In today’s rapidly evolving competitive landscape—and with the fast rise of AI—modernization has become an urgent priority. However, updating legacy systems remains a complex challenge. In this context, AI helps overcome these hurdles with greater depth and lower risk, accelerating the understanding of existing systems, freeing time for more strategic decisions, and driving improvements in speed and quality. 

According to Gartner, 50% of CEOs are prioritizing integration, innovation, and modernization of enterprise applications and software by 2025. In large organizations, where legacy systems support critical operations, the challenge lies in innovating without compromising stability. A difficult but essential step for digital transformation. 

In this article, we explore how AI-powered modernization enables organizations to integrate analytics, automation, and intelligent decision-making without requiring disruptive system rebuilds. 

Why modernize with Artificial Intelligence? 

Companies are undergoing a paradigm shift: we’ve moved past the digitalization phase—focused on migrating processes to digital—and entered the era of intelligent automation, powered by Artificial Intelligence. This new phase demands speed, scalability, and the ability to innovate consistently. 

In this context, modernizing legacy systems is no longer a technical choice, but a strategic necessity. Outdated technologies bring risks due to lack of vendor support and qualified professionals, fail to meet user expectations, increase infrastructure costs, and hinder the adoption of innovations such as cloud, AI, and third-party APIs. 

Legacy code also directly impacts scalability and the speed of delivering new features. When applied to modernization efforts, Artificial Intelligence reduces manual effort and significantly accelerates the software delivery lifecycle. 

At SoftDesign, we leverage AI to accelerate deliveries across multiple fronts. On the back end, unit test generation is automated: developers only need to name the test, and Copilot completes the implementation based on context. We also migrate legacy code to modern standards, ensure compliance with architectural patterns, and accelerate scaffolding by automatically creating repositories, services, and endpoints. 

On the front end, Copilot assists in generating models and services from Swagger documentation, while also providing contextual suggestions for building interfaces with reusable components. In Quality Assurance, AI automatically generates end-to-end test cases with Cypress, increasing test coverage with less manual effort. 

For business leaders, this is a critical moment: digital transformation with AI is a matter of survival in increasingly dynamic markets. Organizations driving this modernization with AI-augmented squads release products faster, improve delivery quality, and reduce project costs. 

Benefits of AI-powered modernization 

According to Red Hat’s The State of Application Modernization report, 78% of organizations are using AI as part of their modernization efforts. Among them, 53% use AI to support application modernization processes, while 42% are adding AI to legacy systems to update them. 

At SoftDesign, we apply intelligent automation and advanced software engineering to modernize systems in a secure and effective way. Our process directly impacts speed, quality, and alignment with business strategy. 

Key benefits of AI-powered modernization include: 

• AI-assisted engineering: up to 60% faster coding, automated test coverage, and support throughout the development cycle. 
• Adoption of modern technology standards: user experience–focused interfaces, cloud-first architecture, and DevSecOps practices ensure scalability, security, and operational efficiency. 
• AI for data-driven decision-making: predictive models and advanced analytics enable faster, more accurate, and insight-driven decisions. 
• Strategic, phased alignment: our approach ensures modernization without disruption, with incremental deliveries aligned with business objectives. 

Use cases and real-world applications 

As shown, AI-powered modernization is already driving change across corporate environments. Some practical examples include: 

• Modernization of legacy systems with AI: companies are using algorithms to map dependencies, suggest refactorings, and identify critical issues in aging systems, reducing risks and accelerating digital transformation. 
• Machine Learning applied to legacy systems: predictive models are being used on historical ERP, CRM, and operational data to anticipate demand, optimize inventory, and improve customer service. 
• AI in the Software Development Life Cycle (SDLC): AI-powered tools optimize every stage of the software lifecycle—from requirements analysis to automated testing, continuous validation, and intelligent documentation. 
• Cloud-first infrastructure as a foundation for modernization: migrating to the cloud and embedding native AI services accelerates time to market, enhances scalability, and enables integrations with modern analytics and automation solutions. 
• AI-augmented engineering: software engineers now rely on AI copilots for code generation, automated security reviews, and continuous integration, boosting productivity while reducing errors. 

