Is It Time to Update Your Legacy Systems?

By: Daniel Newman| - Leave a comment

Because today’s consumers are more demanding and have higher expectations than ever before, businesses of all sizes must deliver a high-quality, seamless customer experience if they hope to stay competitive. It can be a cumbersome task, though, especially because of the way technology is constantly (and sometimes immediately) changing. That’s why it’s so important for companies to tend to their legacy systems.

Legacy systems are commonly characterized as information systems that, despite being based on antiquated technologies, are still critical to day-to-day business operations. As essential as these systems are, their outdated terminology and methods cause undue confusion and hamper business. Nonetheless, it’s rare for a company to replace these systems. In addition to it being extremely cost prohibitive, factors like data that can’t be converted to a new format or programs incompatible with new technology prevent companies from making the switch to a completely new system.

Rather than entirely replace old with new, many companies opt to modernizing their legacy systems. Modernization is the best of both worlds, offering several benefits to both business and consumer. Gartner describes modernizing legacy systems as an effort to “retain and extend the value of the legacy investment through migration to new platforms.” Re-hosting, consolidating, and integrating can make the most of a company’s current system, saving money and time. Here’s why modernizing is worth the investment.

Reduce Support and Maintenance Costs

Keeping a legacy system on life support incurs exceptional costs. A large percentage of a company’s IT budget—up to 80 percent according to some estimates—is spent on keeping these old systems afloat, when it could be used for new projects and purchases. Because these systems were initially created and customized for now obsolete needs, taking inventory of what still works and what doesn’t allows companies to identify which processes are no longer relevant. Only applications deemed critical to business are then modernized; the others are simply retired, saving time and money on maintenance. As technology becomes archaic, so do the skillsets that used to create and maintain them, making it very costly to find someone well-versed in the outdated applications. Many businesses have no choice but to outsource IT support for their legacy systems, paying top dollar for qualified personnel.

Current technology means current designers and programmers familiar with the systems, so whenever support is necessary, it’s more easily accessible and less costly. Another note about current technology is that it is built to resist hackers, with security taking precedence. The outdated software in a legacy system is a sitting duck for hackers because the longer a piece of software is around, the more time and opportunity for security breaches. Modernizing legacy systems allows companies to improve functionality and save money on day-to-day operations and technical support and maintenance.

Meet User Expectations and Demands

If two businesses offer the same product, what encourages customers to choose one over the other? The answer is customer experience. When a company updates its legacy system, it is no longer inhibited by technological constraints, which allows it to focus more on delivering value to customers. In hosting applications on the cloud, businesses meet consumer demands more quickly and reliably. Integration, consolidation, and mobile readiness mean a more seamless experience for users.

Use New Technology and Improve Performance

Modernizing finds both opportunities and drawbacks within existing technology. Rather than start from scratch, modernization offers companies the option to use what they already have and create something new. Identifying redundancies in applications improves performance, and automation streamlines business and IT solutions, which means less manual labor and less lag time. When potential bottlenecks and other inefficiencies are discovered, this gives businesses the chance to address the issues that are likely hampering productivity. This results in an increase in productivity and a decrease in waste.

Enhance Application Usability

When businesses can focus only on applications that are critical to daily operations, it allows them to finely hone usability. Modern systems have become exceptionally intuitive, focusing on user interface and usability. The improvements in hardware and networking mean virtual and cloud computing, big data processing tools, and increased mobility. Once modernized, systems can provide easier access to popular functions, eliminate road bumps in workflow, improve responsiveness, and better plan for and deal with errors.

Provide Stakeholders with Higher Reliability and Scalability

When done correctly, incrementally and clearly communicating with all stakeholders, modernizing a legacy system provides almost immediate returns. Cloud-based software offers scalability and portability, two factors key in keeping systems current. Enough money is saved in the initial step of modernization to fund the latter parts of the process, meaning that the long term return of investment improves user experience and positively impacts business. There is more time to “focus on further objectives, to boost sales, increase your profits, and of course, engage your customers.” As was previously mentioned, an updated system is built securely from the ground up, minimizing risks and defending against hackers. A more reliable system is designed to protect data while still allowing users to access it.

While enterprise is leading the way for modernizing legacy applications, government entities should follow suit. A recent study shows “92 percent of Federal Government IT managers think that security breaches, performance issues, service disruptions and threats to mission-critical capabilities are inevitable if legacy applications aren’t modernized in a timely manner.” Companies understand these immediate threats to mean the possible demise of their business, which is why almost 50 percent of CIOs rank modernizing their legacy systems as one of their top five priorities. It is costly and time-consuming to stay relevant in a constantly evolving IT world, but it’s more expensive and laborious not to. Updating applications begets numerous benefits, making the old system useful once again.

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About The Author

Daniel Newman

Founder and President, Broadsuite, Inc.

After 12 years of running technology companies including a CEO appointment at the age of 28, I traded the corner office for a chance to drive the discussion on how the digital economy is going to forever change the way business is done. I'm an MBA, adjunct business professor and 4x author of best-selling business books including "The Millennial CEO" and "The New Rules of Customer Engagement." Pianist, soccer fan, husband and father, not in that order. Oh and for work...I'm the co-founder of V3B [Broadsuite], a marketing firm specializing in the digital space, helping companies be found, seen and heard in a cluttered digital world.

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