Sticking to Legacy Systems: A Costly Mistake

In an increasingly technology reliant world, industries are steadily initiating a transition online to becoming data-first businesses. Not only is this more cost-effective, but it is also more sustainable and profitable for a number of reasons.

  1. Data and analytics can reduce technology silos
  2. Identify the most profitable avenues for the business
  3. Headhunt the most valuable talent, among other uses

Despite this, some enterprises are still sticking to their legacy systems.

What is a Legacy System?

Legacy systems are information applications that are based on outdated technologies. They cannot be upgraded or expanded.

These include computing software or hardware that still meet their original requirements, but nothing more. Some examples are paper files, obsolete programming languages, or outdated data outlets.

Here we break down issues that sticking to a legacy system can bring. Explaining why it can be such a costly mistake for your business!

They Create Data Silos

London Loves Business pointed to research on how legacy systems slow businesses down. The research noted that:

The existing large software systems (legacy systems) have never been built to cope with the current business requirement due to their poor coding, design structures, logic, and documentation. Moreover, Legacy applications have various problems such as lack of up-to-date documentation, skilled manpower, resources of the legacy applications, and high maintenance costs.

Given how legacy systems, by default, are outdated in their methods, this makes it difficult to migrate any pertinent data. Creating data silos rather than centralised data sets, the latter of which enables companies to store, collate, and analyse large swells of information at virtually any given time.

Data silos are inevitable by-products of legacy systems since these were never designed to integrate with each other anyway. A common example of data silos are paper files, which Verizon Connect explains are:

  • Time-consuming
  • Prone to miscommunication
  • Susceptible to human error

Digitising this process creates an instant electronic paper trail, automatically shares crucial information to teams, and allows remote employees to update databases.

Maintenance and Scalability is Nearly Impossible

Maintenance of a legacy system is costly and nearly impossible. Some obsolete examples include the likes of Microsoft’s Visual Basic, which reached end-of-life and end-of-support status in 2018. Ironically, although all these inflexible systems meet the same fate as Visual Basic eventually, Cybera says that the average retailer still spends 58% of their overall IT budget on legacy system maintenance!

More or less throwing money away, since maintaining this status quo stunts company growth. The lack of scalability in legacy systems prevents you from being agile and flexible to meet market demands. Take the accelerated digital transformation pushed by the pandemic for example.

With transactions, purchases, and data sharing becoming reliant on digital competence. A company unable to move forward, cannot possibly satisfy the increasing data traffic and consumer expectations.

Significant Cybersecurity Vulnerabilities

In 2020, CPO Magazine shared that the average data cost was £2.72 million. As more hackers become tech-savvy, the outdated security protocols of legacy software (such as hard-coded passwords) cannot keep up.

Because legacy IT strategies utilise a ‘fix-as-needed’ or ‘enterprise IT’ approach rather than a ‘lean IT’ approach, vulnerabilities take time to address. Considering that legacy systems cannot be updated, the maximum security capabilities they offer cannot be expected to keep up with more sophisticated attacks. In the long run, a company’s reputation can take a hit as, understandably, no vendor wants to stake their money on a vulnerable system.

Poor Employee Experiences

In 2019, G2 released their State of Software study which showed that more than 50% of respondents said they were unhappy at work due to the software they use. This can have a negative effect on employee engagement, which according to Forbes can translate to over £2 million lost per year.

Legacy systems will not only put you behind your competitors, they will also significantly slow down the productivity of even your most capable team member. Training new employees on legacy systems is also expensive and time-consuming, as you may have to involve a legacy systems specialist to teach them—and to an extent, even unteach them methods and techniques they’ve picked up from past employers.

Modernise your Digital Ecosystem

There are many reasons why enterprises slow the process of moving away from legacy systems. However, in a rapidly digitising world, the only way to survive and thrive is if a company is able to harness the power of data, centralisation, and scalable software.

We’ve got some excellent overlay technologies that can modernise legacy systems or shift straight across to an as a service (SaaS) model. Explore today.

Reese Jones

Reese is a former UX designer. She enjoys writing about multiple topics, including digital transformations in different sectors of society and how AI is changing the business industry.

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