Legacy Systems & Technology: Should You Maintain or Modernize?
The life-turning events of 2020 showed the crucial importance of IT modernization & business transformation. Businesses that had already implemented modernization & transformation could make fast adjustments by counting on the cloud architecture, following updated security protocols, and using various business-enabling tools and technologies to support their new business environment.
Digital transformation fundamentally changes an organization’s functions, whereas IT modernization mainly focuses on operational and infrastructure improvements such as system upgrades or new technologies. By modernizing legacy systems & processes and adopting efficient workflows, businesses can boost employee productivity, strengthen security, and increase profitability by higher cost savings.
However, this was not the case for all; SMEs, nonprofits, and government establishments lagging in adopting digital initiatives had a more challenging time adjusting to the fast-evolving economic and social environment.
One of the most prominent roadblocks to truly achieving business transformation is the decades of legacy technology-based systems still used to run significant business operations.
Maintain Legacy Systems or Modernize?
So now the question arises whether one should maintain the existing legacy system or strengthen the business operations and productivity through modernization and digital transformation.
Our clients often ask us if they should migrate their legacy systems to newer systems and technologies? The answer is not so straightforward, before deciding their next course of action, evaluate your business needs to see if there is a need to migrate legacy to cloud-based services. Poor system performance and high maintenance costs being top reasons.
We advise our clients to evaluate their business needs and the roadblocks they face before proposing a solution; we ask questions like-
- Are you unsatisfied with the current system’s performance?
- Are you concerned that the current system might leave your business vulnerable to cyber security issues?
By asking such questions, we drill down to find the exact areas of struggle and problems.
Often business owners do not have all the answers so are rightfully conflicted about replacing legacy systems with newer and better alternatives; some have plans but have little or no idea about how to implement the strategies.
According to a 2019 study by the US Government Accountability Office (GAO), after analyzing 65 federal legacy systems, they identified the 10 most critical systems in agencies ranging from Defense to Treasury. Out of these 10 agencies, 3 had no documented plans to modernize, and only 2 agencies had plans that included all the essential practices. The study reinstates the thought that most companies taking on transformative initiatives do not have an accurate understanding of the concept, approaches to executing it, and pitfalls to watch out for.
Although the pandemic exposed the frailties of legacy systems, the dilemma between maintaining or modernizing the legacy systems is still widespread. Most of the time, re-designing the business’s digital landscape would mean reinventing the entire business lifecycle from customer acquisition, operations, post-sales, and customer service. And this can rightly seem like a mammoth expensive task.
Legacy Systems: What are they?
A legacy system refers to an old method, technology, or application program that is still reliable and responsible for day-to-day business operations. Legacy systems are generally housed in monolithic and couple environments and run-on hardware and software owned, hosted, managed, and supported by customers. The term ‘Legacy’ also suggests that the system defined the way for future standards, implying that the system in use is out of date and in need of replacement, or upgrade.
For example, Legacy code is old source code. And this could either mean that the company’s existing code base has been written over the years or that it is outdated, or it is working with something ancient.
Legacy code is also more prone to software rot when continuous changes to the runtime environment or the surrounding environment (hardware & software) need maintenance. Although legacy code refers to source code, it also applies to executable code that does not work on a newer system and requires a compatibility layer to run. Let’s clarify this more, although a Macintosh application will not run natively on macOS, it will still run inside its classic environment or on a Win16 application on Windows XP that uses the Windows on Windows feature in XP.
Due to its historical role, a legacy system may affect the organization in several ways. Historical data of the company may not have been exported to the new format of the system and may only exist in the old version of the data warehouse. In such cases, legacy systems’ effect on business intelligence, operational processes & reporting is significant. Simply because a legacy system may rely on procedures or terminology that are no longer relevant, and this may obstruct the understanding of the technologies used.
Advantages of Legacy Systems
Despite many complexities attached to using legacy systems, businesses also have pressing reasons for keeping a legacy system.
They work well and are efficient for a specific task
“If it isn’t broken, don’t fix it or replace it” this adage stands true in the case of many legacy systems. For instance, banking systems and mainframes that facilitate customer transactions efficiently carry out day-to-day operations. Even though these systems are old and outdated, they still work perfectly. Moreover, since these systems were designed for maximum capacity, they are more reliable and durable.
Switching from legacy to new systems is time-consuming and difficult
The way we store and retrieve data has changed over the years; legacy systems may have algorithms that are now uncommon. Switching to entirely new technology is a resource-intensive task since the data must be converted into a different format and stored in cloud computing systems.
Moreover, whenever a company acquires and uses new software, it’s necessary to retrain all the employees and consider all related risks.
Legacy systems are authorized for vital, mission-critical usage
Sometimes the software crucial for a company, client, or customer is certified to comply with a mandated standard. In other cases, if the software product impacts the safety, validating it is a must. The cost and time of validating and recertifying a new system are often too high.
