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Why Are Legacy Systems Still Used in Some Businesses?

Posted by Angela Davis on August 17, 2023

A legacy system is a piece of software or hardware that has been in use for a long time. Despite being increasingly out of date and cumbersome to maintain, legacy systems will still be functional. 

As they’re often built using older technologies, many are prone to security vulnerabilities. Legacy systems can also be extremely hard to integrate with modern software, which typically makes it difficult to migrate them to newer platforms. 

So, why are legacy systems still used by a large number of businesses?

Legacy system trends.

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Exploring the reasons why legacy products are still being used

In this article we explore the main reasons why legacy products are still being used by some businesses. 

Digital transformation can be an expensive investment

While every software and hardware infrastructure has maintenance costs attached, the price of updating and modernizing aging software and hardware can be prohibitively expensive for some companies. 

Legacy software needs are often quite specialized, and as a consequence, older systems are more expensive to update than the cloud-based applications that are commonly used today.

One of the main reasons for this is simply obsolescence. As software or hardware ages and new products come onto the market, the number of experts who know how to handle older systems diminishes. 

This scarcity means that specialists are not only difficult to find but can also charge more to provide support or modernization for these systems. 

That said, it can also be costly to continue running legacy systems without any updates. The amount of time certain services can spend offline may result in a dip in sales or customer churn due to dissatisfaction with the service provided. This means older systems often end up being less profitable.  

Your team may not be equipped with the essential IT legacy skills for a migration

If you don't have the talent in-house to migrate your legacy tech to a modern, cloud-based system, you might decide it’s not worth doing at all. Especially if your company is quite small and has a limited budget for IT, the prospect of spending a sizeable sum can seem daunting. This is even more true if the system remains functional and is able to meet your basic needs. 

Hiring an external IT specialist isn’t cheap, and even if it makes sense for your company to modernize in the long term, you might struggle to find the funds to make it happen without borrowing. 

Given the fast-paced and constantly changing environment that modern businesses operate in, this can feel like a big risk to take. There can be concerns that it will only be a matter of time before the next new innovation would also make a new system outdated.

 

The rise of legacy systems.

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Data migration can be challenging

As well as being potentially expensive, migrating data and legacy assets can take a lot of time. While your systems are being migrated, they’re likely to be temporarily unavailable to your customers or clients, which means a disruption to normal services. 

Furthermore, if you fail to properly migrate all your data, you could end up losing months or years of vital customer information, affecting your ability to provide appropriate customer support and services. 

In other words, data migration comes with some substantial risks.

Your workforce may be resistant to the change

You might find your team is sticking with an old system out of habit, inertia, or because hiring an IT specialist is deemed too expensive. If everyone is comfortable using the system, however old, they might be resistant to fixing something that isn’t perceived as broken, especially if the modernization causes notable upheaval.

Additionally, it may be difficult for some colleagues to understand the benefits of changing to a new system if they have a unique perspective of how the company functions. Looking at the day-to-day operations of a business is very different from taking in a broader view of the system. 

A third, external party can offer a different perspective, but can also create feelings of an outsider telling people how to do their jobs. Depending on the personalities in your workforce, this could go down poorly. 

That said, some colleagues may be pleased to be rid of an old and tired system. It’s helpful to prepare for a variety of reactions and include everyone in the development of your new processes. As a rule, the best way to deal with those who resist is to listen to their concerns and help them be part of the solution. 

You might not be able to afford the downtime

If your business runs 24/7 or you have customers around the world, there may not be a good time to go offline without losing customers. 

While it used to be the case that companies didn’t have to be available all the time, the internet and global competition mean the modern commercial world is very different. 

Therefore, some companies simply don’t want the disruption and fallout from any downtime required to update or modernize their legacy systems.  

Eight maintenance issues for legacy systems

Legacy system modernization statistics.

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1. Data silos

One challenge when it comes to maintaining an outdated system is data silos. Data silos occur when data is stored in a separate system or database instead of being integrated with other systems. This can make it difficult for businesses to access the information they need to make the best and most up-to-date decisions. 

Data silos can lead to inefficiencies and inaccuracies, which impact business success. Outdated systems may also not be able to integrate with more modern software in your tech stack, which can cause further silos to develop. 

2. High maintenance costs 

Maintaining an obsolete system can be a costly endeavor. These systems need specialized expertise and equipment for their upkeep, resulting in elevated maintenance expenses that deplete valuable resources and impede the attainment of business objectives.

Moreover, procuring professionals to handle outdated systems can pose challenges due to their scarcity and the financial implications of hiring specialists.

3. Challenges in compatibility

Outmoded systems frequently exhibit a lack of compatibility with contemporary software, impeding seamless integration with other systems and curbing functionality. 

The presence of compatibility issues can also precipitate inefficiencies and inaccuracies. Furthermore, having to procure software that aligns with an outdated system poses challenges and limits the range of options accessible to your business.

4. Less operational speed and productivity

Outmoded systems frequently fail to meet the demands of contemporary businesses, resulting in diminished operational speeds and reduced productivity in comparison to rivals. For example, these systems frequently suffer from inadequate processing power or memory, which impedes their ability to effectively handle modern business requirements.

In addition, employees may find their productivity limited if they are devoting excessive amounts of time to navigating obsolete systems. This can cause frustration, reduce motivation, and undermine enthusiasm for work.

5. Breaches of security

Types of security breach.

