Rewriting a legacy mission-critical application, especially one that has been in service for over a decade, is undeniably one of the most challenging decisions a CIO or CTO can face. These systems often possess the capacity to handle current workloads and meet today’s business needs, leading to the question: why embark on a rewrite?
The answer lies in the relentless march of technology. Over time, as the application ages, it becomes increasingly challenging to adapt it to accommodate the latest business requirements and emerging technologies. The original architecture simply wasn’t designed with these innovations in mind.
As organizations expand and evolve, they often find themselves burdened by a collection of outdated technology systems and software solutions that once served as the backbone of their operations. While these legacy systems may have been cutting-edge in their heyday, they gradually lose efficiency as technology progresses. Businesses that persist in relying on these aging systems do so at their own peril.
If your technology infrastructure relies on a legacy system, especially one that’s surpassed the decade mark, the smartest move for both your current operations and long-term budget is an upgrade. Through a redesign, you gain the opportunity to rectify past shortcomings, accommodate new business requirements, and harness the latest technologies and integrations.
Undoubtedly, redesigns come with inherent risks, which is why many CIOs are inclined to steer clear of them. However, those who summon the courage to undertake a well-thought-out upgrade often reap substantial rewards, including a reduced Total Cost of Ownership (TCO) and heightened system agility.
A survey of Chief Experience Officers of global companies conducted by Tata Consultancy and AWS found that over two-thirds of the respondents are using mainframe or legacy applications for core business operations and over 60 percent for customer-facing functions. The good news is, more than 70 percent of respondents consider mainframe or legacy modernization a strategic business priority for the next three years.
Here, we will discuss the hidden downsides of legacy technology systems and the negative impact they have on your company if they are left unmanaged.
Hidden Labor Costs
Legacy systems are often more challenging to maintain, require specialized skills, and typically, extended support contracts which adds to the overall cost.
Deloitte reports, “The simultaneous ascent of millennials and retirement of baby boomers can create unforeseen workforce-management challenges, particularly for organizations that use legacy applications for core business functions.” Further, IDC reports that 57% of organizations are dealing with the retirement of developers with mainframe skills and have difficulty recruiting new mainframe talent. For those developers who are still around and willing to work, they can command exorbitant fees since their services are clearly in demand.
If your technology system is more than 10 years old, the rewards for upgrading will far exceed any costs of doing so. The Total Cost of Ownership of your system compounds over time, making it more complex to optimize inefficient code and processes the longer they are in production. The system will have to be rewritten at some point and the longer you wait the harder it becomes to find qualified people who know how to run it.
Poor Customer Experience and Security
Legacy systems limit the scalability and flexibility of businesses to adapt to changing market conditions. The inability to modernize the technology to meet new requirements causes businesses to miss out on new opportunities and may even lead to losing customers who aren’t able to perform certain functions or integrate with the latest technology.
Another limitation of legacy systems is that they lack updated security protocols, leaving the system vulnerable to cyberattacks and customer data exposed. The upgrades and patches that vendors issue to keep their malware up-to-date will not apply to legacy systems over time, as they only tend to update the most recent versions of their software. In addition, these security breaches and cyber-attacks could result in additional costs that businesses may not have budgeted for.
Integration Limitations
Most legacy systems were developed at a time when integration was not a crucial factor in the technology landscape. As a result, these systems have limitations on how they can integrate with modern applications, which can be a significant problem for companies looking to modernize their operations. This limitation can also slow down product delivery times and cause operational inefficiencies.
With the rise of new technologies such as cloud-based systems and IoT, many legacy technology systems are struggling to keep up. These outdated systems are often unable to integrate with newer technologies, which can cause problems in overall system compatibility.
Consistent Upgrades and Patches
When legacy systems finally reach the end of their life cycle, companies often face the daunting task of upgrading them. This process can be lengthy and time-consuming, disrupting daily business operations. Sometimes the effort required to upgrade is greater than anticipated resulting in an unpredictable timeline and ending up more expensive than projected.
Plus, employees with specialized knowledge of legacy technology systems become few and far between. Finding people to support and patch your legacy systems will become an issue if you lose current employees who leave to get trained in modern systems and then find better higher-paying jobs that reward their skills.
Competitive Disadvantage
Legacy technology systems that are no longer supported, not scalable, or too expensive to maintain are a significant threat to a business’s ability to compete. Legacy systems can limit technological innovation and scalability, and may not have the flexibility to integrate with modern applications, reducing your competitive edge.
Decision-makers must make an informed choice on the balancing act between continued usage of legacy systems versus the benefits of modernizing to cutting-edge technology. A responsible decision requires a strategic evaluation of hidden costs, risks, and competitiveness.
The process of modernizing can be daunting, but delaying your system’s upgrade can have severe long-term consequences. By replacing outdated legacy technology systems with new and innovative solutions, organizations can increase efficiency, improve the user experience, integrate with other new technologies, improve security, and gain cost-effectiveness by streamlining their business operations and ensuring labor will be on hand to maintain the system going forward.
The most successful companies we’ve seen at my company, Fortified, are the ones that take the risk to update and invest in core legacy applications. For others, delaying the decision only compounds the risk and costs over time.