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In this article, we supply a legacy system definition and look at various system types as well as examples. We also outline best practices for data modernization.


Legacy Systems: Definition, Types, Examples and Best Practices

Posted by Angela Davis on July 31, 2023
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If technology is an integral part of your business, you’ve probably come across the term ‘legacy system’ before. However, without a clear legacy system definition, it’s easy to be confused by it. 

Should you do everything you can to avoid legacy systems? What counts as one? How do you deal with them, and do you need to upgrade yours? 

With technology continually evolving, it’s likely you’ll need to replace or modernize certain outdated processes in your enterprise in the near future. Read on to gain a thorough understanding of legacy systems and the best practices for keeping your digital technology up to date.

What is a legacy system?

A legacy system is any piece of technology (including both software and hardware) that lacks modern features that would be available if you were to update that piece of tech. 

This doesn’t mean the system isn’t functional—rather, legacy technology often continues to function as it was originally intended, meaning companies may see little upside in updating it. 

Think of the browser you’re reading this article on. If it lets you access the internet, would you spend money updating it even if doing so provided you with some new features?

Businesses use the same logic when it comes to legacy systems, especially as they’re often difficult to replace. However, using a legacy system comes with some downsides. You might not have access to ongoing support and maintenance due to the age of the technology, and it may gradually lose compatibility with modern formats for the same reason. This might result in you lacking access to new features used by your competitors. 

It’s also important to consider the cost of maintaining a legacy system. As these technologies become obsolete over time, businesses can find themselves spending large portions of their IT budget on in-house maintenance. These issues can affect productivity too.

This means that although it might seem easier to carry on using legacy systems, they can leave your enterprise stuck in the past, failing to keep up with the cutting-edge standards of today’s modern business world.

Despite the benefits, updating legacy systems can be as difficult a task as any other form of digital transformation. As these systems usually form a central part of your business operations, any modernization needs to be well-planned and carefully executed to be successful. 

Four types of legacy systems

There are different forms that legacy systems can take. Here are the four main types.

1. End of life (EOL)

An EOL system is one that’s no longer supported by the vendor. These are usually pieces of software that the supplier has improved on, so the original is removed from sale by the developer. 

EOL systems don’t receive any updates, leaving them exposed to cybersecurity issues. They’re often incompatible with other pieces of software or hardware as well.

An example of an EOL system is Windows XP, as an older version of Windows it is now seriously outdated. 

2. Extensive software patchingMost software products have a life cycle of five years

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Like any technology, software has a limited lifecycle. While lifecycle length can be extended with software patches, systems that are heavily patched can suffer from cybersecurity vulnerabilities. 

When software becomes increasingly reliant on patches to run, the chances of a poor-quality patch multiply. This means that, where possible, you should always move on from software that’s extensively patched. 

3. Outdated system knowledge

Think of technology as a language. If people stop speaking a language, it will soon die out. The same is true of legacy systems. As software or hardware becomes outdated, the number of people who are able to effectively work with the technology diminishes.

This means you may end up with only a handful of people in your company who are able to develop the software that’s integral to your organization, leaving you with little choice but to update it.

4. Limited scalability

A piece of technology can also be considered a legacy system if it no longer meets the needs of a business. Even if the software continues to be updated and widely used by other companies, if your specific needs outgrow it, then it will cause the same problems as other legacy systems. Company’s can outgrow systems if their datasets increase or they expand into a new domain. Software needs to scale with you, or it will become obsolete. 

If legacy systems are based on physical, on-prem servers, they may also have limited scalability. This is because of the cost of new hardware and the space needed to run it. With inflexible scalability, it can be difficult to meet changing customer or market needs.

Legacy system examples

Now you know the main types of legacy systems, here are two common examples.

Legacy financial systems

Fintech is one of the fastest-growing areas of technological innovation, and customers increasingly expect to use mobile apps to perform most banking functions. This rapid rate of change has left many financial services companies relying on outdated software. 

With modern technology able to vastly improve customer experience, and heavy regulation within the financial services industry requiring the most up-to-date cybersecurity protection, the downsides of a legacy banking system are clear. 

Legacy databases

While legacy financial systems are specific to financial companies, legacy databases can be found across almost every industry. They may refer to data that is stored with outdated software or on an older, monolithic server. 

Data is incredibly important, so using a legacy database creates significant challenges for a company. Maintaining an outdated database often seen for systems that run on mainframe and midrange on-premise systems can be expensive, and it also risks leaving your data inaccessible if it can’t be integrated with newer technology. 

Despite this, many companies shy away from performing a large-scale data migration due to how expensive and stressful the task can be.

