If you’re hanging onto legacy systems, chances are you’re doing your business a great disservice. Notoriously inflexible, legacy systems are a major obstacle for growth. They prevent your business from being competitive, agile and able to meet customer expectations. And that’s just for starters.
While you might be persevering with these systems because they were custom-built for your business, you’re concerned about disrupting business as usual or losing your data or are wary of the cost and time involved in migrating to new systems. When done properly, updating, upgrading or replacing your legacy systems can be the best thing you can do for your business.
Here are just five of the major ways legacy systems are preventing your business growth:
1. Your productivity levels are diminished
Legacy technology is outdated, inefficient and overly complicated. Often, the software has been custom-built for a specific purpose, but the original developers are no longer updating it, which means it becomes sluggish. With manual processes, a lack of interoperability and counterintuitive interfaces that are difficult and slow to use, your staff are wasting significant amounts of time. Instead of working on tasks that are integral to their jobs or advancing your business goals, they’re spending hours completing administrative tasks that should have taken minutes. They might be jumping from system to system, leading to substantial impacts on their productivity and ability to react in a timely manner. By migrating to new technology systems, you’ll improve the way your business operates and free up thousands of hours for your staff to focus on critical tasks.
2. You’re facing expensive or non-existent support
The older legacy technology becomes, the more problems emerge. This means increased maintenance costs as things need constant repair, you experience countless glitches and even the simplest updates become expensive and time consuming. Vendors know that you’re increasingly reliant on them as your legacy systems age and your internal knowledge diminishes, which means they may start charging you more. Soon enough, vendor support will decrease and may even stop altogether.
3. You’re not making the most of your data
Data is your business’s most valuable asset. By using legacy systems to store it, you’re most likely storing it inefficiently. This prohibits your ability to access this data quickly and easily, while also increasing your risk of storing it inaccurately. Additionally, you may be storing your data in multiple systems which don’t communicate with each other, which means you are entering and accessing the same data multiple times. As a result:
- You cannot extract valuable insights that give you a big picture overview and allow your team to make well-informed decisions
- It takes a long time to collect analytics and produce important reports
- You don’t have access to real-time analytics and dashboards
- End of year reporting is much more stressful and time-consuming
4. You can’t keep up with competitors or market changes
Today’s business world is constantly moving and being disrupted in every industry. Customer expectations continue to evolve and we’re seeing new markets as well as innovative solutions emerge all the time. If you’re using systems that cannot adapt to these rapid changes, you are inhibiting your growth and expansion and will almost certainly be left behind by your competitors. You’ll also be unable to leverage new markets or market gaps that give your business the opportunity to reach new heights.
5. You’re wasting significant amounts of money.
It’s estimated that businesses in the UK and US are losing $140 billion annually thanks to legacy systems. A recent report found that the South Australian government alone spends $20 million every year on vendors to support legacy systems. When you weigh up everything, it’s easy to see that you too will be spending unnecessary amounts of money or wasting earning opportunities. These costs may be obvious – such as costly ongoing support – or hidden such as duplication of effort, wasted time or broader opportunities you cannot see or take advantage of. Furthermore, with systems that are difficult to change and incompatible with newer and necessary features and applications, your project risks increase and are likely to result in time and cost overruns.
Other effects of legacy systems:
- Increased downtime – legacy systems face greater risk of downtime even from simple tasks such as updating software or installing new hardware. And, since legacy systems don’t perform live backups, you’re at risk of permanently losing information during these downtimes
- Non-compliance – legacy systems generally aren’t compliant with new regulatory requirements
- Reliance on legacy skillsets – legacy systems require internal knowledge which makes you dependent on the staff who know how they work, causing unnecessary problems and stress if these people were to resign or retire
- Vulnerability to cyberattacks – legacy systems are known to be vulnerable to cyberattacks as they are often obsolete and not supported by patches which provide protection against hackers, malware and data breaches
Overcoming issues associated with legacy technology can be easier than you think. With the right systems, you can integrate legacy technology into your digital transformation strategy. While the investment upfront may seem like a lot, it won’t be long before your business starts reaping the rewards.