A Deep Dive into Legacy System Integration

Retaining your older systems while embracing digital transformation doesn’t have to be complicated. 

With legacy system integration, you can easily create an interconnected hybrid system that not only increases the value of your core technologies, but also embraces advanced digital services. This includes implementing cutting-edge innovations such as automation,

We’re taking a detailed look at what legacy systems are and how they can hinder enterprises in a digital-first climate. We’ll also explore why the integration of legacy systems with more modern digital services can be a beneficial alternative to total migration. 

What is legacy system integration?

Legacy system integration is the process of connecting older or on-premises systems to newer cloud-based digital technologies.

According to the PWC Pulse Survey, investing in cloud-based enterprise architecture and infrastructure migration are top business priorities for 28% and 35% of CIOs respectively.

However, rather than permanently migrating your data to an entirely new system (a process that can be risky for enterprises), legacy systems integration interconnects older and modern systems to drive digital innovation.

Legacy system integration is often achieved with the help of an API integration platform, which reduces time, complexity, and risk when it comes to managing your systems .

What are the benefits of legacy system integration?

Choosing to merge your legacy systems with modern, digital technologies comes with a wealth of benefits, including: 

• Cost savings: Organizations can avoid the high costs associated with completely replacing legacy systems. 
• Improved efficiency: Legacy system integration can streamline operations by making it easier to access data across departments and applications, with no manual input needed. 
• Better customer experience: Enhance customer service by providing a unified view of customer data across all systems. 
• Compliance and security: Modern integration solutions often come with advanced security features and compliance support, ensuring that legacy systems meet current regulatory requirements and data protection standards.
• Agility and innovation: Integrating legacy systems allows organizations to quickly adapt to changing market conditions and leverage new technologies without abandoning their older systems.

What is legacy technology?

Legacy technology is any IT infrastructure, computing system, or source code that’s old or outdated but still in active use. Typically, these technologies are on-premises and not born in the cloud.

Examples of legacy systems include outdated computing hardware, software applications, and file formats that are no longer available for purchase or have been replaced by a newer technology that isn’t backward-compatible.

Legacy technology can also refer to applications, systems, and technologies that are no longer being maintained, supported, or updated by developers or manufacturers.

However, not all legacy systems are obsolete. In fact, many form the foundation of an enterprise’s infrastructure and are  critical to daily operations. But despite being functional and in active use, these systems fail to meet modern business requirements and can negatively impact long-term sustainability.

 Legacy system examples

Common Business-Oriented Language (COBOL)

COBOL is a programming language that was created in the 1950s, primarily for mainframe computers. It’s still the driving force behind many government and financial institution systems, with approximately 775-850 billion lines of code in daily use.

Despite COBOL's ability to provide a stable development environment – as well as its capability for integration – a fundamental issue is its lack of resources.

New programmers have strayed from the cold war-era language to embrace modern languages born from digital transformation, like Java and .NET. As a result, finding skilled COBOL experts to maintain these systems has become difficult.

Oracle E-business Suite and Peoplesoft

Even though Oracle continues to provide support to those using its legacy Oracle E-business Suite and Peoplesoft products, there’s no denying that these ERPs are nearing the end of their lives.

Oracle E-business Suite was created in 2001, while Peoplesoft was created in 1987 and acquired by Oracle in 2005. Many of these products’ original users have since moved to cloud-based ERP and CRM products, however plenty continue to utilize them for data storage and extraction.

But, like other legacy technologies, failing to integrate with modern systems puts enterprises at risk of mounting costs, wasted resources, and hindered modernization.

Virtual Storage Access Method (VSAM)

VSAM is a file storage access method created by IBM in the 1970s. It enabled businesses to organize data as files in different sequences on the IBM mainframe.

Utilizing legacy system integration to make VSAM work outside of the mainframe is possible, but there are considerable limitations that only grow more problematic as time goes on. Dwindling talent, as well as the scarcity and high price of resources, has made maintaining and developing VSAM files more challenging as we transition to modern alternatives.

Why are legacy systems still used?

Capitalizing on digital transformation initiatives is “very important” to 60% of businesses according to PWC. And a lot of these initiatives revolve around modernizing enterprise architecture and technologies.

But why do some enterprises resist modernizing their legacy systems?

 Legacy systems are still functional

“If it’s not broken, why fix it?”  This mantra is used in the defense of many legacy systems - and it’s not entirely wrong.

Legacy systems offer the kind of durability and reliability that comes with decades of testing and development. And for a lot of enterprises, their legacy systems are still functioning well enough to support global operations.

Platforms like OpenLegacy are designed to maximize the value of legacy systems through smart integration. So, rather than being forced to replace reliable core systems, enterprises can create hybrid integrations, connecting these systems to digital services. 

Consequently, they can improve operational efficiency and meet customer demands without the risks incurred by total migration.

Costs 

To upgrade or replace legacy systems, businesses need access to up-front resources. While the costs generated by long-term legacy system maintenance are high, businesses might not have the immediate funds required for replacement.

In other instances, upgrading or replacing legacy systems just isn't worth the downtime, productivity loss, and cost of hiring/upskilling employees.

Challenges and complexity

Legacy systems can become homegrown labyrinths. Attempting to modernize them is a complex, intensive task with a significant risk of data loss, service delays, and long periods of downtime—especially if the target is foundational to daily operations. Such issues reduce operational efficiency, create poor customer experiences, and can lead to lost revenue.

Another challenge presented by modernization is unfamiliarity. Employees are often comfortable using the legacy system and struggle to adapt to modernized technology, which can result in further disruption.

All in all, the challenges and financial implications associated with modernization can sometimes outweigh the benefits.

