Reengineering vs Refactoring vs Rebuilding: What’s Best for Your Software?

Stop tolerating longer deployment cycles, high risks of outages, and growing costs caused by legacy software. The proper combination of refactoring, re engineering, or rebuilding is the path to remove these issues and open your business for integrating new technologies, such as AI, automation, or cloud services.
Outdated technologies prevail in the modern business world:
● Over 70% of the software used by Fortune 500 companies is at least 20 years old.● Up to 80% of companies’ IT budgets are spent keeping old IT systems afloat.● Each year, legacy systems can become 15% more expensive to maintain, according to the research by Gartner.● Legacy technologies increase security vulnerabilities by 36%.Timely modernization can save up to 50% of maintenance costs.

That said, what’s the problem with old technologies? Can businesses continue using them, or should they replace all their systems with the more advanced ones?

We’ll describe the three approaches to handling legacy software – refactoring, reengineering, and rebuilding – and give you a framework to decide which fits your business best.

The Legacy Challenge: Why Refactoring, Reengineering, or Rebuilding Matters

Legacy systems don’t merely look old; they can be packed with visible and hidden issues that hinder performance, compromise security, and raise costs.

Frameworks are no longer supported, updates are unavailable, and competitors outperform you by adopting new technology. Ultimately, delayed modernization leads to higher expenditures on maintaining old code in terms of time, money, and effort, while the overall performance doesn’t improve.

Major legacy issues include:

● Extended deployments;
● Delayed features;
● Blocked integrations with new technologies;
● Excessive maintenance costs.

How can refactoring, reengineering, and rebuilding mitigate legacy challenges?

Refactoring, reengineering, and rebuilding are established strategies for dealing with legacy systems and modernizing them timely. Each has its specific purpose, scope of work, risks, and benefits.

Think about maintaining a house. Sometimes, small fixes keep it sleek. Another time, structural change is needed.

In this sense, it is similar to your software, which can be supported for a certain while by refinements and upgrades. However, a total overhaul isn’t always necessary. When the software ages and becomes unsustainable, components can be isolated and modernized gradually. To unlock the real value, you should act timely, matching your approach with business goals, risk tolerance, and technical debt profile.

Refactoring: Optimizing Legacy Code Without Changing Its Core Behavior

The software refactoring process cleans your code and improves its structure, making it easier to add new features.

When does software refactoring fit?

When you have a functional and valuable product that runs well, but the code is messy and complicated in maintenance. In this case, refactoring reduces tech debt, spurs productivity, and prepares the system for bigger changes.

When can refactoring pose risks?

●  Refactoring doesn't fix broken architecture. Igor Omelianchuk: “If the overall design is outdated, you can spend all your time polishing the code, but scaling or integration issues will remain unattended."● Refactoring may be ineffective without automated tests. In this case, you risk introducing new bugs or even breaking the system. But if you have properly arranged tests, refactoring can reduce technical debt and expedite development.● You shouldn’t try to refactor everything, rewriting the entire code from scratch, when a deeper reengineering effort would have been enough. Otherwise, you risk wasting your time without solving real problems.

Refactoring examples

Case #1: Software restructuring for a heavy legacy load

We worked with a healthcare company that inherited an old codebase written by several different teams.The client was facing several problems:● Development speed slowed down;● The number of bugs was escalating;● The code had no test coverage.

However, a tight timeline required starting refactoring without tests. Ultimately, our team achieved the desired result, but at a longer time and with larger effort, since they had to continually fix new bugs and restore lost functionality.

The takeaway: start with a characterization test and refactor only after that.

Case #2: Addressing legacy dependencies

Another example deals with the project built on .NET Framework.

The client’s issue lay in legacy dependencies that limited further development as modern libraries and tools were no longer compatible with the .NET Framework.

Our team initiated and planned the refactoring process, replacing outdated libraries with modern equivalents, modularizing core classes, and improving code structure to reduce framework-specific coupling.