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A major danger with outdated systems is a lack of necessary security features. Without protection against modern threats, your business will be vulnerable to security hacks. The systems may also have well-known vulnerabilities that can be exploited by hackers due to having been around for a long time.

On top of this, outdated systems don’t always receive security updates, which leaves them at risk of being compromised.

6. Lack of scalability

Unlike cloud-based software solutions, an outdated system might not be able to scale up or down to meet the needs of changing businesses. This can result in a lack of flexibility that hinders growth in comparison to the capabilities granted by cloud modernization

Limits on processing power and memory can further hinder the number of users or transactions that can be processed by these systems. Adding fresh functionalities or integrating new systems can also be a hassle with an outdated system, which will limit the options available to your business. 

7. Selective compliance

Since they were created in a different time, legacy systems were not designed with modern compliance requirements in mind.

As these older systems often aren’t compliant with modern regulations and standards, businesses can be left in legal limbo or, worse, end up facing legal and financial consequences. 

8. Limited mobility

Finally, legacy systems are often unable to support mobile devices. This limits the ability of employees to work remotely, reducing flexibility, adaptability, and, ultimately, productivity. The ability to work from anywhere has become increasingly crucial for businesses with the rise of remote working.  

Strategies for modernizing your IT legacy

There are two major strategies for modernizing IT legacy systems, revolutionary modernization and evolutionary modernization, which we’ll delve into below. 

Revolutionary modernization

Modernizing infrastructure through revolutionary techniques requires existing systems to undergo a total overhaul and transformation. 

This approach is particularly valuable to companies that have acquired or merged with companies that have different technology stacks. Synchronizing different systems becomes crucial for business success, and adopting a new system is often the best option. 

Revolutionary modernization may also become a necessity if a legacy system poses a burden to operational efficiency—primarily when it lacks support from vendors, third-party application providers, or external software solutions.

Evolutionary modernization  

Evolutionary modernization is a less disruptive approach to upgrading legacy systems, as it involves multiple phases and long-term execution. This gradual approach minimizes business disruption and allows the costs to be spread over an extended period, but it requires careful planning. 

Organizations that have long-standing contracts with vendors and can’t pivot quickly might find this approach more suitable for their business. 

 

Enterprises that opt for evolutionary modernization often consider hybrid solutions, which allow for migration to the cloud while legacy systems are still used.

Optimize legacy modernization outcomes with OpenLegacy

66% of C-level executives would like to replace all their core legacy systems.

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As a specialist in legacy system integration, OpenLegacy can help businesses successfully implement their legacy modernization strategy swiftly, simply, and securely. 

OpenLegacy for revolutionary modernization

OpenLegacy provides users with a no/low/full code platform that can standardize and reuse the design and management of services to reduce the risks of replacing, rewriting, or decommissioning legacy systems.

OpenLegacy for evolutionary modernization

OpenLegacy’s hybrid integration allows businesses to create a bridge between cloud and legacy systems. By parsing the metadata of legacy applications in COBOL, RPG, XML, and more, OpenLegacy can automatically generate microservice-based APIs and increase the speed of integration.

By choosing hybrid cloud integration, organizations can increase their scalability and flexibility while guarding against future obsolescence.

Monoprix’s successful modernization with OpenLegacy

The batch and legacy processes used by Monoprix for online catalog updates were slow and sluggish, taking a whole day to add new items and multiple days to solve issues. This prevented the company from quickly introducing new fashion lines and reduced its competitive advantage.

OpenLegacy helped Monoprix convert their batch processes to CICS transactions, which allowed transactions and data from the mainframe to be exposed as APIs. Monoprix’s legacy system was connected with multiple integration points, allowing green screens, DB access, and batch processes to be managed within the same API, which is a unique capability of the OpenLegacy solution.

By exposing mainframe CICS transactions as APIs without adding additional technical layers, OpenLegacy provided the fast and flexible solution that Monoprix required to modernize.

 


 

FAQs about why legacy systems are still used

What are the major characteristics of a legacy system?

A legacy system describes a software or technology system that’s been in use for a long time and is still being used, despite being outdated and difficult to maintain. 

The major characteristics of a legacy system include its age, complexity, and lack of interoperability with modern systems. These systems are typically built using outdated technologies and programming languages. They also often lack documentation, making it difficult to understand their architecture. 

Legacy systems are vulnerable to security threats, as they may not be able to keep up with modern advancements. 

Finally, legacy systems may be dependent on specific hardware or software configurations, making it difficult to migrate them to modern platforms.

Are legacy systems secure?

Legacy systems are generally considered to be less secure than modern systems due to their outdated technology and reduced ongoing maintenance. They are often vulnerable to new and evolving threats as they lack modern security features. They may not receive regular security updates either, which can leave them open to known vulnerabilities. 

However, it’s possible to secure legacy systems through maintenance, patching, and monitoring, as well as additional security measures, such as firewalls and intrusion detection systems. 

That said, legacy system transformation is usually the best option when it comes to security and flexibility.

Why are legacy systems expensive?

Legacy systems are considered expensive for several reasons. Maintaining and updating them can be costly due to the scarcity of experts with knowledge of older technologies. 

Legacy systems may also have a high cost of ownership due to licensing fees, hardware and software maintenance, and ongoing support. Additionally, integrating legacy systems with newer technologies or platforms can be complex, time-consuming, and costly.

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