At SoftDesign, modernization involves applying AI strategically across every stage of the SDLC. In practice, we use Artificial Intelligence from prototyping and data analysis to MVP creation with low-code tools. 

Our AI agents also assist in backlog writing and prioritization, legacy code analysis, assisted coding, code review and refactoring, and automated test generation. 

Phases of an AI-powered modernization strategy 

Case study: modernizing with AI 

Spring Point, a U.S.-based company specializing in software for the electromechanical industry, modernized its legacy ERP system MotorBase—originally built in the 1990s with a client–server architecture. With SoftDesign’s support, the company developed the first version (MVP) of a new cloud-based SaaS solution, redesigned with a user experience–driven interface. 

• AI Augmented: AI was applied to convert Visual Basic code into .NET Core, generate automated tests, and document business rules, accelerating coding by up to 90%. 
• Lead time reduction: feature delivery cycles dropped from 4 days to 2, doubling development speed. 
• Results: ERP transformed into a SaaS platform, with easier access for global clients. The beta version is already being used by Spring Point’s three largest clients, with a commercial launch planned for 2025. 

According to Troy D. Locke, CEO and co-founder of Spring Point Solutions, integrating AI into software is highly strategic to improve predictability and optimize client operations. SoftDesign’s partnership drives this evolution through testing and experimentation with intelligent features. 

Challenges and risks in AI adoption 

Implementing Artificial Intelligence brings significant opportunities, but also requires attention to critical challenges to ensure sustainable and ethical results: 

• Technical debt and risks: integrating AI into legacy systems can be complex, requiring infrastructure investments, platform upgrades, and process reviews. Poor integration may lead to inefficiencies or even operational failures. 
• Security and compliance: AI-based solutions must strictly follow privacy regulations (such as GDPR or LGPD). Handling sensitive data demands strong protection mechanisms against leaks and misuse. Vendors must also ensure robust protection of source code and business rules. 
• AI and data governance: effective governance involves defining clear responsibilities, monitoring model performance, and ensuring transparency in automated decision-making. It is crucial to mitigate algorithmic bias and maintain continuous audits. 
• Team training and cultural change: AI adoption goes beyond technology. It requires workforce upskilling, leadership involvement, and a culture of experimentation that embraces continuous learning. 

Measuring the results of AI-powered modernization 

The adoption of AI in modernization must generate measurable impact. Some key metrics to track ROI include: 

• Operational cost reduction: automation of repetitive tasks and more efficient use of resources reduce expenses in maintenance, rework, and support. 
• Shorter lead time: AI-assisted code generation and intelligent testing shorten the cycle from conception to solution delivery. 
• Increased engineering efficiency: with AI-augmented tools, teams produce more with less effort, focusing on strategic challenges instead of manual tasks. 
• Faster innovation: AI integration accelerates experimentation, validation, and launches, strengthening organizational competitiveness. 

At SoftDesign, we transform legacy systems into modern platforms by combining intelligent automation with cutting-edge software engineering. By embedding AI into every stage of development, we accelerate coding by up to 60%, automate tests with wide coverage, and deliver scalable solutions with excellence in UX, cloud, and architecture. 

Building the future with Artificial Intelligence 

AI-powered modernization is a strategic path for companies seeking agility, efficiency, and continuous innovation. By combining intelligent automation, integration with legacy systems, and skilled teams, organizations can cut costs, accelerate time to market, and significantly increase productivity. 

SoftDesign is a global software development company that combines design, strategy, and Artificial Intelligence to build impactful digital products. We integrate AI agents across our entire SDLC, boosting squad productivity by up to 55%. 

If you’re ready to take the first steps in an AI-powered modernization plan, count on our expertise in app development, platforms, data solutions, intelligent agents, and Machine Learning models. 

Frequently asked questions on AI-powered modernization 

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But chances are you already know this. So instead of simply highlighting the risks of resisting change — like the threat to your company’s survival — this article will guide you through what it takes to lead a successful digital transformation.

Below, you’ll discover practical strategies for driving innovation, agility, and competitive advantage in today’s digital landscape.

