Are Legacy Systems holding your business back?

Are legacy systems holding your business back?

We use a huge number of legacy systems within our business environments, which often hold a considerable amount of historical data. With the rapid pace of technology, it may seem understandable why many of us fail to keep up, especially with uncertainties around new systems and concerns surrounding costs. The result is that sometimes it can seem easier to do nothing. However, taking a ‘better the devil you know’ approach to core business systems can seriously impact business capabilities. 

What are legacy systems?

A legacy system includes outdated computer systems, programming languages or applications software that is being used instead of upgraded versions. Legacy systems are outdated and, as such, can no longer receive the necessary support and maintenance they need. However, in spite of being outdated, the systems are still essential for the companies using them and can’t easily be replaced. 

Legacy systems aren’t necessarily old. Rather than antiquity, the term relates to the discrepancy between the current state and what the legacy system provides. Legacy systems are often closely tied to business functions and aren’t easily updated for a variety of reasons. Frequent characteristics of legacy systems include:

  • Cost - the system was expensive to implement and needs many years to be amortised.

  • Processes - business processes have been tailor-made to work around legacy systems.

  • Data - operational risks of updating systems can seem too high if there is a chance or critical data or business rules being lost or corrupted.

  • Specification - legacy systems rarely have a complete specification making it impossible to specify identical functionality in a replacement system.

People often fear the unknown. It can seem easier to leave things as they are and not make any changes, even if better solutions are available. As a result, legacy systems are everywhere, in businesses big and small across all industries. 

Why do businesses still use legacy systems?

As we’ve touched on, many organisations still have a diverse collection of legacy technology platforms. There are many reasons that this can happen including past mergers, the failure to keep up with technological developments or a reluctance to budget for development. Legacy platforms will, of course, have once been efficient and fundamental to daily operations. However, like all of us, if they are not looked after they don’t tend to age well. As they continue to be used, they can become a burden with increasing costs and an inability to scale with new business requirements.

However, in spite of the apparent reasons why systems should be updated, many businesses are reluctant to do so. The cost of change and perceived difficulties of integrating legacy systems with new solutions can seem overwhelming. The result is that a vast number of businesses hold on to their legacy systems. What they aren’t considering, however, is the true business cost that will result from not bringing their data management capability in line with today’s requirements. 

How legacy platforms impact upon business

While it can seem an insurmountable task to some, businesses are much more likely to be negatively impacted by retaining their legacy systems than by taking action. Although it may seem that legacy platforms are fundamental to business, the chances are they are more than likely having a negative impact:

  • Cost - as legacy systems age, they become more costly to maintain as does the underlying infrastructure. Vendors can increase charges as businesses become reliant on them, and internal knowledge becomes increasingly scarce.

  • Size - many legacy platforms were built to solve big business problems and included a huge amount of custom code, much of which isn’t applicable to the organisations using them. 

  • Productivity - delaying data delivery to end-user applications and reports can significantly lower productivity

  • Speed - legacy systems often don’t quickly and easily provide business users with the data they require

  • Compliance - legacy platforms are often non-compliant with new regulatory requirements on data quality and due process

  • Security - once legacy systems are no longer supported, they become more vulnerable to hackers, malware and data breaches.

Legacy systems often don’t integrate with new ways of working and the disconnect of data can impact upon an organisations ability to innovate, develop new products and respond to market changes. The lack of flexibility and agility of legacy systems also makes it difficult for businesses to meet customer expectations. Data can be trapped in systems and disconnected from the rest of the organisation, hindering collaboration and innovation. It’s been reported that the impact of legacy systems is costing companies a combined $140 billion annually in wasted time, resources, duplication of effort and missed opportunities. 

Ultimately, since legacy systems were first deployed, there have been many advances in technology and business processes. Everything from product development to sales and accounting has evolved, and these modern practices require adaptation. Holding on to legacy systems and putting up with inefficient workarounds is a convoluted process. 

Why should you modernise your legacy systems?

If you want to be able to move forward, innovate, collaborate and deliver upon customer expectations, then it’s probably time to modernise your legacy systems. It is only by modernising that businesses are able to harness the digital technologies they need to grow and become more efficient. It’s been reported that nine out of 10 IT decision-makers believe legacy systems are significantly impacting their company's ability to grow. 

The legacy systems we use to budget, process orders and gain approvals were built to help our businesses function. However, the reality is that these functions are now overly complicated. Having multiple systems in place can force employees to jump between systems with varying degrees of functionality. This hugely impacts on productivity and prevents businesses from reacting in a timely manner. It’s impossible for employees to be productive if they spend vast amounts of time on administrative tasks.

Ultimately, legacy systems and ageing infrastructures create a drain on company resources. The answer is modernisation, alleviating the related issues and creating new business opportunities. 

How to modernise legacy systems?

There are several strategies for modernising legacy systems. These include re-platforming, re-hosting, re-coding, re-factoring, re-architecting or re-building. In the case of applications that date back decades and aren’t optimised for mobile experiences, sometimes the best option is to entirely re-platform. However, that isn’t always what is necessary. At its most basic, modernising legacy systems is about taking the DNA of existing systems and improving upon them so that they can more adequately meet business needs. 

Businesses need to invest in the right tools and technologies to overcome the impact of legacy platforms. The initial cost of new solutions can be off-putting but, by delaying modernisation, the associated risks and costs are only likely to increase. By holding onto legacy systems and resisting change, the chances are you will only be holding your business back.