Legacy systems are often the biggest roadblocks to digital transformation
In today's rapidly evolving digital world where companies like Amazon disrupt more and more sectors, organizations must have the nimbleness and flexibility to push innovation and respond to change. Many don't. According to Gartner, 47% of CEOs say their boards press them to make progress on digital, but only 17% of organizations describe their digital initiatives in the scale or harvest stage. Why is digital transformation so hard? Often, it's legacy systems that present the biggest roadblocks. Gartner defines a legacy application as "an information system that may be based on outdated technologies, but is critical to day-to-day operations." In the financial sector alone, recent research shows lenders lose $407 million a year to outdated technology.
What Makes Legacy Systems So Costly?
Getting off legacy systems that are integral to the organization can seem like too big a challenge to take on, but the costs of not doing it are impossible to ignore.
1. Lost business opportunities
Companies looking to leverage new technology often quickly realize a third-party API won't work with outdated systems that form the backbone of internal information technology structures. For example, organizations know that big data is everything, but even if they already have large quantities that could potentially yield new business opportunities, they can't use it because it's held in legacy systems. They must find ways to extract it, and turn it into a form that is usable with newer data-parsing technologies before they can be integrated. Such inflexibility stifles the innovation key to survival and success in today's business climate. You're in trouble if your competitor can bring capabilities and user experiences to the market you can't.
Time and time again, outdated software, networks, and devices have proven to be the hole that hackers use to get through otherwise good defenses. The 2018 State of Cyber Resilience shows that legacy infrastructure is often less resistant to cyberattacks and malware for several reasons. Not only has it been around long enough for bad actors to learn its vulnerabilities, but it's also often no longer supported by the vendor that made it – so no security patches or compliance updates are being installed. With the average cost of a data breach currently sitting at $3.8 million, the price tag for not replacing a legacy system can be devastating.
The longer you hold on to legacy systems, the higher the maintenance costs grow. That can be simply because aging devices breakdown more often, but systems based on unsupported or outdated software also require specific knowledge and expertise that gets harder and harder to procure. If new IT employees have to be trained to work on old systems, or vendors must be paid for custom work, your costs will continue to balloon.
Changes in compliance rules in heavily-regulated sectors like medical, financial, or law can also bring expensive legacy system headaches when the needed requirements aren't easily achieved – or can't be – with old technology.
4. Productivity, collaboration, and mobility
Even if you're able to stay the course with your legacy systems, how are you improving? True digital transformation isn't just going out and buying some new piece of software; it's about a culture shift in the entire organization to be nimbler, more inventive, and forward leaning. Legacy systems often prevent the adoption of tools that drive greater productivity, collaboration, and mobility. For example, does your network allow documents and projects to be accessed from the cloud so that teams can work on them simultaneously or access them anywhere and any time they want as Microsoft's OneDrive does? Can you support device choice for workers who prefer Apple? Capabilities of those types are how you improve productivity, collaboration, and mobility while attracting and retaining the best and brightest workforce.
Why Do Organizations Hold On to Legacy Systems?
We've cataloged some of the many reasons legacy systems hold you back, so why not just ditch them? There are lots of good reasons organizations hang on to old technology. For one thing, the more integral it is to operations, the more costly and disruptive it can be to change. Overstretched IT teams are often so busy with day-to-day operations that they can't take on major deployments of new technology. Or they simply may lack the expertise.
Find Your Path Out of the Maze
As overwhelming as legacy system problems may seem, the best strategy is to raise yourself to a 30,000 foot view and examine the issue holistically. To begin with, digital transformation initiatives should first and foremost be aligned with business goals. Taking that attitude will help you analyze systems critically and prioritize which should be addressed first and what percentage of your budget they deserve.
New systems must be evaluated for the flexibility and modernization potential you know you're going to need down the road. After all, today's "new" system is tomorrow's legacy system. You need to think about what that will look like, and if there are ways to avoid some of the same pitfalls and silos you have now.
If your IT team doesn't have the bandwidth or expertise to take on digital transformation projects, this may be a good time to take on a trusted partner to help show you the way and/or do the deployment work for you.
CompuCom's digital consulting services include Design Thinking, where instead of inventing something first and then trying to sell it to the end user, we flip the process and listen to the user's needs first – then set out to find solutions. The strategy has proven to deliver ideas and products that are far more likely to succeed.