Dynamic characteristics of rotor dynamic systems, namely natural frequencies, damping and mode shape, vary with rotation speed due to gyroscopic effect. To consider such effect, modal analysis is required to be performed while in operation. A new method, namely Impact-Synchronous Modal Analysis (ISMA) utilising the modal extraction techniques commonly used in Experimental Modal Analysis (EMA) but performed in the presence of the ambient forces, is proposed. ISMA applies Impact-Synchronous Time Averaging (ISTA) technique which is effective in determination of dynamic characteristics of a rotor dynamic system while in rotating condition. Based on experimental modal data, the effectiveness in open crack detection on rotor shaft is established. Lastly, the concept of virtual instrumentation is introduced here to overcome the limitation imposed by the conventional FFT analyzers without going into the other extreme of software development. The software also enables complex and expensive hardware to be replaced. This package should be very useful to the engineers and professionals who are working on vibration troubleshooting and maintenance.