Top 13 Reasons to Modernize Your Legacy Systems
Today, a common business bottleneck for many companies is facing different problems with their outdated software systems. When I talk about outdated systems, I mean legacy systems. Systems, which have their legacy burden on your organization. To change your legacy system is a tough decision and it may require a long implementation process. It is a matter of calculating the risk of migration, cost, adoption resistance, and many other factors.
Owning an old and outdated software is not as cool as owning a retro car. Its value does not go up in the long run. On the contrary, it starts to accumulate errors, bugs and other issues that can directly contribute to customer frustration, especially in the case where such a system is exposed to the internet. In most of such cases, you are not prepared to act fast and fix legacy issues as soon as possible. All of this may cause your enterprise great loses and even in some cases bankruptcy.
To avoid this and below mentioned problems, you need to seriously think about transforming your legacy systems as soon as possible. This is not an easy decision. It takes careful planning and a solid implementation partner.
1. Integration, Scalability and Compatibility issues with the new systems, tools, and apps
No matter how old your software is, it needs to be able to integrate well with other tools and applications that you use to run your business more efficiently and effectively. For example, implementing a new CRM with or adding live chat functionality to your website is some of the updates that you probably will need to match. Therefore, you need a system that is capable to handle these integrations in a manner that does not break your processes.
If you fail to implement such kind of business flexibility through technology, because you are hog-tied by your decade-old legacy systems, expect that most of your customers would rather find another provider. They will not be keen on losing their time, requesting assistance by phone when other providers allow them to automatically get assistance via a chat bot for example.
“Our experience throughout the years has shown that transforming the legacy systems of customers has turned-out to be significantly less expensive and more efficient than losing precious time to deal with rusty software solutions. Especially when it comes to the ability to integrate customer systems with various business systems like CRM, ERPs, HRMs etc. Struggling with business flexibility because there is no compatibility between systems has led to losing market positions for many businesses. “
Metodi Amov | Marketing Director | ScaleFocus
Compatibility issues are quite common with legacy systems. Old-fashioned systems require an excessive amount of custom-code to make them work with new technologies, modules, and tools. In most cases, they completely fail to provide any straightforward compatibility options. Adding new apps or tools to help in making your business more efficient is important and can be achieved by upgrading your legacy software.
If you are chained to your old systems and tools, unable to innovate and utilize modern technologies like Artificial Intelligence, Virtual Reality, Automated Chat Bots, and Augmented Reality, I have bad news for you. Chances are your competitors have already integrated those new approaches and taking benefits from them. These technology trends help your competitors to optimize their performance, costs and utilize them to acquire new and retain existing customers. This means you will continue to lose your customers and revenue, and you are putting your enterprise at risk.
I already mentioned your customers but consider the impact of everyone else using your outdated software. Legacy systems typically support file and data formats to a certain version and development point in their lifecycle. Most formats have evolved beyond what the legacy system can handle. Companies are stuck using old formats that their clients, partners, and suppliers may not be able to use anymore. Even worse, most digitally mature companies may not be willing to use these outdated solutions. So make sure to consider your partners, distributors, suppliers, agents and other companies or people who are part of your ecosystem and engage with your systems.
To prevent similar situations and bottlenecks with computability issues you need to modernize your legacy systems
2. Security threats
There are many reports like the one from ResearchGate on behalf of Verizon and another one from Symantec out there that claim different statements about legacy systems’ usage and all of them are united around the statement that outdated systems are vulnerable to malware and breaches. They are less resistant to cyber-attacks and harmful software. What seemed secure 5 to 10 years ago, now is not reliable.
A fairly widespread reason why legacy systems are not secure is that the vendors stop their support. In such a case, the legacy systems lack updates, patches, new modules, and functionality, adhering to newer software standards. After stopping one system’s support it fairly quickly becomes non-compliant with the latest security standards and has no security treatments against the latest malware.