Why bringing digital transformation to life is essential

Digital innovation is more than just modernizing processes. With a strategic approach to digital transformation, your organization can redefine operating models, improve user experience, and build long-term operational resilience.

You might ask, “That sounds great – but how do we make it happen?”.

It starts with identifying the barriers that are slowing your business growth. Common barriers include:

• Scalability challenges: a lack of process automation and system integration across departments can hinder business expansion.
• Overreliance on spreadsheets, paper documents, and disparate systems: manual workflows increase rework, errors, and wasted time.
• Inefficient decision-making: without integrated data and real-time analytics, decisions are made based on outdated or incomplete information.
• Competitive risk: companies that fail to invest in digital transformation will fall behind more innovative competitors.

The impact of digital transformation across industries

Digital transformation affects every business model and operation in a unique way. While some industries are already reaping the benefits of digitalization, others continue to face significant modernization challenges.

To better understand the speed and impact of these changes, let’s take a closer look at how digital transformation is reshaping key industries.

Retail

The retail industry was among the first to fully embrace digital transformation. Online sales platforms, integrated management systems, and data analytics tools are just a few examples of technologies that have driven innovation in several areas, including:

• Personalized customer experiences;
• Optimized and automated logistics;
• Automated inventory management.

Financial Services

The financial sector has undergone massive disruption, driven by the rise of fintechs and digital banks.

Key innovations in this space include the digitization of processes such as account opening, payments, and credit analysis.

In addition, emerging technologies like blockchain and artificial intelligence are enabling a revolutionary shift in how financial transactions are conducted and how risks — including fraud and corporate cybersecurity — are managed.

Here’s a real-world success story that SoftDesign was proud to be a part of:

Sicredi, one of Brazil’s largest financial cooperatives, needed to overhaul its supplier management process. Manual workflows were leading to costly inefficiencies, including the repeated hiring of outsourced professionals and difficulties with financial tracking and accountability.

To address these issues, SoftDesign developed two custom digital solutions:

• Timesheet: a platform to automate vendor billing and payment tracking.
• MGPT (Third-Party Professional Management Module): A solution to professionalize the recruitment and selection of outsourced workers.

As a result, Sicredi achieved an 80% reduction in operational effort related to supplier reporting and completely eliminated manual work in contract creation and modification.

In addition, the platform provided greater transparency, data traceability and access to key performance indicators (KPIs) to support strategic decision-making. Today, more than 900 professionals and 20 suppliers are actively using the solutions, managing more than R$ 200 million annually in supplier invoicing and reporting.

Technology

Unsurprisingly, the technology sector is one of the most advanced when it comes to digital transformation.

Companies like Google, Microsoft, and Apple are at the forefront of innovation, consistently leveraging big data, machine learning, and the Internet of Things (IoT) to develop software, apps, and digital tools.

Industries struggling to modernize

On the other hand, it’s important to examine which industries still need attention to accelerate their digital transformation journey. A prime example is Agribusiness, which scored the lowest in digital maturity among industries.

Key issues cited include a lack of connectivity in rural areas and continued resistance to adopting new technologies.

Healthcare also remains an area of concern. While progress has been made in digitizing medical records, scheduling, and remote diagnostics, significant improvement is still possible.

Technologies driving digital transformation

Business modernization is only possible with digital strategies that enable faster, more integrated, and more efficient processes. Let’s explore the technologies that are driving more resilient and future-ready businesses.

Artificial intelligence in business

Artificial intelligence (AI) is a core pillar of digital transformation. By 2024, 72% of businesses worldwide are already using AI – an increase of 17% compared to 2023.

AI’s ability to process and learn from large data sets has revolutionized customer engagement and operational efficiency. For example:

• Machine learning algorithms can analyze historical data to predict demand, optimize inventory, and identify bottlenecks in production processes.
• Virtual assistants, chatbots, and recommendation engines enhance personalized customer experiences.
• AI-powered forecasting enables companies to identify market trends and predict consumer behavior.
• Talent acquisition benefits from AI tools that streamline resume screening and help identify top candidates.
• Real-time transaction monitoring uses AI to detect suspicious activity and combat fraud.

