Are Legacy Applications Holding You Back?

By: Core BTS | August 23, 2022

Choosing the best time to modernize an old system can be hard. It’s like knowing that it’s time to trade in your old, dented, yet intrepid Chevy for a new, faster, safer, and more fuel-efficient Ford…but you and that old Chevy have been through so much, you feel like you can’t let it go. The truth is, the Chevy may be dependable, but that old car is mostly just holding you back.

It’s exactly the same with legacy system modernization.

Believe it or not, the pace of new technologies isn’t slowing down. Apps are constantly updating, hardware is forever shrinking, and entire IT infrastructure systems are undergoing digital transformation. Leading companies are not only rearchitecting their business processes to meet ever-changing business needs and implementing technology solutions to enable those improved processes, they’re also studying and incorporating modernization approaches that best fit their business needs.

In the end, we know that old Chevy of a system is hard to give up. But here’s why the slower, less secure, and limited functionality of legacy systems is putting a ceiling on your growth — and how best to begin your own modernization project.

What Is A Legacy Application?

Let’s start with the basics. According to Gartner, a “legacy application” is “an information system that may be based on outdated technologies, but is critical to day-to-day operations.” These old applications can be a few years to decades old. What defines them is both their age and their difficulty in being replaced with new software and/or hardware. Healthcare, financial services, and manufacturing are some industries that most frequently put up with a legacy application architecture.

How Do I Know If I Have A Legacy Application or System?

You can recognize when your own existing system has gone from “old” to “legacy” in several ways:

  1. Its age. As we mentioned previously, existing code and systems could be considered “legacy” whether they are 5 or 20 years old. It all depends on your company and competition.
  2. It requires frequent maintenance. If you notice your maintenance costs and operating costs increasing while productivity and output has flatlined, that may be a sign to replace your existing system. Or worse, your current application is constantly crashing and slowing work down — that could be a clear sign that your system is out-of-date.
  3. Its technology isn’t taught anymore. Another consideration is that it is hard to find talent that still knows how to manage the system. True legacy systems are often built on platforms or languages that aren’t even taught in educational institutions anymore, making it expensive to find resources to manage them.
  4. It doesn’t do what you need it to do. Systems and apps built on legacy code are often very slow, inefficient, and have limited capabilities compared to new applications and modern counterparts. (And they often lack data integrity.) If you find yourself thinking that the list of things your current system can’t do is growing long, you may well be working with a legacy system.

Why Companies Put Up With Their Legacy Systems

You may be asking, “If legacy applications have such negative repercussions, why don’t companies just update them?” That’s because of that crucial part of the definition of a legacy application: they are “critical to day-to-day operations,” and thus can be quite difficult and expensive to replace.

Of course, there are other reasons why some companies stick with their legacy systems for so long. For one, it’s familiar. Despite disruptions to workflows and other issues, everyone knows how it works. Sometimes a full breakdown is the only way to move an organization to change (not advisable). 

Another issue can be what’s called the “sunk cost fallacy”. In our world of defining change and getting sponsors to approve spending money, the idea of “We’ve already spent so much time and money on it” is a hurdle that many organizations have to overcome to even think of modernization. We often have conversations with business leaders to help them realize that money spent is gone and does not belong in conversations about the future.

Legacy applications can also be efficient, having been originally installed to perform specific tasks; but in today’s fast-paced market, most companies need a new platform that can perform the old tasks just as efficiently while offering new features that give teams flexibility and scalability.

Last, but not least: cost. The cost of undergoing legacy software modernization is indeed significant; but, in our experience, it is ultimately necessary (as you will see below).

The Dangerous Reality of Legacy Applications

The truth is, legacy applications are not just old machines; their vulnerability, inflexibility, and slow performance have serious ramifications for your business.

First, consider the cost. Legacy systems can end up costing hundreds of thousands, if not millions (or hundreds of millions if you’re the government) of dollars per year to continue operating; and that’s not counting the opportunity cost of the money your business could have made if you were using a more agile and flexible up-to-date platform instead. Maintenance costs for your aging technology will occupy increasingly large portions of the IT budget over time (even up to 75%). Though modernization is not a low-cost investment, doing so can cut operating costs, improve efficiencies, and help your organization compete.