3. Slow, crashing and poorly performing legacy systems
Slowing operational speed over time, having multiple glitches, taking ages for you and your team to perform standard tasks are reasons for you to consider changing your legacy systems. All these factors are telling you that your software is either outdated or it is of low quality.
To improve the performance and efficiency of your outdated systems you need to improve the process of software quality management and testing, or you need to reengineer and improve your infrastructure or software legacy systems completely.
Waiting several minutes for a report to load might not seem like a big deal at first glance, but what will happen if hundreds of your employees lose these several minutes every day for a year? This is a huge waste of precious time and it will cost you more than you can afford.
4. Discontinued vendor support of a legacy system
Running a third-party software!? If so, you depend on the vendor for updates and maintenance, no matter if you like it or not. One of the problems you may hit is that the third-party provider can be unstable and fail for bankruptcy or could be acquired by another company with intentions to depreciate the product you are using. If this happens you will need to reconsider your software solution choice very soon.
When a vendor simply terminates the support for the legacy software that you and your organization use because it concludes its lifecycle, it is more than a clear sign that you need to choose another vendor to support you or to change the system with a new and modern one. If you don’t want to take advantage and decide to stick with the outdated solution, which is no longer supported, you will not receive updates nor be getting assistance fixing any issues. You will not be able to use your warranty when the system fails to produce the expected results. Moreover, you can lose important business data, which will result in losing time, money and other precious assets to recover.
5. Device-dependent legacy systems that lack mobile versions
The mobile first web is been here for a while, and every business needs to update its’ systems accordingly. From end customers applications to internal business process management tools, more than 89% of the organizations surveyed by Red Had have already partially implemented mobile app strategy in their day to day business activities.
If your company and business processes cannot be accessed from any mobile device out there, you are definitely behind your competitors in terms of performance and revenue. Moreover, cloud-based and SaaS products outperform any other on-premise systems in terms of overall performance, access and usability, maintenance and support, third-party integrations ability and more.
Flexibility is very important for companies that require working in the field, such as construction, warehouse control, oil and gas production, or logistics. If you want to significantly improve your business performance and inventory management of your employees, you need to migrate and start using mobile devices instead of pen and paper.
If you and your organization are not ready for a complete software modernization, it is possible to at least introduce partially an enterprise mobility strategy. Your legacy systems can be complemented by mobile apps and tools, which augment some features and provide additional benefits to your business. But, you are obliged to consider possible integration issues: outdated systems often require a significant amount of custom code and workarounds to be able to run with the new trends and tools.
6. Hardware dependency, which leads to excessive resources usage
Do you still need to host most of your business software and data on-premise? If yes, chances are it is already outdated or you need a fresh approach towards IT cost relocation and data strategy in the company. The cost of ownership of such software solutions is very high due to operational and administrative expenses. There are services like Google Cloud Platform, Microsoft Azure and Amazon Web Services that you can use, and you will not even need to own a server to efficiently run your business and processes.
Most of these service providers will give you insights about the possible cost of savings using cloud vs software and hardware on-premise. Statistics show that on average, cloud solutions will save you about 65 percent of your IT infrastructure costs over the first 3 years. And this is not the final result, because the more servers you need to run your business, the bigger your cloud benefit.
Enterprises with big budgets, data centers, and complex applications are now looking to take advantage and implement cloud technologies to run their core business applications at a reasonable price, claim Forrester. Furthermore, when you run your apps in the cloud, your provider takes responsibility for keeping your systems up. If you choose a trusted software and cloud provider, you will not have to worry about bugs, system failures and outage possibilities at all.
7. Legacy systems users need special skills and extensive training
Legacy software typically is not user-friendly, difficult to work with and with the clumsy interface, especially the one that was built back in the early nineties. It does not cover the latest UI standards or device specifics. You will need to train your new employees to work with old-school software. This is not reasonable. To become familiar with such systems and start using them as fast as possible will take too much time for your target audience.
