How Legacy Systems Can Hinder Long-Term Business Growth

How Legacy Systems Can Hinder Long-Term Business Growth

According to Userlane (2020), a shocking statistic revealed that 75% of information technology (IT) budgets for insurance companies and banks worldwide focused on maintaining existing legacy systems. These legacy systems severely impact the performance and productivity of businesses worldwide and generate a knock-on effect on staff. 

Over half (51.95%) of employees working in companies that employ legacy systems display significant dissatisfaction with their working environment due to the outdated software tools at their disposal (Technopedia, 2014).

 Besides hindering business productivity due to unhappy staff, legacy systems could even impact long-term customer satisfaction and loyalty concerning customer communications management (CCM). 

Modern CCM systems let businesses harness technology to boost customer service and engagement, generating a pleasant customer experience and ultimately fostering long-term loyalty. Despite this, many companies still use outdated CCM systems to their detriment and negatively impact any opportunities for business growth. 

In light of the rapid rate of technological advancement, businesses that wish to succeed and achieve longevity cannot retain a stubborn approach to adopting new technologies. By doing so, they risk becoming obsolete by continuing to use their legacy systems.

What Are Legacy Systems

Talend (2022) defines a legacy system as any computing software or equipment that no longer functions efficiently or receives support from its corresponding vendor. Legacy systems in the business refer to outdated computer systems, programs, software applications and accompanying technologies that are in use rather than the latest modern alternatives to achieve optimum business productivity. 

Legacy systems continue to perform the essential functions and address the necessary business needs, albeit at a basic level. Due to their outdated functionality, legacy systems fail to integrate effectively with newer and upgraded technologies. 

Imaginovation (2020) states that a system becomes a legacy system if it meets the following criteria:

  • You cannot integrate it with new systems or processes.
  • You cannot update or upgrade it. 
  • It is more expensive to maintain it than it costs to procure the latest available version.
  • Its performance is considerably slower than the latest available version. 
  • You have used the system for over a decade.
  • Vendors offer little to no IT support for the system.
  • The necessary skills required for system support are no longer available on the market. 
  • A newer version of the same system is available on the market.

What Is the Difference Between Legacy Software and Legacy Systems?

Entrance Consulting (2022) states that legacy software specifically refers to aged software that still fulfils a vital business function; Legacy systems extend beyond software to include hardware and the combination of both as a legacy system. Companies consider legacy software mission-critical due to its dependency on an outdated operating system version or hardware model (vendor lock-in). 

Typically hardware lifespans are considerably shorter than software versions which companies can upgrade provided their hardware retains the processing power to run the updated versions. Over time the hardware becomes significantly more expensive and difficult to maintain or replace. Companies refer to this outdated hardware as legacy hardware, running dated applications using older operating systems with limited processing power. Some examples of legacy hardware include obsolete network equipment, mainframe computers and older personal computers.

Why Do Businesses Continue to Use Legacy Systems

Why do businesses continue to use legacy systems despite their inefficiencies? A 2019 report released by the U.S. General Accountability Office stated that many industries worldwide still rely on legacy systems and that there are ten essential legacy systems that require modernisation. The simple reality is that replacing legacy systems is a daunting endeavour that requires significant resources, time and money.

Many businesses have conflicting views on why they continue to use legacy systems even though far more efficient options are available on the market. However, the consensus comes down to two primary reasons: many systems still perform designated business functions and replacing legacy systems presents fear of the unknown.

When to Replace Your Legacy System

According to TechTarget (2021), the business requirements necessitate replacing a legacy system; if the technology fails to meet the needs of the business and its strategic objectives, it is time for a replacement. Maintaining older tech in such cases will become significantly outpaced by the exponential value generated from replacing your legacy system.

Why Successful Data Migration is Key to Updating Legacy Systems

If you want to replace your legacy system with newer technology, certain pitfalls can occur through carelessness. The most vital part of updating and replacing a legacy system is protecting the already existing data; you can only achieve this through successful data migration.

Successful data migration includes:

Extracting Existing Data

Data in your existing legacy systems could become duplicated, splintered and siloed or remain incomplete. This data could exist in multiple data stores and come in different formats. The key to successful data migration from a legacy system into newer technology relies on safe data extraction.

Converting Existing Data to Match New Formats

After performing data extraction, existing data undergoes conversion and mapping to fit the new system’s requirements. The conversion process is seldom an exact mapping; however, this step remains vital to ensure the new system understands the existing data from your legacy system.

Cleansing Unnecessary Existing Data to Address Quality Issues

Data migration into a new system is the prime time to clean data and delete any duplicates, incomplete data, or data in an unsupported format. For example, legacy systems that retain phone number data that includes dashes will not work on newer systems that do not allow for them.

Validating Existing Data to Ensure a Successful Migration

Once your existing data has undergone extraction, conversion and sufficient cleaning, a sample set gets imported to your new system to run an error check. This checking process mitigates any potential issues before the system goes live.

Loading Existing Data into Your New System

The final step to completing a successful data migration procedure is loading all the existing data into your new system and ensuring it is ready for use.

When Is Legacy System Integration Necessary?

The need for legacy system integration is not always urgent, and due to the sheer size and scope of this task, it is vital to measure the relevance against necessity. Knowing when to begin integration can mean the difference between failure and success of your business. Before engaging in system integration, you must first conduct an extensive system audit.

Some instances where legacy system integration becomes necessary to include:

  • Your legacy system continues to add value to your company and seamlessly performs its designated tasks at a basic level.
  • Your legacy system contains large volumes of mission-critical data, and system migration could cost more than dealing with the drawbacks.
  • Legacy system integration with a new system could allow you to gain full advantage of mission-critical data.
  • Your legacy system performs seamlessly and retains large volumes of data, but you want to expand its features and functionality.
  • Your system performs seamlessly and retains large volumes of data but requires a more intuitive interface.
  • Your system performs seamlessly and retains large volumes of data, but your circumstances require you to share its data with other systems for compliance.
  • You are planning to merge your business with another company and cannot migrate to an updated system for any of the above reasons. 
  • Your legacy system still brings value to your business by providing critical functionality that ensures long-term longevity.

Benefits of Legacy System Integration

While significantly tricky to attain, successful legacy system integration allows the integrated applications to work synergistically with each other and can provide your business with several benefits:

  • Reduces the Need for Manual Work
  • Data-Driven Decision-Making
  • Access to New Technology
  • Lowers the Learning Curve for Old Employees
  • Lowers the Learning Curve for New Employees


How Do Legacy Systems Damage Business Processes and Performance?

Failure to perform a successful legacy system integration or replacement will cause many issues, as seen above. If left unchecked, these issues will grow, resulting in customer dissatisfaction and long-term damage to customer confidence, driving your business to lose loyal customers over time. Unfortunately for companies that remain stubborn against the rapid development of technology, this gap between their legacy systems and the latest available technologies will only grow wider until their business models and operation becomes obsolete.
Therefore the only way for businesses that wish to remain current and competitive is to facilitate a successful legacy system integration or replacement with a trusted IT and ITES service partner adept at seamlessly handling such processes.

Resolve Your Legacy System Issues with solverASSIST

There is no better IT and ITES service partner for you than solverASSIST. We oversee the entire transition process at an enterprise level and assist you by making straightforward recommendations and advising you on how particular transitions will operate and benefit your business. Our capable team of experts will identify potential problems, develop solutions to avoid disruptions, remain responsible for the complete transition of new technology into your business, and ensure seamless integration or replacement depending on your circumstances.

For more information on legacy system integration or replacement, contact solverASSIST today.