Are legacy systems hurting your business?

Businesses reliant on legacy systems are struggling to keep pace – and this is hurting them financially, warns John Tallon from Storm Technology.

The acceleration of digital innovation, cloud adoption and technological advancement in recent years has fundamentally altered the way in which businesses operate. However, some companies are still relying on legacy systems which, while once effective, are now struggling to keep pace with the needs of modern business and are proving costly.

The term legacy system refers to a piece of software, technology or system that is no longer flexible or agile enough to meet the current digital requirements of an organisation – which have evolved rapidly in recent years with the rise of hybrid working. Often, such legacy systems are built using outdated methodologies and architectures, creating difficulties when integrating with modern technologies like the cloud.

“The impact of legacy applications reaches far beyond the IT and the financial department, with other drawbacks spanning all departments”

Furthermore, companies may find that such solutions are no longer supported by vendors or it’s becoming increasingly difficult to find IT resources with the technical knowledge required to maintain and modify same. In other instances, these systems may no longer receive security updates and teams are being forced to find workarounds for complex or costly problems stemming from outdated solutions.

Rarely do these legacy systems fail to operate as initially expected. In fact, they often remain in situ as they still work and get the job done. However, the reality is that they do so at a cost to the organisation using them.

Holding back businesses

According to VP Analyst at Gartner, Stefan Van Der Zidjen, “For many organisations legacy systems are seen as holding back the business initiatives and processes that rely on them. When a tipping point is reached, application leaders must look to application modernisation to help remove the obstacles”.

And while migrating from these legacy systems will require investment, maintaining them may prove much more costly over the long-term. In fact, plenty of statistics suggest that maintaining and operating a legacy system consumes anywhere between 60% and 80% of corporate IT budgets and resources, making the case for application modernisation clear.

Moreover, the impact of legacy applications reaches far beyond the IT and the financial department, with other drawbacks spanning all departments. By forcing teams to work within the constraints of the legacy system and creating dysfunctional processes where legacy cannot integrate with modern technologies, the real needs of the business are overlooked and people are impacted.

Nowadays, agility and flexibility are key. Organisations that leverage modern cloud solutions can gain a competitive advantage over those reliant on legacy systems, not just in terms of staff output but also market delivery. With greater processing power and improved data insight, modern systems enable businesses to better respond to market shifts and reduce their time to market.

The rise of technology adoption has also led to a shift in employee expectations. High-speed technology solutions are expected by default. Lengthy load times, fragmented business data and frequent bugs have a detrimental effect on overall employee morale, as well as productivity and efficiency.

In turn, this can have a negative impact on customer service quality. Regardless of the industry, clients expect fast, high-quality responses from the businesses they choose to engage with. Mobile devices are proving valuable in this regard and have become the platform of choice for research, sales and post-sales support with many legacy systems failing to deliver on the speed and service expected by the modern client.

Modernising workplaces

Therefore, the impact of legacy systems on a business’ bottom line could be significant and highlights a need for greater modernisation in workplaces. Organisations must have effective IT solutions in place and modern technologies which empower their people and drive their business, otherwise they could struggle to attract talent, boost productivity and save costs.

“There’s no excuse to be confined to or restricted by such platforms anymore”

What is positive is that Irish companies clearly understand this, given that recent research by Storm Technology (conducted by Tech Central) found that larger enterprises and businesses are set to spend an average of €1,588,720 on modernising the workplace in 2023.

In terms of priority areas for this spend during the year ahead, the study found that collaboration and productivity tools ranked highest (69%), followed by security and compliance (64%), and cloud infrastructure (53%).

However, if businesses are to truly capitalise on the benefits of such solutions and their investment – which doesn’t necessarily have to be huge but rather should be smart and made with the objectives of the organisation front of mind – legacy systems cannot be an obstacle.

And there’s no excuse to be confined to or restricted by such platforms anymore. Industry leaders, such as Microsoft, have offerings which enable companies to do more with less and make their software more connected. By collating data, linking systems and streamlining processes, organisations can enhance the productivity and performance of both individuals and technologies.

Through the centralisation, automation and modernisation of IT – for instance, through the use of Super Apps – businesses can address the challenges associated with legacy systems and overcome the obstacles that are not just restricting people and the workplace but stifling their levels of service, success and growth.

John Tallon
With over 22 years’ experience in the software industry, John Tallon is the Director of Modern Apps and Modern Workplace at Storm Technology, a market-leading Microsoft business solutions provider. Helping organisations to drive value through software solutions and cloud adoption, he specialises in the areas of application and data modernisation, digital workplace, and employee experience.