Today’s business systems are with powerful informational architecture, rich navigation options, and strictly defined visual elements and style. Your employees are using intuitive, personalized mobile and web applications for their personal purposes. These apps offer them the latest but well established UX experience and follow clear user behavior criteria. They are intuitive and easy to interact with. If you have to make such people adapt and learn to interact with legacy systems on one had it will frustrate them and on the other, they will be ineffective.
Changing your legacy system with a new, modern and properly implemented one will save time and optimize processes within your enterprise. Additionally, you will save money, because of not hiring and training new employees to maintain your older systems. As the average cost-per-hire is rising globally this on itself is a solid reason to consider legacy system transformation.
As stated in a study by the National Association of Colleges and Employers, hiring an employee in a company with 0-500 people costs an average of $7,645. Another study by the Society for Human Resource Management states that the average cost to hire an employee is $4,425. According to Glassdoor, the average company in the United States spends about $4,000 and 24 days to hire a new employee. This is an example of how much it will cost you keeping and managing your legacy systems if you add a couple of specialists just for maintenance of older systems.
8. The system no longer solves your business problems
Maybe, when you installed your current software system, it might have been the perfect solution, meeting all your business needs. But today, as your business changed it is not. Why should you compromise your business efficiency and revenue, just because a software system cannot keep up with the new challenges?
Typewriters are absolutely stunning! They have their special charm and manage to get work done, or at least a part of it. But how can you make a hundred copies of a book and send them to the publisher using a typewriter? Most importantly, why use a typewriter, a copy machine, and a postal service, when your laptop can solve all these three problems at once in no time, sending an email?
Your enterprise is constantly evolving. If not, it should be! Your software must be able to keep up with changes in your business model, processes, or simply the scale of operations. If your systems lack this ability and no longer solve your business problems, you will end up adapting your business to your software and that will set you back behind your competitors.
For example, if you open a small local store and invest in a custom POS terminal and a simple transaction management system, chances are, it will not be able to handle your business growth and to serve your needs when your store becomes an international retail chain.
The questions you need to ask yourself about the software you are using are:
- Can your software support increase productivity?
- Is it possible to expand the software along with your organization’s expansion?
- Will it be able to scale and change accordingly in the future?
If your answers are no, it’s time for you to change your legacy systems.
“We’ve faced many cases, where customers give us old legacy systems to support, basically keeping it on life support. In all of the cases, we’ve had hard times to upgrade the system and add new functionality to meet their current business needs. Such systems lack general flexibility – from technical, architectural, infrastructure and scalability point of view. We do our best to optimize such systems, but in the end, we always migrate to a new one. It is simply not sustainable to spend precious time to re-write modules (in the best scenarios) or huge chunks of the system just for basic calculations or reporting scenario or feature. Not to mention the cost of such exercise. ”
Metodi Amov | Marketing Director | ScaleFocus
An example of vendor lock-in and lack of an experienced integration partner is the following case study on behalf of JOIN Experience, a mobile virtual network operator.
9. Inability to meet regulatory compliance
Another aspect of legacy systems that comes at a high cost is compliance. For example, noncompliance with new standards set by the EU’s General Data Protection Regulations in May 2018 can lead to millions in penalties. Meanwhile, the implementation of pseudonymization strongly encouraged by the GDPR is much harder to achieve in legacy IT environments.
The GDPR is specifically targeted at the personal data that many organizations now collect and finding out how that data is important for assigning responsibility under the new regulations. However, recent research from Compuware indicates that 30% of European and US CIOs are unable to guarantee that they can find this data within their systems. Moreover, 53% stressed that the data used in tests, which can include personal data, is particularly difficult to locate.
Legacy systems will come under the same level of inspections as modern solutions in the era of GDPR. They will often include different data sources. From test data to copies of production databases, all that will influence the storage of personal data. With decades of usage and continuous upgrades, these systems have often reached an intimidating level of complexity. It is very difficult to establish which data is in the system and where it is located. Therefore, it is unsurprising that so many CIOs can’t guarantee the location of customer data.