Ultimately, we evolved the codebase to empower effortless future migration to .NET Core. The modernization was implemented incrementally, without disrupting the delivery process.

The takeaway: careful planning and a strategic approach from the start empower smooth and predictable project implementation.

Reengineering: Redesigning and Modernizing Existing Systems

System reengineering is similar to minor-to-medium house repairs or replacements. For instance, installing energy-efficient windows preserves warmth inside your house, thereby saving you money on heating.

In technical terms, reengineering means a deeper transformation than refactoring. It encompasses analyzing an existing system and transforming it into a new and improved form. The typical shifts associated with reengineering include redesigning architecture, migrating platforms, or modularizing monoliths.

When does software reengineering fit?

Re engineering is a way to go when a simple cleanup isn’t enough to improve scalability, security, or performance.
● Your architecture is unable to accommodate new features;● You need to migrate to the cloud or integrate new business models;● You fail to keep up with continual changes and updates in compliance requirements, such as SOC2, GDPR, ISO.
Andrew Lychuk highlights the main reengineering benefit: “Reengineering allows you to evolve incrementally while retaining business continuity.”

Which risks can code reengineering pose?

● Without careful planning, you can end up with an endless project;● Reengineering is more expensive and requires thoughtful investment;
● Avoid superficial fine-tuning without appropriate architectural change. 
Igor Omelianchuk illustrates: “Companies love just moving their legacy systems to the cloud, believing they’ve fulfilled their modernization. What they actually do is transfer their old problems to a new hosting bill.”

Software reengineering examples

Case #1: Modernizing a monolithic construction for a social service platform

The client’s problem stemmed from a monolithic architecture, which initially was the right choice but created restraints as the team and the codebase grew. The system fell far below the requirements for scalability, availability, minimal downtime, and performance, also posing maintenance and update challenges.

We suggested approaching the transformation with a phased delivery, where a system is gradually moved to a service-based architecture. Our first step was a transfer to a modular monolith, which simplified a future transition to a distributed architecture.   

This approach made development and support smoother, minimized downtime, and expedited the delivery of new features, enabling higher flexibility.

The takeaway: a step-by-step reengineering is a reasonable tactic that ensures business continuity and makes transformation more predictable.

Case #2: Failed microservices push for a healthcare company

The project of modernizing a monolith with extensive functionality in the healthcare sector. The problem was similar: slow development cycles, expanding maintenance costs, and the desire to scale up the team.

The client sought a shift toward a microservices architecture, which is rather expensive to maintain and requires a larger staff. Although the team extension was envisaged, the client cancelled this decision during the project.

The extra expenses inherited from maintaining the new architecture and the lack of in-house developers complicated the process and led to missing deadlines, higher costs, and impeded future development.

The takeaway: 

1. Do not join the client in trend-chasing but rather analyze whether the required solution truly meets business goals. 

2. Considering the specifics of the microservices architecture, alternative options could have been more beneficial.

Rebuilding: Starting From Scratch to Eliminate Legacy Limitations

If a house falls apart over the years or in a disaster, repairing bits and pieces won’t bring it back. It’s probably time to construct the new one from the ground up.

In software modernization, rebuilding generally implies throwing away the old system and creating the new one from scratch. Many software development teams favor this option since they strive to avoid the hassle of repairing the existing code.

When does rebuilding fit?

Rebuilding is valuable when the existing design can’t sustain business operations anymore, the platform has reached the end of its lifecycle, or if the owners decide to radically change their product. It works when there is no other obvious way to modernize or when the technology used is no longer supported.

While rebuilding can exponentially increase performance, scalability, and security, it should be applied mindfully, only when the previous two approaches won’t “save the horse.”

“Developers may get tempted to perform a complete overhaul,” explains Andrew Lychuk, “but most rewrites fail because they underestimate the complexity in the old system.”

What are the risks of rebuilding?

