Recently updated on August 8th, 2022

Moore’s Law was an observation that the number of transistors in an integrated circuit doubles about every two years. What Gordon Moore, ex-CEO of Intel, was trying to say was that we, as a society, were at the beginning of a technological explosion unlike anything we had ever seen.

For the past 50 years, Moore’s law has mostly held up. Technology is constantly evolving. New technology is pushed through the market and old technology is pushed out. Gone are the days of Blue Ray disks, flip phones and CD players. If you are still using these technologies, you are likely paying more than you need to in order to use them compared to newer technology. Legacy business applications and software are no different.

Legacy systems are like an antique car. They may continue to run, but are very fragile and expensive to keep in top quality condition.

What Are Legacy Systems?

In computing, a legacy system is defined as an outdated technology, computer system or application program. These are systems that once had value, but have been replaced with newer, more secure and efficient technology.

The age of the system does not matter in this case. The only thing that makes your system outdated is the fact that there is an updated version or a newer technology that supersedes the value of your current system.

Legacy systems are like an antique car. They may continue to run, but are very fragile and expensive to keep in top quality condition.

Typewriter and computer

Higher Maintenance Cost

As technology changes, ongoing maintenance costs can be quite high. In fact, recent reports from Gartner and the American Council for Technology identify that between 60%-90% of IT budgets for a variety of industries including our own government are spent towards maintenance alone.

Many legacy system may depend on external applications or software to work optimally. Providers can choose to cease supporting these tools at their convenience leaving you scrambling to replace it. Finding compatible hardware for repairs can be increasingly hard to find and costly. Your support provider may decide to raise rates. All of these inconveniences and costs can pile up over time, leaving your business stuck.

Remember, if there are more advanced systems on the market, your IT vendors and partners need to shift to the newer, more adopted technology in order to stay competitive. Continuing to support the outdated technology raises costs for them which, in turn, raises costs for you.

Security Cost

There is an attack by a cybercriminal every 39 seconds. The inflexibility of a legacy system can often make your business much more prone to cyber-attacks. As new viruses and hacking techniques change, security definitions and fixes will have to be updated. It is a much lower priority for security software companies to update fixes for legacy systems.Depending on how outdated your system is, it could turn out to be the biggest danger to your company if it can’t be updated to optimize its security.

Higher Labor Cost

Many legacy systems require outdated and specialized skill sets. As your older programmers and employees retire, so does your institutional knowledge of the inner workings of the system. Your business may find itself keeping an ineffective employee simply because they are one of the few left who can fix the system. Your business also may have to search longer or even pay more for the expertise on the open market. Depending on this specialized knowledge creates a bottleneck that can hinder your organization over time.

Instability Cost

Your business technology is always under a significant threat of security breaches and failures.
Older systems are more complex and fragile leaving your business open to long work stoppages during repairs. Every minute your business applications are down, you are losing customers, revenue and productivity. System downtime throws a wrench into your entire operation, leaving you constantly playing catch up to your competitors.

Opportunity Cost

While legacy systems can continue to perform vital functions within your organization, it is sometimes the cost of meeting consumer demand that is the most overlooked aspect when choosing whether or not to modernize your system.

Kodak owned the photographic film market for most of the 20th century, but refused to adopt to modern digital technology due to its fear of compromising their old revenue model. They no longer are the dominant player they once were. In a free market, consumers are always going to be in charge and refusing to understand that can be devastating for your business.

Legacy systems application diagram

Should I Modernize My Legacy System?

Technology will continue to evolve. Older technology will continue to increase your IT costs and decrease business agility. While your legacy system may be working for you now, newer, more effective technologies will be helping your competitors gain market share.

New technologies can improve your time to market, enhance customer experiences, streamline business processes among other opportunities. If you are interested in upgrading your business critical legacy systems, contact Next Horizon to explore what that might look like.

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Next Horizon provides holistic technology solutions for businesses looking to improve sales, increase agility and optimize productivity. From deploying dedicated development teams to building bespoke business applications, Next Horizon uses its 40+ years of experience and award-winning talent to provide technical business solutions for its clients.

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