In certain industries, the risks may be even higher. Recent regulatory change that may impact the use of legacy systems is the New York Department of Financial Services Cybersecurity Regulation, 23 NYCRR 500 (DFS Regulation). This regulation demand higher standards for data protection and security, requiring that companies not only understand their systems but, in some cases, proactively redesign those systems if they don’t comply. Many states in the USA, including Delaware, South Dakota, and Colorado, have proposed legislation in response to the Equifax breach that would shorten the timeframe for notifying citizens of data breaches and expand the definition of what constitutes a breach that requires notification. These proposed regulatory changes would require from companies to have a strong knowledge of their systems, the data maintained in those systems, and system access points in order to efficiently determine whether unauthorized access occurred.
10. Bad mobile usability and obsolete underlying technology
Today we are living in a mobile-first world. Mobile devices have become a steady presence in today’s workplace. For many organizations, the benefits of mobile devices mostly pertain to conducting business. They offer workers greater flexibility, enhance workflows and improve communications, helping to make users more efficient and productive, while providing organizations with a competitive edge.
The benefits of mobile devices make it possible for users to work wherever and whenever they need to, while still providing them access to corporate resources. They can take their offices with them, whether traveling, commuting, working in the field or sitting at home.
Contrary, there are mobile apps and mobile devices since 2007. The year, Apple introduced the first modern smartphone to the market. Its capabilities were outstanding for that period. But today, they are outdated and not that fancy. Now, smart devices are rich in features and using the latest technologies available on the market. Applications are constantly updated. Many of them are dead because they didn’t meet the latest UX, UI, security, connectivity, and performance trends. The rest are fundamentally redesigned, to meet all of them and to stay competitive on the market.
No matter how young your systems are if they run on outdated technologies they need to be completely reengineered. I am not talking about programming languages or tools that are considered old. Some of them will outlast most of the new and trendy frameworks.
The real danger lies within the tools that have officially reached their end of life. A great example of such technology is Adobe Flash, which was a very popular web development tool back in time. Today, most browsers do not support Flash or plan to stop, very soon. Moreover, Apple restricted the use of Flash on iOS in 2010 due to concerns that it performed poorly on its mobile devices, had a negative impact on battery life, and was deemed unnecessary for online content.
If your software cannot be accessed from any device other than your office computers, you may already be lagging behind your competition in terms of performance and revenue. If you are not ready for a complete system modernization, it is possible to at least partially introduce your enterprise mobility strategy. Your legacy software can be complemented by mobile tools, which augment some features and provide additional benefits.
11. Hidden operating costs and lost business
Outdated hardware, inefficiency, staff training, or outages are some of the things that make the operating costs of your legacy system high. There are many additional hidden expenditures. Most of them are not stated in any budget, but still very important for your business. For example employee satisfaction, customer loyalty, and your overall brand image.
“You need to consider that over 90% of consumers would rather switch providers than work with a company that uses outdated technology!”
It is almost impossible to calculate the true cost of managing your business processes with legacy software. Why? Because there is something called lost opportunity cost, which usually is involved with most legacy applications.
What does it mean? It means that, if you fail to improve your business systems, every dollar earned by your competitor can be considered a dollar that you lost due to your inability to innovate and modernize your outdated system.
12. Increasingly higher support and maintenance costs
According to Microsoft, it cost a business $780 per year to operate a PC running on Windows XP, but if this business starts using Windows 10 the cost will be $168. So, if you think that you can’t afford to modernize your systems, you would better think again. I am pretty sure that you might be losing more than the cost it takes to revamp your systems.
The cost of legacy system maintenance includes the following operations: updates and changes, staff training, and infrastructure. Moreover this, statistics show that on average enterprises spend from 60% to 85% of their IT budgets to maintain old software infrastructure that fails to meet your business needs.