A clear example of the impact of AI is Liberum Ratings, a leading credit risk rating agency. The company was challenged with managing massive amounts of data, resulting in time-consuming and error-prone analysis.

To address this, SoftDesign implemented machine learning and generative AI solutions that automated report generation and improved analytical accuracy.

As a result, Liberum Ratings reduced analysis time for investment funds by 75% and began to anticipate critical variations that could impact ratings – allowing analysts to focus on higher priority cases.

Cloud computing: the digital infrastructure for innovation

Cloud computing is the backbone of modern business infrastructure, enabling flexibility, scalability, and enhanced security.

By migrating to the cloud, organizations can focus on innovation while relying on a robust and adaptable infrastructure. Key benefits include:

• Scalability, which allows companies to scale resources as needed – especially useful for growing businesses.
• Security, as cloud providers offer advanced protection against cyber threats and data loss.

There are also different cloud computing models to suit the unique needs of each business:

• Public cloud: resources are shared among multiple organizations – ideal for startups or companies with limited budgets.
• Private cloud: infrastructure is dedicated to a single organization, providing greater control and security.
• Hybrid cloud: combines public and private cloud capabilities for maximum flexibility and strategic alignment.

Not sure which cloud model is right for you? Talk to us about it!

SoftDesign offers customized cloud computing solutions to help your organization safely migrate and realize the full potential of the cloud.

Process automation: efficiency and cost reduction

Process automation replaces manual tasks. In other words, it redefines processes by eliminating repetitive, error-prone tasks. The real value is in freeing up talent to focus on what really matters: innovation, strategy and high-impact decision-making.

So how does this work in practice? For example, financial companies use automation software to ensure that processes such as bank reconciliations, invoicing, and payments are completed without human intervention.

This is possible because Robotic Process Automation (RPA) tools simulate human interaction and automate transaction reconciliation. In addition, these tools are designed with compliance processes in mind, ensuring adherence to current regulatory requirements.

RPA robots are programmed to perform repetitive tasks such as form filling, data extraction, and system updates. They operate 24/7 without error and can be deployed quickly.

Another important tool is Business Process Management (BPM), a methodology for mapping, analyzing, and optimizing business processes. With BPM, companies can visualize workflows, identify bottlenecks, and implement continuous improvements.

There’s also the concept of intelligent automation, which combines RPA with technologies such as AI and machine learning to automate more complex processes. For example, automating contract analysis, identifying critical clauses, and suggesting changes.

Chatbots are widely used to handle simple customer queries in real time, and quickly escalate more complex cases to human agents – improving the overall customer experience.

Automation can also be applied to logistics to assist with order tracking and even route optimization. Systems can predict demand, adjust inventory in real time, and coordinate deliveries based on varying conditions such as local traffic.

Key pillars of digital transformation in businesses

For digital transformation to be truly successful, it’s critical to look beyond technology – starting with the most critical factor: behavior.

In this article, we’ll explore how a solid digital culture and a data-driven management approach are essential to driving innovation and positioning your company ahead in the marketplace.

Digital culture and encouraging innovation

Digital transformation isn’t just about technology – it’s about culture. And like all disruption, it faces resistance. This was the case with the steam engine, electricity, the internal combustion engine, and more recently, the computer.

So the real breakthrough is behavioral. To overcome this barrier, your company needs a digital culture that naturally values innovation and experimentation. Some effective practices include

• Cross-disciplinary teams: regular meetings between departments foster collaboration and the exchange of strategic ideas.
• Internal challenges and hackathons: competitions encourage the creation of innovative solutions to real business problems.
• Awards and recognition: have your employees come up with innovative ideas or projects? Reward them to encourage continued interest in innovation.

Finally, a critical point: leadership must be the first to embrace change. It’s up to leaders to communicate the benefits of digital transformation, align the strategic vision, and ensure the resources needed for consistent innovation.

Digital Strategy and the Digital Transformation Journey

Without a clear and well-structured vision, digital initiatives can become fragmented, inefficient, and fail to impact business results. To avoid this, every digital strategy should follow a defined path. Here’s a step-by-step guide:

1. Initial diagnosis: assess the organization’s digital maturity by identifying strengths and areas for improvement. This mapping serves as the basis for more accurate strategic decisions.
2. Set Goals: establish clear and measurable goals that align with the diagnosis. These goals can focus on operational efficiency, cost reduction, or improving the user experience, but always with a strategic direction.
3. Prioritizing initiatives: select actions with the highest impact and feasibility, ensuring a focus on what will truly create value and accelerate digital transformation.

