Modernizing Legacy ERP: The Selective Extraction Strategy

ERP modernization is the most expensive way to discover that your organization no longer understands its own business logic. Every year, enterprises pour billions into "Big Bang" rewrites, only to find that after 24 months and millions of dollars, they’ve successfully replicated 20-year-old bugs in a more expensive cloud environment.

The $3.6 trillion global technical debt isn't just a number; it’s a gravity well. When you attempt to modernize a legacy ERP like SAP, Oracle, or a home-grown COBOL monolith, you aren't just fighting code—you’re fighting "institutional archaeology." 67% of these legacy systems lack any form of up-to-date documentation. The original architects are retired, the requirements documents are lost to defunct SharePoint sites, and the only "source of truth" is the behavior of the system itself.

Traditional modernization strategies—rehosting, refactoring, or rewriting—are failing. 70% of legacy rewrites fail or significantly exceed their timelines. The future isn't rewriting from scratch; it’s understanding what you already have through selective extraction.

TL;DR: Stop treating ERP modernization as a coding problem and start treating it as a data extraction problem: use visual reverse engineering to capture proven business logic from user workflows and port it directly into modern React micro-frontends.

The Failure of the "Big Bang" ERP Rewrite#

The 18-24 month enterprise rewrite timeline is a myth. In reality, these projects usually hit the "90% done" mark at month 18 and stay there for another year as edge cases emerge. Why? Because manual documentation is a bottleneck. It takes an average of 40 hours per screen to manually document, design, and spec a legacy ERP module for a rewrite.

When you have 500+ screens in a global logistics or financial module, the math simply doesn't work. By the time you finish documenting the last screen, the business requirements for the first screen have already changed.

Comparing Modernization Methodologies#

Why Selective Extraction is the Only Path Forward#

Modernizing legacy ERP systems doesn't require a total overhaul. Most ERPs are 80% "plumbing" and 20% "unique business value." The plumbing (user auth, basic CRUD, navigation) can be replaced with off-the-shelf modern frameworks. The 20%—the complex pricing logic in an insurance module or the regulatory compliance checks in a healthcare ERP—is what needs to be extracted with surgical precision.

This is where Replay changes the ROI equation. Instead of spending months digging through thousands of lines of legacy Java or PL/SQL, you record a subject matter expert (SME) performing the actual workflow. Replay’s Visual Reverse Engineering platform then extracts the UI components, the state transitions, and the API contracts directly from that session.

💰 ROI Insight: By moving from manual documentation (40 hours/screen) to visual extraction with Replay (4 hours/screen), enterprise teams realize a 70% average time savings, turning a two-year roadmap into a three-month sprint.

The Architecture of Visual Reverse Engineering#

When we talk about "extracting" a module, we aren't just taking a screenshot. We are capturing the underlying DNA of the application. Replay analyzes the DOM mutations, network calls, and state changes during a live recording to generate production-ready code.

Step 1: Capturing the Source of Truth#

The user records their workflow. This video becomes the "Source of Truth." If the legacy ERP requires a specific sequence of five hidden clicks to approve a vendor invoice, Replay captures that sequence and the resulting data payload.

Step 2: Generating Modern Components#

Replay’s AI Automation Suite takes that recording and generates documented React components that mirror the business logic of the legacy system but utilize your modern design system.

typescript
// Example: Generated React Component from a Replay Extraction
// Module: Legacy Vendor Approval Workflow
// Logic: Preserved from SAP R/3 Recording #402

import React, { useState, useEffect } from 'react';
import { Button, Table, Badge } from '@/components/ui'; // Your Design System
import { validateVendorCompliance } from '@/api/legacy-bridge';

export function VendorApprovalModule({ transactionId }: { transactionId: string }) {
  const [status, setStatus] = useState<'pending' | 'approved' | 'flagged'>('pending');
  const [data, setData] = useState<any>(null);

  // Replay extracted this logic from the legacy network waterfall
  const handleApproval = async () => {
    const isCompliant = await validateVendorCompliance(transactionId);
    if (isCompliant) {
      // Logic preserved from legacy 'TX_CODE_44'
      await submitToLedger(transactionId);
      setStatus('approved');
    } else {
      setStatus('flagged');
    }
  };

  return (
    <div className="p-6 border rounded-lg shadow-sm">
      <h3>Vendor Verification: {transactionId}</h3>
      <Badge variant={status === 'flagged' ? 'destructive' : 'default'}>
        {status.toUpperCase()}
      </Badge>
      <div className="mt-4">
        <Button onClick={handleApproval} disabled={status === 'approved'}>
          Execute Legacy Approval Flow
        </Button>
      </div>
    </div>
  );
}

