully automating the entire flow would have meant a lot of custom development and high ongoing integration costs.
So we decided to split onboarding into two parallel paths:
- A lightweight initial flow that gives users quick access to limited functionality
- A background verification process that combines asynchronous checks with targeted manual reviews in the back office
This setup reduced the number of steps users had to make by 30%, improving the user experience without expanding development scope.
4. Leverage Incremental and Modular Modernization
Trying to modernize everything at once increases risk, cost, and downtime. Research from McKinsey shows that around 17% of large IT projects run into serious trouble, which is enough to put the business itself at risk.
That’s why incremental app modernization matters. By breaking the work into modules that can be updated independently, teams can release changes in phases, get user feedback early, and move forward without disrupting daily operations.
While this approach fits well with Agile and DevOps, its main benefit here is economic. Smaller steps mean smaller commitments, faster feedback loops, and fewer costly surprises, helping teams reduce costs while keeping options open.
How to implement incremental modernization
An incremental approach usually means:
- Identifying components or services that can be modernized on their own
- Adding new modules alongside existing functionality instead of replacing everything at once
- Using APIs, feature toggles, or service layers to keep changes isolated
- Validating each step before committing the budget to the next one
Cost impact
When modernization is incremental and modular:
- Budget is distributed over time instead of committed upfront
- Project overruns are reduced by 15-25% because the modernization scope can be adjusted early
- Downtime and rollback risks (both costly) are significantly reduced
- Teams can deliver business value earlier, supporting revenue growth and improving ROI per modernization phase.
Use case
In the modernization of an enterprise communication platform, the client needed to update a large, business-critical system without disrupting daily operations. A complete rewrite wasn’t realistic — neither technically nor financially.
The work started with a small, low-risk prototype that introduced a new architectural approach alongside the existing application. Instead of adding more logic to the legacy codebase, new functionality was built on a modern foundation and carefully integrated with what was already there.
Over time, this foundation replaced larger parts of the legacy UI. Backend components were modernized in parallel using a modular approach: new services were introduced next to existing ones, traffic was shifted gradually, and bottlenecks were addressed one by one without shutting the system down or forcing a risky cutover.
By moving incrementally, the team avoided a costly big-bang rewrite, spread the work across manageable phases, and kept the option to adjust direction as new insights emerged. That flexibility helped keep overall modernization costs predictable and under control.
5. Automate Testing and Deployment
Manual testing and deployment are often underestimated cost drivers in application modernization. They may seem manageable at first, but as changes become more frequent, the cost adds up quickly. Repeated manual regression testing and deployments turn every release into a recurring expense.
Automation helps break that cycle. A Forrester Total Economic Impact study, commissioned by TestRail, found that teams using structured test management and automation achieved a 204% ROI over three years. So while automation requires upfront effort, it reduces the cost of each release and lowers total modernization spend over time.
How to automate with cost reduction in mind
A cost-focused automation strategy usually looks like this:
- Adding automated unit, integration, and UI tests early, while changes are still relatively small
- Defining clear test levels (smoke, sanity, regression) so full regression isn’t required for every release
- Running automated tests as part of CI/CD pipelines instead of treating testing as a separate step
- Putting monitoring, alerting, and rollback mechanisms in place to limit the impact and cost of failed deployments
- Using static analysis and code quality checks to catch technical debt before it becomes expensive to fix
The goal is to lower the cost per release while keeping enough confidence in system stability to ship changes safely and regularly.
Cost impact
When testing and deployment are automated:
- The cost of regression testing goes down over time as manual work is replaced with repeatable pipelines
- Release cycles become shorter and more predictable, helping teams stay competitive in faster-moving markets
- Fewer defects reach production, which can cut the downstream cost of hotfixes and emergency patches by up to 50%
- Teams can ship smaller changes more often, lowering the financial risk of each release.
Use case
In the enterprise communication platform project, modernization was outpacing delivery. New features were built, but releasing them was slow and expensive due to:
- Manual regression testing, repeated in full for every release
- Manual deployments, with client IT teams packaging and installing each release separately
This approach didn’t scale. Releases happened once or twice a year, bundling months of changes and driving up testing cost and release risk.
Our team addressed this by introducing automated testing into development, starting with the most common test cases and expanding over time. Tests were split into smoke, sanity, and regression suites, so only what was needed ran per release. These tests were then integrated into deployment pipelines.
As a result:
- Regression effort stopped growing with each release
- Components could be released independently
- Release frequency increased to every few weeks, sometimes weekly
Instead of repeatedly paying for manual work, the client invested once and reduced the cost of every release that followed.
6. Consider Cloud Migration and Scalability
Legacy infrastructure often drives unnecessary modernization costs. On-prem environments and static cloud setups tied to legacy systems are usually sized for peak load, increasing spend while limiting flexibility.
A deliberate cloud migration approach within broader modernization strategies helps fix this by reducing overprovisioning and operational effort. The value doesn’t come from cloud adoption alone, but from aligning scaling models, automation, and technological upgrades with real usage.
How to migrate with cost control in mind
A cost-effective migration approach usually includes:
- Reviewing existing infrastructure to understand how resources are actually used in day-to-day operations
- Identifying which components benefit most from elastic scaling and which don’t need it
- Choosing deployment models that balance cost, performance, and compliance requirements
- Using containerization and orchestration to scale resources up and down as demand changes
- Relying on managed services where it makes sense to reduce internal maintenance and support effort
Cost impact
When cloud migration is done deliberately:
- Infrastructure costs go down as overprovisioned capacity is eliminated. In practice, teams often see infrastructure cost reductions in the 20–50% range, simply by aligning resources with real usage.