Digital transformation roadmap

A roadmap helps visualize each phase and ensures that initiatives are aligned with business goals. Here’s an example:

Data-driven companies: the power of data in decision-making

The ability to collect, analyze, and interpret data is embedded in the DNA of digital transformation. By 2025, intelligent workflows and seamless human-machine interactions are expected to be as common as a balance sheet.

Want to see how this “prediction” is already a reality?

• Companies like Amazon and Spotify are using data to make personalized recommendations and improve the customer experience.
• Companies are using real-time data to optimize delivery routes, reduce fuel costs, and improve driver safety (e.g., avoid high-risk areas).
• Market data and customer feedback are used to develop products and services. For example, Netflix uses viewing data to create content tailored to its audience’s preferences.

In addition, tools are updated automatically, making compliance easier.

But how do you know if your organization is on the right track when it comes to using data to make decisions? Here are the seven key characteristics of data-driven companies:

1. Data is embedded in every decision and process;

2. Networks of connected devices enable advanced, real-time analytics;

3. Modern databases (such as graph databases and NoSQL) support rapid queries and reveal new relationships between data;

4. Data is organized as a product, with dedicated teams ensuring quality, accessibility, and continuous improvement;

5. The Chief Data Officer (CDO) is focused on creating value and new revenue streams from data;

6. Data is shared (internally and externally) on collaborative platforms that drive innovation on a global scale;

7. AI tools automate data protection, recovery and compliance.

Software development as the driver of digital transformation

As we’ve seen, user experience is at the heart of digital transformation and in software development, it plays a critical role in a company’s competitiveness.

Your ability to understand (and anticipate) the needs of your target audience will set your product apart. In doing so, it goes beyond the obvious and helps your brand turn challenges into competitive advantages.

For example, a fintech can evolve its basic credit scoring system to incorporate machine learning, allowing it to predict defaults based on its customers’ historical data.

In summary, we have three main elements: opportunity, integration and scalability. However, digital culture needs the best support, and here we believe there are methodologies that are 100% capable of accelerating the delivery of digital solutions.

This is where agile methodologies like Scrum and Kanban come in. Scrum breaks software development into short cycles (typically 2-4 weeks), allowing organizations to test and adapt solutions quickly.

Kanban, on the other hand, visualizes the workflow on a board: an easy way to identify bottlenecks and improve overall operational efficiency.

When we talk about agility, we can’t overlook DevOps, which integrates development and operations to accelerate software delivery and ensure better quality.

With DevOps, e-commerce companies, for example, can quickly release updates to their websites without disrupting sales. Test automation and deployment automation reduce human error, while collaboration between teams improves system stability and performance.

The future of DevOps is even more promising with practices like GreenOps, which focus on reducing the energy consumption and environmental impact of IT operations.

Governance and Security in Digital Transformation

Without proper digital governance, organizations face regulatory and operational risks that can jeopardize the entire digitalization journey.

That’s why it’s essential to establish a strong digital governance model in advance of software development, which should include the following elements:

• Clear definition of roles and responsibilities;
• Data management policies;
• Monitoring tools;
• Full alignment with the regulations of the countries involved in your digital product – such as the General Data Protection Law and the ISO 27001 standard (which sets strict standards for data protection and information security).

Business cybersecurity: protecting data and operations

Digitalization also increases exposure to cybersecurity risks such as ransomware, phishing, and data breaches.

Threats like these can cripple operations, cause financial loss, and damage a company’s reputation.

To mitigate these risks, your organization must employ the best prevention and defense strategies, such as

• Advanced firewalls;
• Continuous monitoring;
• Threat intelligence.

Measures like these help identify and neutralize attacks before they cause damage. In addition, good security practices such as multi-factor authentication, backups, and employee training help protect critical infrastructure.