Best data modernization practices

A data modernization strategy

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It’s understandable that legacy systems are a problem for most companies. While keeping outdated technology might seem easier temporarily, you’ll soon find that the issues posed by scalability, compatibility, and cybersecurity mean it’s best to modernize. 

Here are our best practices for legacy system transformation

Migrate data systems to the cloud

More and more digital services are becoming centered around the cloud. Rather than being stored on a physical server, which risks becoming outdated and can’t be easily scaled up, data is kept in the cloud instead. 

You probably already use the cloud, through applications such as Google Drive, either in your personal or business life. However, when you use it to store your enterprise’s data, you may choose a private cloud platform, which will allow you to optimize settings and costs according to your business needs. 

Migrating your data to the cloud brings a range of benefits. Firstly, it means your data can be accessed from anywhere, increasing the flexibility and agility of your company. It can also be easily scaled up without having to worry about investing in new physical storage or memory. Finally, it removes the risk of physical cybersecurity vulnerabilities. 

When choosing a cloud provider to store your data, look for a service that can replicate the functions of your legacy system while offering sufficient scalability. Make sure you find a provider with appropriate levels of cybersecurity protection for your industry as well.

Implement a new platform

If you need to replace a monolithic application that’s specifically set up to suit your company’s requirements, you might have to implement a new platform. If you’ve developed your own applications, this can be done internally, although there are also external providers that offer replatforming services.

When implementing a new platform, evaluate which aspects of your legacy system should be maintained as well as which need updating. Take note of any other applications and systems that work with your legacy system so you can ensure their compatibility is future-proofed.

Replatforming will often rely on cloud computing technologies, with newly designed applications running in the cloud. This is a great way to ensure that the integration of your systems and data is supported across your whole enterprise. 

Enhance existing codes

One of the ways to deal with legacy systems without having to replatform your operations is by adapting your existing code. This means reprogramming the coding that operates your legacy systems to implement new features or improve compatibility with modern formats.

This will allow you to enhance your legacy software while maintaining its current level of functionality, offering a less disruptive legacy system integration. Streamlining your code will also make your applications easier to maintain.

However, this solution only works in specific circumstances and can’t be applied to third-party software. Furthermore, rewriting existing code can be a time-consuming activity and requires an experienced development team. 

Legacy system modernization techniques

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Restore the application

Regardless of how you update your legacy systems, you must remember to back up your data so that you’re able to fully restore the application to its original functionality once the legacy system transformation is complete. 

Some third-party applications offer restoration automatically, but you should remember to build this into your code if you’re developing a system in-house.

If you’re implementing an entirely new platform, it might be worth restoring specific parts of your legacy code that don’t need replacing. This will allow you to maintain certain continuities between the legacy and the new system while saving your developers time and money. 

Drive growth and innovation—upgrade your legacy system with the best modernization practices

Businesses across the world are becoming more and more reliant on constantly evolving technology, so it’s important that you know about legacy systems and the dangers they can create. The definition of a legacy system is a piece of technology that’s outdated but remains functional in your enterprise. 

While it’s difficult to completely replace legacy systems, you risk losing compatibility and your competitive edge, as well as becoming vulnerable to cybersecurity threats, if you stick with outdated technologies. This is especially hazardous in highly regulated industries, such as finance. 

When modernizing, key best practices include leveraging cloud technology to store your data and reformulating existing code to enhance your legacy systems. Applying these practices in your enterprise will set you on the road to a successful legacy system upgrade. 

How OpenLegacy can help you modernize your legacy systems

OpenLegacy offers hybrid integration services to bridge the gap between legacy systems and contemporary cloud-native applications. By matching application architecture and natively connecting to core systems, OpenLegacy enables seamless and swift data exchange that unlocks the potential of business’ existing infrastructure. 

Hybrid integration also provides businesses with the option of a phased or incremental approach to modernization. Instead of undertaking a costly and high-risk system overhaul, legacy system functionalities can be migrated to modern platforms gradually. The simultaneous running of both legacy and modern systems  minimizes downtime, reduces the risks associated with system failures, and allows organizations to leverage new technologies while preserving their valuable legacy infrastructure investments.

Schedule a demo to find out how OpenLegacy Hub could benefit your business.


FAQs about legacy system definitions

Are legacy systems reliable?

Legacy systems are usually still used by companies because of how reliable they are—although a lack of updates or issues with maintenance means they can quickly become obsolete when things go wrong.

Is Windows a legacy system?

Operating systems that no longer receive updates or developer support, such as Windows 7, Windows XP, and Windows Vista, count as legacy systems.

Why is it necessary to update your legacy system?

Legacy systems should be updated to ensure that you can integrate new applications, access quicker and more reliable technology, and scale up. Doing so will also help you remain compliant with cybersecurity regulations. 

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