For small businesses and nonprofit organizations on tight budgets, the thought of modernizing or replacing some of their operating systems is intimidating, but the actual costs of maintaining legacy systems are significant. In this article, we will explain why it makes sense to install modern technology as opposed to maintaining outdated equipment and applications.
What Is a Legacy System?
A legacy system is an outdated computer system, software application, hardware, or any technology infrastructure that a company still uses. The system, application, or device still performs the tasks it was originally designed for, but it is generally less efficient than modern technology and doesn’t allow for growth.
Some examples of legacy systems include Microsoft Windows 7, XP, and Vista, Adobe Flash, Lotus Notes, and HCL Domino applications, which no longer receive updates or developer support. Many organizations also used outdated versions of Oracle, SAP, and SharePoint. IBM’s mainframe systems and COBOL are also common legacy systems that a surprising number of companies still use.
How Widespread Is the Legacy System Problem?
Experts note that close to $3 trillion in daily business is still running through COBOL systems, some of which are more than 60 years old. Almost three quarters of engineering and manufacturing companies rely on legacy systems in their operations. In 2019 the US General Accounting Office (GAO) identified 10 critical federal IT legacy systems that were most in need of modernization. These vital systems ranged from 8 to 51 years old and collectively cost $337 million annually to operate and maintain.
Research also indicates that many small businesses use 75% of their entire IT budgets just to maintain their legacy systems. In addition, in a recent survey of company leaders, 70% of respondents stated that their technical debt hinders their ability to innovate.
Negative Impact of Legacy Systems
The negative impact of legacy systems is summarized below.
Legacy programs:
- Consume a substantial portion of total IT budget for maintenance, leaving little for new applications and innovation.
- Have integration issues with innovative technologies, especially cloud services.
- Limit scalability of operations.
- Are not efficient as performance can be slow and clunky, and these systems have more downtime. Employees spend more time trying to do their jobs with worse results, lowering overall productivity.
- Cause increased cybersecurity risks. Legacy systems are harder to protect against advanced cybersecurity threats. Outdated technology often will not support encryption standards or multi-factor authentication.
- Don’t have vendor support, which makes it difficult to find replacement parts or get security updates or patches. Outdated hardware components will become scarcer and more expensive in the future.
- Require specialized staff or customized training and make it more difficult to recruit talented resources, which increases HR costs.
- Decrease employee morale, which impacts performance and employee retention.
- Make formulating IT budgets and roadmaps more difficult because of the uncertainty of the cost and performance of the outdated technology.
- Reduce ability to adapt and compete against innovative and agile competitors.
- Bring about decreased customer satisfaction and lower revenue. Unhappy clients will look for better results with more technologically advanced competitors.
As a result of the many negative effects of legacy systems outlined above, it makes sense for your company to modernize or replace your legacy systems. The improvement in productivity, employee morale, and customer satisfaction will pay real dividends for your organization.
Even though the cost and effort needed to bring about system modernization and data migration can be significant in the short run, the long-term benefits of eliminating these negative factors are far superior to staying the course.
Consult with a Trusted IT Support Expert for Assistance with Technology Modernization
For assistance in taking the critical steps toward technology modernization at your company, we recommend you work closely with a trusted IT Support expert, such as Network Depot. Your IT partner will take the time to assess your current technology state and develop a comprehensive modernization strategy that will work best for your unique organization.
Your dependable IT Support partner will have the experience and expertise to advise you on updating your legacy systems or completely replacing them as necessary. Your IT partner’s knowledge of cloud services, cybersecurity, software applications, hardware, and all aspects of network infrastructure will make this complex process run as smoothly as possible.
With a skilled IT Support partner at your side throughout the process of technology modernization and beyond, your organization will be able to conduct your operations more effectively and achieve your goals.