From Monoliths to Microservices: Using AI and LLM’s to Modernize COBOL Applications 

How VE3 is Helping Enterprises Transform Legacy Systems into Agile Digital Platforms?

In the world of enterprise IT, COBOL still runs the show behind the scenes. From core banking systems to insurance policy engines and government mainframes, these monolithic COBOL applications are deeply entrenched in critical business processes. But they come at a cost—technical debt, agility constraints, and talent scarcity

As a digital transformation partner to some of the UK’s most complex enterprises, VE3 understands the challenges that large organisations face when modernising legacy infrastructure. What was once a robust and reliable monolith has now become a barrier to agility and innovation. 

But thanks to Large Language Models (LLMs) and advancements in AI-assisted refactoring, the game is changing. VE3 is helping enterprises modernise their legacy COBOL ecosystems—not by rewriting everything from scratch, but by incrementally evolving monoliths into modular, API-first architectures powered by AI. 

The Legacy Challenge: COBOL and the Monolithic Maze 

Let’s face it: legacy systems are hard. 

  • Thousands of COBOL programs, deeply intertwined 
  • Decades-old business logic, undocumented or tribal knowledge 
  • One gigantic relational database underpinning it all 
  • Every change is a risk, every enhancement is slow 
  • Modern talent avoids COBOL, and retiring developers leave gaps 

Yet, these systems are mission-critical. Replacing them in one go is not just impractical—it’s a business risk. What’s needed is a safe, intelligent path to modernisation that brings agility without breaking what works. 

Enter AI and LLMs: A New Era of Intelligent Refactoring 

LLMs like GPT-4 and domain-specific models can now read, understand, and generate COBOL, opening up new possibilities: 

1. Automated Documentation & Code Understanding 

Using AI models trained on legacy codebases, VE3 can generate: 

  • Functional documentation of legacy COBOL code 
  • Data flow and dependency maps 
  • Business logic narratives 
  • Entity relationship visualisations 

This helps reduce onboarding time, enhance compliance understanding, and establish a foundation for future refactoring. 

2. AI-Assisted Refactoring into Microservices 

VE3 uses AI-powered tooling to: 

  • Identify logical domains within the COBOL monolith (e.g., Customer, Claims, Billing) 
  • Extract these into modular services while preserving business logic 
  • Create interfaces (e.g., REST APIs, SOAP endpoints) for dual run capability 
  • Refactor common functions (e.g., authentication, data validation) into shared components 

The original monolith can continue running, but it now delegates specific tasks to new modular services, allowing for progressive modernisation. 

VE3’s AI-Powered Legacy Modernisation Approach

At VE3, our approach blends human expertise, AI tooling, cloud-native architecture, and industry context

1. Discovery & Analysis 

  • Use LLMs and custom analysers to document the current COBOL estate 
  • Identify business capabilities and coupling patterns 
  • Perform dependency and risk mapping 

2. Intelligent Domain Extraction 

  • Use AI to identify and isolate functional domains (e.g.,Customer Management”,Policy Renewal”) 
  • Apply domain-driven design (DDD) to extract logical boundaries 

3. Code Refactoring & Interface Generation 

  • Refactor COBOL code into callable services 
  • Generate OpenAPI specifications for seamless integration 
  • Deploy services as containers or serverless functions using VE3’s cloud-native accelerators 

4. Interoperability & Dual-Run 

  • Legacy system continues to operate, but delegates to new services 
  • Enables safe, gradual rollout with fallback capability 

5. Continuous Improvement via Observability 

  • Instrument services for observability (logging, tracing, metrics) 
  • Use VE3’s AI-powered ops tools to monitor performance, errors, usage patterns.

Real-World Impact: Why Enterprises Are Choosing This Path 

Before VE3 

🚀 After VE3 

Spaghetti COBOL code 

Modular services with clean interfaces 

Manual documentation 

Auto-generated insights and maps 

Weeks to onboard new devs 

Hours to understand context 

All-or-nothing migration risk 

Safe, incremental rollout 

Inflexible mainframe integration 

API-first architecture 

Hard-to-replace skills 

Platform-agnostic delivery 

Why VE3?

As a trusted transformation partner across finance, healthcare, government, and energy, VE3 brings: 

  • 🔹 AI and LLM Expertise: Domain-trained models to understand and modernise COBOL. 
  • 🔹 Cloud-Native Delivery: Accelerators for AWS, Azure, GCP, and hybrid environments. 
  • 🔹 DevOps and CI/CD: Enablement for faster test, deploy, rollback cycles. 
  • 🔹 Security & Compliance: ISO 27001, NHS DSPT, Cyber Essentials Plus certifications. 
  • 🔹 Strategic Thinking: Alignment with business capabilities and KPIs, not just code refactoring. 
  • 🔹 Partners That Scale: Collaboration with IBM, Microsoft, Oracle, and more. 

Ready to Modernise Without the Rewrite? 

VE3 empowers organisations to evolve their legacy systems using the power of AI, rather than fearing it. Instead of throwing away decades of business logic, we help you elevate itinto modular, maintainable, future-ready services. 

👨‍💻 Whether you’re running COBOL on z/OS, VMS, or a mainframe emulator in the cloud—we can help. 

📩 Get in touch with us to learn how VE3 can apply LLMs and intelligent refactoring to your legacy estate, step by step. 

Modernisation doesn’t have to be a revolution. With VE3, it’s a smart evolution. Contact VE3 or Visit our Expertise for more.

EVER EVOLVING | GAME CHANGING | DRIVING GROWTH