● The whole process is expensive and can cause trouble if done wrong.  ● alue is delayed until new system reaches feature parity (often years);● Budget explosion and overruns are very common;● Hidden business logic from the previous system can get lost.● The in-house team may be unable to conduct a competent rebuild if they lack experience with the newest technologies. Then, a specialized vendor can help.  

Case #1: Modernization to meet compliance requirements

The client came up with the project using old ASP.NET web page technology.
With the existing system, it was impossible to meet new demands for usability and performance.

As the task implied alignment with more stringent quality requirements, we decided to rebuild the web part as a single-page application using Angular with ASP.NET Web API. Since ASP.NET Core didn’t exist at that time, the core logic was moved into a separate library, and the ASP.NET Web API service was developed simultaneously. The traffic was then redirected from the old system. It was left functional alongside the new one to serve as a backup in case of issues.

Ultimately, the product fully met the quality requirements, and the transfer caused no disruption to business operations.

The takeaway: A clear goal with the right strategy and tech stack makes the execution smooth and efficient.

Case #2: Addressing a heavily accumulated legacy code

The client operating in the sports industry had a project lasting for over seven years, with numerous features and an abundance of legacy code. The client requested a new version built with the microservices architecture.

We decided to split the project into two parts: one team supported the old version, while the other team constructed the new one. The issue emerged when we realized that each feature had to be developed twice: for the old and for the new system separately.

The goal was eventually achieved, but the doubled scope of work led to an increased timeline and budget.  

The takeaway: an incremental migration would have saved time and resources, removing the need for duplicated efforts. 

Andrew Lychuk summarizes: “Sometimes, instead of a full rebuild, we recommend a hybrid approach, which implies rebuilding pieces incrementally, like with a Strangler Fig Pattern. The old system continues running, while you gradually replace the old code with a new one, module by module. Eventually, you get the benefits of a new stack faster without exposing your business to a full tech revamp.”

Q/A and Conclusion: Choosing the Right Path for Your Legacy Transformation

Every software product will become legacy once. What businesses can do is maintain it until it is still viable and rebuild it when nothing else can save it. For this purpose, a company should find the right balance between rebuilding, refactoring, and reengineering.

Several common questions will give you a more practical angle.

How do you measure if refactoring or re engeniering saved money for the client?

We track financial metrics tied to development hours, infrastructure costs, and maintenance reductions. They show how much time we spent on building and the costs before vs. after.For instance, to estimate the payoff when migrating to the cloud, we compare the costs of rebuilding against the savings on improving the existing system.

Which type of software usually requires the most long-term support?

In terms of scope, it’s enterprise-level software. It often integrates with dozens of internal and external systems, and each integration has its own update cycle, making maintenance extremely difficult. One broken dependency can disrupt the entire department, while the internal bureaucracy often complicates the fixes.
That complexity makes modernization a top priority for such businesses.

What's the hardest part for you personally?

It's APIs. When integrations stop working, the operations suffer immediately. We've had cases where a single broken API blocked financial reports for days. This is one of the main pains for businesses operating in aging systems.

Will the legacy software market shrink as companies adopt new tech?

On the contrary, it will grow. Every product built today, as well as the newest tech, will eventually become legacy. Therefore, the demand for software redesign will only rise.

If I’m hesitating between refactoring or rebuilding, how much would a consultation with you cost?

The first introductory meeting will be free. We have a call, go through your use case, and then draw a clear picture of the options for your business. Even if we don’t sign a contract eventually, you’ll have a framework for an informed choice.

To wrap up, understanding your system is crucial to determining the right path for further growth. Andrew Lychuk explains how experts can help: “The first step is a structured assessment of your system. We identify where you are bleeding costs, what blocks your growth, and what risks you carry by staying on legacy tech. The result would be a clear plan, what to refactor, what to re engineer, and where a rebuild may be necessary.”

Set up a free introductory meeting with us, and let’s start your mindful modernization.