Challenges of legacy systems

Despite all of the above, legacy systems can pose a significant risk to security, scalability, sustainability, and even your long-term expenses.

Data breach risks and security threats

As the threat landscape continues to evolve, business systems need to be equipped with the most advanced and up-to-date security features. Because legacy systems don’t receive tests or updates from developers, they possess inherent security vulnerabilities that make them easy targets for cybercriminals.

For example, legacy systems are often incompatible with critical access-based security features, such as OTPs, role-based access, and multi-factor authentication. They can also lack sufficient encryption, audit trials, etc.

When all it takes is one unpatched vulnerability for a cybercriminal to access your business’s network, applications, databases, and middleware, legacy systems can significantly increase your risk of a cyber attack or breach.

A data breach currently costs organizations an average of $4.35 million, according to IBM’s most recent figures. 

Legacy systems pose other security-related risks too, such as legacy dependencies, exposure, and lack of visibility.

No integration with contemporary systems

Many legacy systems are incompatible with contemporary apps and software. This is a huge hindrance in the digital age, where integrations are relied upon to meet both business and customer needs.

Data silos are an example of how a lack of integration can hurt a business. Siloed data harms the efficiency of your internal operations and ultimately prevents you from providing the fast, convenient customer service buyers demand.

For your competitors in the know, this isn’t the case. By utilizing integrations, they can innovate, improve operational efficiency, and create customer experiences that align with expectations.

Uncontrollable IT costs

One of the main reasons enterprises avoid legacy modernization is the cost.  While it’s true that the price of updating and replacing legacy systems is high, the long-term costs of maintaining them can get expensive.

That’s not including the financial implications caused by increased security risks or competitive advantage either.

Without developer updates, legacy systems require constant on-call attention and continuous maintenance from IT teams. This limits your ability to work on other projects that offer more value to your business operations.

And, with legacy systems being so prone to crashes, the threat of downtime costs just as much in productivity as the unpredictable cost of downtime itself.

Technical debt

Technical debt refers to the predicted reworking costs incurred when businesses take the easier solution instead of the more complex (but ultimately better) one. In the context of legacy systems, technical debt is the interest that mounts the longer a business uses short-term fixes to keep its outdated technology ticking.

Sure, in the short term, it’s more convenient to stick with the status quo. Your IT team is familiar with your current technology, and legacy system integration will cause disruption.

However, as your legacy system becomes ever less agile, scalable, and integrative, digital transformation is inevitable. The more technical debt you stack up, the more of an obstacle your legacy system becomes to any digital initiative you attempt.

Dropping below compliance

Regulatory bodies are continuously updating their standards for compliance in alignment with the evolving security landscape. Legacy systems can fail to meet the standards of data compliance regulations like GDPR, HIPPA, and PCI.

Alongside the data breaches and reputational loss that can occur with non-compliance, businesses that fail to meet the standards of these regulations can incur hefty fines.

As IBM’s recent data shows, the average cost of a data breach is significantly greater for businesses with high levels of non-compliance.

 Choose OpenLegacy for your legacy system integration

Legacy modernization can be a fear-inducing concept for enterprises that depend on their monolithic core systems—but if you prioritize integration instead of migration, you can reduce many of the costs and complexities associated with digital transformation.

With the help of our cloud-native hybrid integration software, you can connect even the most dated and complex legacy systems to digital services. OpenLegacy’s core-to-cloud approach facilitates direct integration between your on-premise systems and the target cloud environment.

And, with automated templating, low-code/no-code options, as well as the ability to rapidly detangle webs of data coming in from legacy systems, we can rapidly accelerate the time-to-market of your digital innovations.

FAQs on legacy systems integration

What challenges do legacy systems pose for enterprise system integration?

Because enterprise systems are intricately homegrown, monolithic, and core to daily operations, integrating legacy systems with them can be challenging. Despite this, resisting integration can present even more issues in the long term.

Enterprise legacy systems hold volumes upon volumes of historical data, but without integration, it’s impossible to derive value from this via AI-powered analytics, machine learning models, etc. As a result, enterprises lack actionable insights and are unable to make strategic decisions.

Legacy systems also hinder enterprise sustainability. With competitors flocking in droves toward digital innovation, businesses that fail to do this risk being left behind by customers seeking digital-first solutions. They may even be upstaged by smaller, cloud-native competitors.

How do legacy systems interact with modern systems?

Interaction between legacy systems and modern systems can be achieved through a variety of methods. A few of the most popular include:

• Application programming interface (API). Put simply, an API acts as an intermediary between two systems. It defines the rules of how those applications should interact with each other, enabling data transmission through standardization.
• Point-to-point (P2P) integration. Typically used to create a small-scale integrated system, P2P connects two applications using custom code.
• Enterprise service bus (ESB). ESB is a centralized software architecture between your legacy and modern systems. It essentially translates messages between different systems, delivering these using a communication bus.

What are the four types of system integration?

These are the four main types of system integration:

• Legacy system integration. This involves connecting legacy systems to modern applications, often using APIs. For example, a business might integrate its legacy CRM system with a cloud-based unified communications platform.
• Enterprise application integration. Enterprise application integrations unify internal subsystems within a business. For example, it could unify its internal payment processing, automated billing, and accounting tools into an all-in-one platform to increase efficiency.
• Third-party system integration. The goal of this integration method is to equip an application with new or upgraded functionality via integration with existing technology. Uber, for example, uses third-party system integration via APIs to add Google Maps, Twilio, and Braintree functionalities to its app.
• Business-to-business integration (B2B). B2B integration automates business processes, such as transactions or file-sharing, between two or more company platforms to improve collaboration and trading. The most popular application of this is when a supplier connects their ERP platform to a partner retailer’s purchasing system.