- Operational costs decrease as maintenance, patching, and scaling are handled through automation or managed services. Businesses can achieve a 20–66% reduction in total cost of ownership by moving away from static, self-managed infrastructure.
- Deployment and update processes become faster and cheaper, helping teams stay competitive while supporting revenue growth.
- Resilience improves without paying for always-on redundancy, as systems can scale up and down based on demand instead of running at peak capacity all the time.
Over time, these changes add up to a lower total cost of ownership for both the modernized application and the infrastructure behind it. Supporting this, Forrester found that modernizing applications on Azure PaaS delivered a 228% ROI and a 40% reduction in app-development-related infrastructure costs.
Use case
Before modernization, the enterprise communication platform relied on on-prem installations across many client environments. Even where cloud was used, infrastructure was static and sized for peak load, driving up costs and complicating updates.
The modernization introduced a hybrid cloud setup: core components remained in a private environment for compliance, while scalable workloads ran in the public cloud, managed through Kubernetes to scale based on real demand.
This reduced operational costs by:
- Replacing overprovisioned capacity with elastic scaling
- Reducing operational load through managed cloud services
- Rolling out updates centrally instead of per client
7. Engage Experts and Use Proven Methodologies
Application modernization isn’t just a technical challenge — it’s a cost one. Teams without experience in complex app modernization initiatives often underestimate how quickly costs add up through trial and error.
Working with specialists who follow proven modernization strategies helps teams avoid common pitfalls, control budgets, and align investments with real outcomes, including enhancing security and long-term scalability.
How to engage experts in a cost-effective way
To keep modernization budgets under control, teams usually:
- Work with partners who have hands-on experience in modernizing outdated legacy systems
- Use iterative approaches (Agile, DevOps, incremental delivery) to limit financial exposure
- Rely on architecture and code assessments to guide investment decisions
- Track outcomes at each phase to make sure spending matches results
Cost impact
When modernization is guided by experienced teams:
- Legacy complexity shows up early, not halfway through the project
- The scope stays tight instead of quietly expanding
- Internal teams can focus on supporting the existing product
- Budget planning becomes more predictable across modernization phases
From a total-cost perspective, experienced guidance helps teams spend less by making better decisions upfront.
Strategies comparison:
Strategy | Cost Reduction Effect | Business Impact |
|---|---|---|
Technical audit first | • Removes unnecessary modernization scope | Predictable budgets and fewer surprises |
Value-based prioritization | • Focuses spend on revenue-critical features | Faster ROI from modernization |
Process optimization upfront | • Eliminates redundant logic | Leaner workflows and quicker adoption |
Incremental modernization | • Avoids large upfront investment | Continuous delivery without downtime |
Automated testing & CI/CD | • Cuts manual QA effort | Faster, safer releases |
Cloud cost-aware migration | • Eliminates overprovisioned infrastructure | Scalable infrastructure with lower TCO |
Expert-led execution | • Avoids trial-and-error decisions | Higher success rate and controlled scope |
Why Choose Artkai as Your Modernization Partner
Legacy application modernization is about balancing cost, risk, and long-term sustainability. At Artkai, we treat modernization as a structured process with a clear focus on controlling costs while delivering real business impact.
By focusing on phased delivery, cost-aware execution, and architecture-first decisions, Artkai helps companies reduce costs, experience the expected benefits of modernization, and evolve their software in a way that supports long-term competitiveness.
Product modernization is one of our core services. We’ve modernized dozens of complex applications across industries, helping clients reduce unnecessary engineering effort and improve operational efficiency.
Here’s how we approach modernization:
- Market expertise and product optimization. We bring hands-on experience from real modernization projects across industries. This helps us quickly identify where systems can be simplified, costs reduced, and performance improved without expanding scope.
- Tailored modernization strategy. Every legacy system is different. We analyze your architecture, business processes, and constraints to define a modernization strategy that balances cost, risk, and long-term impact, whether that’s rehosting, refactoring, or selective re-architecture.
- User-centric, cost-aware approach. Improving UX doesn’t have to mean rewriting the backend. We focus on interface and workflow changes that improve adoption while keeping technical risk under control and offering cost-saving solutions.
- Phased delivery. Instead of large, risky redoes, we modernize in stages. An iterative, modular approach helps teams release improvements earlier and avoid unnecessary engineering work, reducing overspend, in some cases by up to 35%.
- Future-ready architecture and cloud optimization. We design scalable systems that are cheaper to operate over time. By addressing architectural and infrastructure inefficiencies, teams can reduce long-term maintenance costs by 20–40% while supporting faster updates and integrations.
- Proven results and measurable impact. Across modernization projects, teams typically achieve lower maintenance overhead, more predictable release cycles, and controlled budgets aligned with business priorities.
- Security and compliance built in. Security and compliance are part of modernization from day one. We account for data protection and regulatory requirements early to avoid costly fixes later.
Wrapping Up
Legacy application modernization doesn’t have to be costly or disruptive. When approached with a strategic approach, it becomes a set of controlled decisions, not a single high-risk expense.
By focusing on scope control, incremental delivery, and cost-aware execution, teams can achieve measurable cost savings, support digital transformation, and remain competitive as customer demands evolve. Artkai follows a structured, phased modernization process that helps minimize risk, avoid rework, and ensure every step delivers business value.
Ready to modernize without overspending? Let’s talk.
Clients and Results
Schedule your free consultation
Don't miss this opportunity to explore the best path for your product. We are ready to delve into the specifics of your project, providing you with expert insights and optimal solutions.
Book your free sessionRead More
Explore articles from Artkai - we have lots of stories to tell
Join us to do the best work of your life
Together we advance the human experience through design.