Yet, cost isn’t the only factor. Old systems built on outdated codebase are obviously rife with vulnerabilities through which outside actors can penetrate, steal proprietary data and information, and hold it ransom (and/or sell it on the dark web). Similarly, compliance is also a clear risk with modern standards and regulations incurring steep penalties and fines for companies that fail to comply (which many companies stuck with legacy applications are forced to pay). Equifax, the perpetual example of both security and compliance failure due to its overreliance on legacy systems, paid $575 million in a settlement with the FTC for its data breach. Don’t let your legacy applications turn you into the next Equifax.

Finally, legacy applications and systems can put a ceiling on your business value. Aging, inflexible infrastructure simply cannot keep up with the demands of the modern economy, no matter what business you’re in, and it has a negative impact on the bottom line. Team morale can also suffer from the constant upkeep of an old system as your coworkers and employees feel hamstrung by the tech they’re supposed to be able to rely on.

Not only do legacy applications cost a business progressively steeper upkeep fees, but they limit a company’s growth prospects as well. All that should be considered when weighing the price of potential modernization efforts.

What New Technologies Offer

There’s a reason CIOs agree that a good modernization strategy and system redesign are worth the investment. Here are several reasons to consider: 

  • Replatforming delivers better user experience and customer experience. Beyond your primary stakeholders, all of your users and customers will appreciate a sleeker, faster, and more streamlined technical experience through application modernization. By thoughtfully employing DevOps through this process, you can speed time to market (by streamlining testing and release processes) and decrease operating costs and reduce total cost of ownership (through automation).
  • Modernization boosts productivity and output. Studies show that new applications can improve workplace productivity by up to 40%. Both increased system speed and overall system uptime are common benefits of updating core technology, giving your team a concrete foundation for their work.
  • The opportunity to optimize infrastructure and erase technical debt. “Technical debt” can occur when code is written with expediency prioritized over quality, ultimately reducing the overall efficacy of an application, stemming from a compromised codebase. But bringing in an updated system provides software development teams the chance to erase those debts and start fresh, building a high-quality and highly-effective new system from the ground up.
  • Better security and compliance. Cybersecurity firms frequently encourage their clients to update their legacy systems to eliminate obvious security risks. Modern architecture(s)  can help seal the gaps in your cyber-defenses and eliminate noncompliant system architecture that may be costing you thousands of dollars.
  • Lower future costs. As it turns out, maintenance and operating costs plunge when your systems stay online and perform as expected. And, if you follow a sound modernization methodology that minimizes the aforementioned technical debts, it will keep performing to a high standard for at least as long as your old system.
  • Improved processes. Often, just redesigning the technical systems doesn’t go far enough. It’s important to think of this as a solution redesign, and any effective holistic solution should always address your people, processes, data, and technology. Without the people part of legacy modernization, new technology becomes an expensive paperweight that your people will naturally work around.

Modernizing your legacy applications can bring your business many benefits, save money, and open the way for greater growth — but only if you go about it the right way.

How You Can Modernize Legacy Systems (Without Disrupting Your Workflows)

The best approach to a modernization process begins with recognizing the issue. Which systems, applications, and code are outdated and are showing signs of aging in your infrastructure? Identifying which applications need a complete overhaul and which only need refactoring is the first step.

Next, businesses that want to build a roadmap to successful modernization should absolutely consult experts — this is not an initiative you want to under-budget or leave to unsupported teams. 

Modernization is more than building and implementing new technologies. You also need a partner who understands the importance of people and process to drive that. Core BTS’ agile and experienced team will help you quickly update your legacy systems to modern applications so you can quickly respond to market demands with increased efficiency and enhanced productivity — regardless of your industry. We have the technical and consulting resources that are critical for long term success, sustainability, and extensibility of any technology element you implement. 

If you’re looking at your old system and thinking it’s looking a lot like an old Chevy, it’s probably time to give us a call. Don’t wait until it’s too late to retire your legacy system; contact us today to start building your company’s modernization strategy and take you into the exciting next phase of your business.

Core BTS is a digital transformation consultancy that helps organizations simplify technical complexity, accelerate transformation, and drive business outcomes.

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