Digital transformation: the path to innovation and competitiveness

Innovation through digital transformation goes beyond process modernization. It’s about redefining business models, improving customer experience, and ensuring market leadership and competitiveness.

To be successful, however, this journey requires a well-defined strategy, agile methodologies, and customized solutions that meet the specific needs of your organization.

Frequently asked questions about digital transformation

Digital transformation generates many questions. Here are the main answers.

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You’ve certainly heard of it, however, you’ve probably never stopped to wonder why it is so important. Well, if you are an entrepreneur who wants to create a startup, or if you are part of a company that is going through a digital transformation (and what company isn’t?), you need to understand the Cloud. The following paragraphs are intended to help you on this journey.

What is Cloud Computing?

Cloud Computing is the term used to designate data centers made available through the Internet for a large number of users. This technology uses storage services that allow anyone, from anywhere in the world, access to information and files without the need to install any specific program.

The term cloud precisely alludes to remote access and the availability of centralized resources without active user management. This means that you don’t need to connect to a computer or local server to access stored files: just use the Internet. If you’ve already created, edited, or shared documents through SharePoint or Google Drive, or if you have already listened to music on Spotify or Apple Music, you have already used the Cloud.

Source: https://www.cloudcomputingfundamentals.com/cloud-computing-services-what-are-they/

Why is Cloud Computing so revolutionary?

Imagine the complexity of the infrastructure that would be needed to store all the movies and series on Netflix – in Brazil, it is estimated that more than 3,000 films and 950 series are available on the platform. Today, a digital company no longer needs to manage this type of infrastructure, as it can hire it from the Cloud.

We can then mention the following as the main advantages of Cloud Computing:

• Infrastructure cost reduction: with data in the cloud, investments in hardware and software decrease; as well as the physical space that was previously needed to store such equipment.
• Elasticity: an important feature of the cloud is the ease of increasing and decreasing contracted capacity at any time. In the past, when you bought hardware to be your server, you had to live with its size.
• Hiring-as-a-Service: it is possible to hire the infrastructure faster and easier, in addition to the possibility of terminating the contract at any time.
• Centralization of information: from the users’ point of view, the data is available to everyone with access, to the same programs and with the same authentications. All you need is access to the internet to be able to work with files in the cloud, whether through a computer, tablet, cell phone, etc.

How Cloud Computing Works

To store a new application or migrate a company’s documents to the cloud, it is necessary to choose the type of Cloud operation that best suits the needs of the business. There are three main cloud deployment models: private, public and, hybrid:

• Private Cloud: the infrastructure is tailor-made for the business, the domain is internal and access is restricted. This means that this can be a good option for companies that want to be in control of changes, and prioritize data security and privacy – only collaborating people can access it, for example. The Private Cloud is commonly a choice of governments and financial institutions.
• Public Cloud: the infrastructure prioritizes access to as many users as possible and services may be free. In this case, security is not that significant, since public networks can be used for access, and users are responsible for uploading files. Google Drive is an example of a Public Cloud: it maintains the same standard of service for all users who access it equally – but separately.
• Hybrid Cloud: some businesses may prefer to use both types of cloud solutions simultaneously. The Hybrid Cloud allows file sharing between Private Clouds and Public Clouds through a third party. Keeping more critical data in a Private Cloud and using a Public Cloud for day-to-day work can be a cost-effective solution for many businesses.

In addition to these three, there are Community Clouds, which are for exclusive use by communities of consumers and organizations with common interests; HPC Clouds used to run highperformance applications; Big Data Clouds, created exclusively for sharing large amounts of data; Distributed Cloud, when the platform is built by machines distributed in different locations; and the Multicloud, which defines the use of multiple Cloud Computing services in a single architecture.

Which Cloud solution to choose?

To make this decision, you need to understand a little more about Cloud Computing, as it has ten types of service models – the best known are IaaS, PaaS, and SaaS. In the next article in this series, we will cover its technical aspects and you will be able to choose the best option, according to your business needs and priorities. Until then!

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The Common Goal: Digital Transformation

Do you want to know more about Agile and Digital Transformation?

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• Consulting in Agile Methodology, sharing our knowledge with the IT team for adopting the Agile development method.
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