How to Measure the ROI of Your Legacy Systems Modernisation Initiative
Modernising legacy systems is a significant step for any organisation. It can unlock new capabilities, reduce operational risk, and improve performance. But one of the most common challenges is proving the value of that investment. Measuring ROI is essential, not just to justify the cost, but to guide decision-making and demonstrate progress.
This blog explores how to approach ROI in legacy systems modernisation, based on practical experience and the kinds of conversations Abstract Group regularly have with clients.
What Are We Measuring When We Talk About ROI?
When considering ROI in legacy systems modernisation, there are a few lenses to consider.
Monetary impact, such as cost savings and improved cash flow, often achieved through reduced licensing, infrastructure, or maintenance costs.
Productivity gains, such as increased throughput, faster delivery, or the ability to do more with the same resources.
Both perspectives are important. A modernisation initiative should not only reduce costs but also enable the organisation to operate more efficiently and scale more effectively.
The ROI Formula
A simple formula can help quantify ROI:
ROI = ([Net Return from Investment – Cost of Investment] / Cost of Investment) × 100
For example, if a project costs £100,000 and delivers £150,000 in net return, the ROI would be:
([£150,000 – £100,000] / £100,000) × 100 = 50%
This calculation provides a clear, percentage-based view of the return relative to the investment made.
The Importance of Setting Clear Goals
It’s essential to define what success looks like from the outset. Whether the goal is to reduce downtime, improve deployment speed, or increase system availability, having a clear, quantifiable target ensures that ROI can be measured meaningfully.
The Metrics That Matter
Most modernisation projects aim to either increase capacity or reduce delivery time. In today’s cloud and AI-driven world, uptime, availability, and low latency are becoming key metrics, especially as organisations pivot to conversational methods of user interface.
Some of the most important metrics we use to measure ROI include:
These metrics provide a balanced view of both technical and business performance.
How We Help Clients Track ROI
At Abstract, we work with clients to agree on the key metrics to measure before the project begins. These metrics are documented and exposed through dashboards or reporting tools to ensure consistent measurement and review.
After the project ends, dashboards and automatic data refreshes help keep the momentum going. This ensures that ROI is not just measured once but continuously monitored and communicated.
Tangible and Intangible Benefits
Clients typically see a range of tangible benefits from modernisation, including:
But there are also intangible benefits that are harder to measure but still highly valuable:
We help clients build a reporting model around these outcomes and measure them with KPIs, so that even qualitative improvements can be tracked and shared with the relevant stakeholders.
A Real-World Example
In one recent project, we introduced an AI coding assistant for a client. As a result, we were able to measure an increase in lines of code delivered and a reduction in delivery time. These were clear, quantifiable outcomes that demonstrated the value of the modernisation effort.
Legacy systems modernisation is a strategic investment, and ROI is how you prove its value. By setting clear goals, tracking the right metrics, and capturing both tangible and intangible benefits, organisations can build a compelling case for change. Partnering with a team that understands both the technical and strategic dimensions of modernisation can make all the difference.
We help clients modernise with purpose and measure with precision. If you're ready to unlock the value of your legacy systems, we’re here to help.