Moreover, the lack of maintenance can lead to frequent outages and that will cost you a lot! On average, businesses are losing about $366,363 per year for every minute of downtime. Therefore, you need to invest in flawless support and maintenance. If your systems are customer-facing your client’s journey and support should be top priority! Why? Because in most cases, legacy systems typically cause more problems to the end-users. Thus, you need to plan and to invest in 24/7 customer support service and to solve fast unavoidable and costly issues.
Contrary, there are new technologies like Robotic Process Automation (RPA), based on the notion of Artificial Intelligence and Machine Learning. They will allow you to connect your core software solutions and replace mechanical things that your employees do. It is one of the most cost-efficient and effective ways to automate modern office tasks. Why? There is an app for everything today. Hosted in the cloud, integrated via APIs, CRM, ERP, productivity and other apps run today’s enterprises.
Compared to the past, employees today use a larger number of tools. It is not feasible to automate all those tools and their interactions with simple macros. But most large companies still use some systems built with outdated technology. Most of the time these legacy systems do not provide integration to modern tools. Therefore, the solution to these problems is called RPA. Artificial intelligence, software robots, and machine learning are set up to bridge the gaps between systems. Additionally, some business logic involved in business processes is quite simple and bots also automate such reasoning.
13. Changing business practices that revolutionize daily
Today, business models change often and on regular basis. The fact that your legacy application was created many years ago makes it imperative for you to upgrade it that regularly and to avoid any issues. The startup culture, corporate entrepreneurship, and the lean methodology require you to interact fast with the constantly changing business environment. You need to take management decisions and to deliver results as fast as possible to your target audience. If not, very soon you will be out of business.
A well-chosen strategy is an efficient pattern for managing legacy system modernization process. Here are the most popular legacy modernization strategies to consider while planning your technology transformation.
Architecture-Driven Modernization (ADM)
ADM is a process of understanding and evolving existing software assets for Improvements, Modifications, Interoperability, Refactoring, Restructuring, Reusing, Porting, Migration, Translation into another language, Enterprise application integration, and Service-oriented architecture. Modernization starts where existing practices fail to deliver against business objectives. ADM will enable projects with aging software to become more agile.
Visaggio’s Value-based Decision Model (VDM)
VDM is a model developed by Visaggio. It supports the selection of the most suitable software evolution strategy to be applied. It considers bot economical and technical issues. It also is one of the relatively well-validated methods. It is applied when economic returns or quality of a legacy system are lower than expected and helps decide on a better way to revitalize the system.
Reverse Engineering Model
Reverse Engineering Model in case of legacy systems transformation is a process where the legacy applications are transferred to the new environment, but legacy data migration is the last phase of the migration process. To access legacy data, the applications in the new environment use a Reverse Gateway. Reverse Engineering Model is a good choice for high-cost, long projects that may be undermined by the technology pace.
Regardless of the chosen approach and strategy, software modernization is a complex work and risky process. Yet, the results are well worth the risk. To live up to the demands of the new digital transformation economy, companies must stop relying on outdated software and modernize their core technologies. What does it mean? You will benefit only when you stop seeing modernization as a one-time project and embrace it as a cycle.
Regardless of your decision, there is only one correct direction – transforming your legacy systems. Act now! The results are worth taking the risk.
To depend on old school software solutions is like to drive a very old car on a mountain road through the winter with summer tires, without breaks and air conditioning. It’s dangerous and you risk your wellbeing.
You will benefit only when you stop seeing modernization as a one-time project and embrace it as a cycle. Software modernization is an important part of your digital transformation initiative. It requires a solid strategy definition, thorough planning, and a reliable technology partner to help you mitigate the related risks and make the best of this undertaking.
It’s your turn, now. Call us today or use the contact form below and benefit from our assessment framework. We will analyze the state of your software on all levels. From the architecture, the quality of code and the performance of your system to its capacity for future growth.
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