Step 3: API Contract Extraction#

One of the biggest risks in modernizing legacy ERP is breaking the "black box" API. Most legacy systems have undocumented endpoints that return massive, convoluted JSON or XML payloads. Replay automatically generates TypeScript interfaces and Zod schemas based on the actual traffic observed during the recording.

typescript
// Example: Generated API Contract from Replay Technical Debt Audit
import { z } from "zod";

export const LegacyERPSchema = z.object({
  ORD_ID: z.string(),
  CUST_REF: z.number(),
  // Replay identified this as a mandatory legacy flag
  FLAG_V3_COMPLIANCE: z.boolean(),
  LINE_ITEMS: z.array(z.object({
    SKU: z.string(),
    QTY: z.number(),
    PRICE_ADJ: z.number().optional(),
  })),
});

export type LegacyERPOrder = z.infer<typeof LegacyERPSchema>;

The 5-Step Extraction Framework#

For Enterprise Architects looking to implement this, follow this battle-tested framework:

Step 1: The Technical Debt Audit#

Identify which ERP modules are high-value/low-risk. Use Replay’s Technical Debt Audit tool to map out the complexity of your existing screens. Focus on modules where the "archaeology" cost is highest—those with zero documentation.

Step 2: Recording the "Golden Path"#

Have your most experienced users record "Golden Path" workflows. In a manufacturing ERP, this might be the "Raw Material Intake to Inventory Update" flow. Replay records the session, capturing every API call, every validation error, and every UI state.

Step 3: Extraction and Library Mapping#

Use Replay’s Blueprints to map legacy UI elements to your modern React Design System (the Library). Replay will automatically suggest component replacements. For example, a legacy Gridsuite 2005 table is automatically mapped to your modern Tailwind-based DataGrid.

⚠️ Warning: Do not attempt to "improve" the business logic during extraction. The goal is parity. Improvements come in Step 5. If you change the logic and the UI simultaneously, you will never find the source of the bugs.

Step 4: E2E Test Generation#

Replay generates Playwright or Cypress E2E tests based on the recording. This ensures that your new modern component behaves exactly like the legacy screen. If the legacy system threw a specific error when an invalid IBAN was entered, the generated test ensures the new system does the same.

Step 5: The Strangler Deployment#

Deploy the extracted module as a micro-frontend. Use a reverse proxy to serve the new React module for that specific ERP route while keeping the rest of the legacy system intact. This is the "Strangler Fig" pattern, but accelerated by visual extraction.

Addressing the "Black Box" Problem in Regulated Industries#

For Financial Services, Healthcare, and Government, "I don't know how it works" is not a valid legal defense. Regulators require that you understand the logic governing data processing.

Manual reverse engineering is prone to human error. An architect might miss a specific conditional branch in a 5,000-line stored procedure. Replay provides a visual audit trail. Because the extraction is based on recorded video of real system behavior, you have a "Video Source of Truth" that links the new code back to the legacy action.

• •SOC2 & HIPAA-Ready: Extraction happens within your secure perimeter.
• •On-Premise Availability: For air-gapped manufacturing or government systems, Replay can run entirely locally.
• •Auditability: Every generated component can be traced back to the specific user session it was extracted from.

💡 Pro Tip: Use Replay’s AI Automation Suite to generate documentation as you extract. It can write the READMEs and Confluence pages that your team has been avoiding for a decade.

Frequently Asked Questions#

How long does legacy extraction take compared to manual coding?#

Manual modernization typically takes 40-60 hours per screen when you account for discovery, documentation, design, and coding. With Replay, the recording takes 10 minutes, and the initial code extraction takes seconds. Even with developer refinement, the total time per screen is usually under 4 hours.

What about business logic preservation?#

This is the core strength of visual reverse engineering. Because we capture the output of the business logic (the API requests and UI changes), we don't need to read the legacy source code. We replicate the behavior. If the legacy system calculates tax in a specific, weird way, Replay captures the resulting data and ensures the new front-end handles that data correctly.

Can Replay handle home-grown legacy systems with no APIs?#

Yes. Even if your legacy system is a "monolith" with tight coupling, Replay can extract the UI layer and document the internal state transitions. This allows you to build a "Bridge API" that mimics the legacy system's expectations, facilitating a phased migration.

Does this work for mainframe-backed ERPs?#

Absolutely. Whether the backend is COBOL, Java, or .NET, if it has a web-based or terminal-emulated front end, Replay can record the workflow and extract the logic. We focus on the interface where the business value is realized.

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Ready to modernize without rewriting? Book a pilot with Replay - see your legacy screen extracted live during the call.