Steps to Legacy Modernization

Involve senior management :
The stamp of approval from the senior management gives these efforts the authority and backing they require to succeed.

Allocate a budget specifically for the task:
Companies are far more successful at updating old applications when they have a budget specifically set aside for the task. Ideally, that budget can be gathered up from the cost savings initially realized through application portfolio management.

Apply portfolio management practices:
This means eliminating useless applications, and possibly moving old software into newer, cheaper hardware; perhaps through virtualization. Legacy modernization ought to begin with this process of identifying useless software and code within a company's application portfolio.

Next steps:
Identify the applications that will soon be without shepherds in the organization. Visiting human resources and getting a list of IT job titles and the corresponding time to retirement for the person in each position can start this process These dates must be commensurate to the time frame for the project to be completed.

There are also software tools that can help in the modernization effort such as those from SoftwareMining that translates old COBOL applications to "maintainable" java code.