Swapping the tool will disrupt the organization’s productivity
Another high cost of replacing a legacy system is the downtime while transitioning to the newer system. There can be a significant loss of employee productivity until the new software is deployed and all the employees are retrained.
However, training the employees on the new system will be costly both in terms of time and money as compared to the future benefits of replacing the system.
Undesirable performance of a new system
One of the critical reasons for migrating to a new system is the expectation of a higher monetary value when replacing something old with something new. But sometimes, the performance of newer systems doesn’t meet the expectations of the users. And functions like tracking and reporting user activity or automatic updates may expose ‘back-door’ security vulnerabilities. There is also a massive dependency on the vendor to provide timely updates, and the problem becomes more pronounced when the user cannot disable such secondary functions of the new systems.
Other reasons are that training the employees on the new system will be costly in terms of time and money compared to the future benefits of replacing legacy systems. Sometimes it’s not clear how the system works. Either the designers of the system have left the company, or there is little or no documentation available to implement the required changes.
Disadvantages of Legacy Systems
With so many advantages of using Legacy systems, one wonders if these systems pose high potential risks. The answer is not so straightforward. Although legacy technologies are efficient for specific tasks, they can affect business continuity, security, and reliability of systems.
Functionality, compatibility & connectivity issues
Integrating new technology with a substantially older one is not common. Integration with more recent systems will be complex as the latest software technology is entirely different.
Even though legacy systems may support specific data files and formats at the beginning. But with time, these standards have also evolved beyond what the legacy system can support.
Legacy systems are rigid and inflexible, they do not interact with the current systems and are difficult to navigate. This makes it difficult to incorporate them with newer technologies like, AI,ML, IoT or SaaS. Legacy systems are also unable to interact with new technologies.
Limited or no flexibility
There is a general lack of understanding of legacy systems, which makes it difficult to maintain, expand and improve them. It is also challenging to change and customize them. Legacy experts have long retired or are not in tune with what they knew. Lack of proper system documentation makes the situation worse. In comparison, modern systems are more flexible and easier to update and integrate with other technologies.
More security vulnerabilities
Legacy systems are prone to malware attacks as there are no software patches and upgrades that strengthen the security. There are several reasons for increased security risk in legacy systems,
- Often the legacy system is unable to get support from the vendor.
- Legacy IT strategy doesn’t follow the lean IT theory.
- Production configurations can also cause security issues.
Old Interface effects the user experience
IT modernization and digital transformation are all about customer experience. Most businesses aim to provide an excellent customer experience and consistently look for ways to enhance their experience. In today’s mobile era, more than 90% of people are using smartphones; poor customer experience directly impacts business revenue.
Businesses still using an old legacy system hurt themselves by not keeping up with the changing customer trends. The outdated interface of the legacy system is not suitable for today’s business needs. As the displays can be hard to read and data difficult to interpret.
Problems of data silos and costly maintenance
One of the notable disadvantages of the legacy System is ‘Data silos’. These systems do not support integration. Data is stuck in one system and hard to integrate. Data migration is too complex as the mainframes often need to be updated. Legacy systems are costly to maintain as most need the expertise of skilled technicians, which is in limited supply.
So, should you modernize legacy software?
The challenges associated with legacy systems and technology are tough to ignore. To sum up:
- Outdated technology and best practices
- Incomplete/outdated/inaccurate, or no documentation
- The skill sets required for older technologies are not easily available.
- The systems are often unreliable mainly due to multiple development approaches and different developers.
Companies also risk defaulting on service level agreements (SLAs) with legacy systems operating on outdated technologies. Legacy IT systems also weaken the company’s security. Resulting in a domino effect of security and compliance vulnerabilities where one problem leads to another.
Our Observations
The most important question that business owners and leaders ask, how to keep the growth momentum going? How to ensure that their business practices are relevant today?
Simply going faster is not the right approach. Leading companies invest in tech, data, processes and people, they harness technologies to upgrade the core of their business.
Don’t miss the bus like NOKIA!
During the press conference to announce NOKIA’s acquisition by Microsoft, Nokia CEO Stephen Elop ended his speech saying, “We didn’t do anything wrong, but somehow, we lost.”
He acknowledged that Nokia missed out on learning, changing, and keeping pace with the evolving customer needs and requirements and eventually their survival. Nokia failed to see beyond the established rules of competitive dynamics. They realized too late that the focus had shifted to software and applications. Their risk-aversive and closed organizational culture failed to respond to new innovations.
Final Thoughts
It’s essential for business leaders and CEOs to make an informed decision. Before you rip out code as if you are weeding an overgrown garden, step back and assess the state of your business, its people, and processes. The aim should be to align people, processes, and technology initiatives to match the business strategy, vision, and mission.
Understanding the contribution legacy software makes, if you decide to replace it, is essential. And when you do go ahead to replace legacy technology and systems, ensure that the new solution delivers the same and more advantages as the old one.
We would love to hear from you. OpenEyes has great depth and experience in helping organizations assess and realize the current state of their IT operations. Let’s connect for a discussion.