Each year, 80% of the federal IT budget is allocated to the operations and maintenance of existing systems—many of which are decades old and built on outdated languages such as COBOL and Fortran. According to the ACT-IAC Legacy Code Modernization Report 2025, these legacy systems present multiple challenges, including increased operational costs, limited scalability, heightened security vulnerabilities, and reduced user satisfaction. They are also often characterized by fragmented architectures, technical debt, and integration barriers with modern platforms, thus requiring a promising legacy system modernization.
In this context, legacy system modernization is increasingly seen as a strategic requirement. Artificial Intelligence (AI) offers federal agencies a set of tools to support this process by enabling automated code analysis, legacy-to-modern language translation, and system optimization. These capabilities allow for more gradual and less disruptive modernization, preserving core mission functions while facilitating integration with emerging technologies and platforms.
Preserving the Past, Powering the Future: AI’s Role in Legacy System Modernization
AI in federal agencies can modernize legacy systems without resorting to disruptive and costly full-system replacements. Instead, AI enables incremental legacy system modernization by analyzing, restructuring, and refactoring legacy code—preserving mission-critical operations while improving efficiency and maintainability. The Office of Personnel Management (OPM), for instance, is using AI in its two-year modernization effort to transition COBOL-based retirement systems to modern architectures. As part of this initiative, the agency conducted an extensive analysis to review millions of lines of legacy code and categorize it by complexity, enabling a more focused and efficient modernization strategy.
AI also addresses a major barrier in legacy IT: the lack of proper documentation and a shrinking pool of subject matter experts. Tools powered by AI can interpret legacy code, identify redundant logic, and generate modular, maintainable code structures while producing human-readable documentation. This capability is crucial for agencies reliant on aging code written in languages like COBOL and Fortran, which are no longer widely taught. By allowing legacy system modernization to occur module by module, AI helps agencies ensure continuity of service, reduce operational risks, and mitigate downtime—offering a secure and scalable path toward long-term digital transformation.
Smart and Secure: Enhancing Infrastructure Performance and Compliance
Integrating AI into federal IT legacy system modernization efforts significantly enhances infrastructure performance while supporting compliance with evolving cybersecurity mandates. AI-powered scanning tools can proactively detect vulnerabilities, deprecated functions, and architecture misconfigurations that may otherwise go unnoticed in legacy environments. For example, as detailed in the ACT-IAC report, outdated systems often lack modern security features and pose year-over-year risk increases—particularly due to unsupported hardware or a dwindling pool of developers with the necessary expertise. AI technologies help fill that gap by automating diagnostics and recommending targeted remediation strategies before system failures or breaches occur.
AI also supports compliance with frameworks like the National Institute of Standards and Technology (NIST) Cybersecurity Framework and the Federal Information Security Modernization Act (FISMA). These mandates require proactive risk management, continuous monitoring, and timely mitigation of vulnerabilities—tasks that AI tools can streamline through capabilities such as:
- Automated code audits to flag noncompliant or deprecated components.
- Regression testing and risk scoring to ensure updates do not introduce new vulnerabilities.
- Real-time bug detection and automated patch suggestions across legacy codebases.
- Vendor risk analysis, especially in systems relying on discontinued platforms or unsupported software.
For agencies operating on fragile, outdated systems—such as those running COBOL or Fortran—these AI-driven insights enable prioritized modernization while preserving the continuity of mission-critical services.
AI as an Accelerator for Cloud, DevOps, and Interoperability
One of AI’s most impactful capabilities is automated code translation—converting legacy languages like COBOL into modern equivalents such as Java or Python. This dramatically shortens modernization timelines and reduces the dependence on rare legacy skill sets. For example, IBM’s Watsonx Code Assistant for Z uses generative AI to help agencies convert COBOL applications to Java, enabling a smoother transition away from mainframe dependencies.
Beyond translation, AI facilitates seamless integration between legacy systems and cloud-native platforms through smart middleware and automatically generated APIs. These tools allow agencies to bridge traditional systems with modern cloud environments without requiring full system decommissioning. For instance, platforms like OpenLegacy use AI to expose legacy system functions as secure RESTful APIs, enabling faster interoperability and phased migration strategies. This supports hybrid architecture models where mission-critical legacy components are retained while newer services—such as real-time analytics, dashboards, or machine learning capabilities—are layered in incrementally.
By leveraging AI for these tasks, federal agencies can modernize more flexibly, reduce costs, and enhance cross-system collaboration, all while preserving operational stability and improving long-term scalability.
Conclusion
AI is helping federal agencies take a smarter, more flexible approach to legacy system modernization—without the disruption and high cost of full replacements. From improving security and compliance to bridging old systems with cloud-native tools, AI enables agencies to move forward with confidence. With a phased strategy powered by AI, agencies can meet today’s mission needs while laying the groundwork for future innovation.
Ready to explore how AI can accelerate your agency’s modernization goals? Connect with TechSur today.