The Hidden Costs of Maintaining Legacy Systems Most CTO’s Tend to Overlook
The Hidden Costs of Maintaining Legacy Systems Most CTOs Tend to Overlook
You can’t avoid change, but that doesn’t stop people from trying.
Many CTOs fight change by hanging on to their legacy systems long after better options have become available. This is increasingly common in enterprise organizations that have developed bespoke applications and where change management is a challenge all of its own.
While CTOs who take this approach often believe they’re saving time and money, they are more likely to cost their organization, even more, when considering all the impacts of older systems.
In this article, we will break down the actual costs that you are probably familiar with but also dive into the costs that may not be as obvious.
Actual costs will vary depending on your specific situation, but at a high level, they will always fall into two buckets: fixed and non-fixed.
Fixed costs associated with license fees, software development costs, subscription costs, and support will likely increase over time as fewer companies use the legacy system, but these are relatively stable and predictable.
Non-fixed costs, while also relatively straightforward, are much less predictable and apt to sneak up on you over time. For example, as a system increasingly experiences downtime, maintenance costs will be compounded as specialists equipped to solve those problems become harder and harder to find.
Legacy systems will also devour your IT team's resources. The costs associated with fixing and maintaining the system is one thing, but you also have to account for the cost of things like:
- Additional time to train new hires on outdated systems
- Building and rolling out new patches to your entire user base
- Increased time to research the latest security concerns that modern systems automatically defend against
- Inefficiencies integrating disparate systems to enable practical access and workflows
Over time, these costs will only increase as your technical debt accrues. So imagine if you’re maintaining legacy systems that were originally built 20 years ago. The costs are potentially enormous, but only a fraction of what they will be in another five years.
"The risk of not moving forward is one of the main reasons to consider legacy transformation. It’s not just efficiency. It’s the strategic impact of being left behind - someone can come in and do the things you’re doing better, faster, and cheaper."
Shannon Hughes, Director of Software Development, Thinklogic
This category of expenses is worth some extra attention since it's a blend of the actual and opportunity costs. With legacy systems, the costs related to developing and rolling out security patches increase over time.
The latest advances in cybersecurity may not work with the dated software. As the rift between cutting-edge technology and your legacy systems grows wider, security patches cost increasingly more since you have to use your own internal resources to protect yourself from the most recent exploits.
Additionally, with legacy software, you don’t have enough control to rapidly deploy a security update to the end-user since they have to complete certain actions to get it installed. And older IT systems are a prime target for cyberattacks since legacy software and hardware don’t have all the latest cybersecurity features, leaving you vulnerable to data breaches.
“If there's ever a security issue on the website, you can deliver an update with a click on a button. Conversely, with legacy systems, it's going to cost you to make the end-user install every security update.”
Shannon Hughes, Director of Software Development at Thinklogic
Legacy systems have a cost that’s not so obvious: the legacy system mentality. Just as legacy code can hamstring your ability to be agile, legacy systems will also stand in the way of business growth and flexibility.
With your IT team drowning in system maintenance tasks, they will have no time to innovate on new ideas or products that will benefit your end-users.
And as we have seen with countless companies like Blackberry and MySpace, you will always lose when you fail to innovate. This is especially true in the software industry.
Technologies evolve at such a rapid pace that there is a constant influx of better, faster, and cheaper alternatives. If you’re not on that same fast-paced innovation trajectory, it will be increasingly difficult to keep up with your peers and competitors, even if they are legacy systems.
When legacy systems exist in an organization for too long, they have a way of growing into the organization.
Because users become accustomed to pushing certain buttons and seeing familiar screens, they demand those same buttons and screens when the legacy system is replaced by a new one.
Once legacy creep has taken hold, it becomes extremely difficult to break free of legacy system thinking and start approaching old problems with fresh thinking.
These opportunity costs are going to weigh heavily on you, especially if your legacy transformation is driven by technology concerns resulting from many legacy systems rather than business needs.
The Bottom Line: Legacy Transformation Produces ROI
When it comes to implementing new systems over legacy platforms, hesitancy is understandable.
Change management offers a set of unique challenges, but with proper planning aligned with overall business goals, the long-term cost benefits can far outweigh the short-term struggles.
“It’s not just about the money. We need to be able to keep up with the current workforce. We need to be able to have easy-to-use applications. We need to be able to run instead of crawl. And when you have a legacy app, there are just a lot of limitations hurting your potential.”
Shannon Hughes, Director of Software Development at Thinklogic
With this in mind, CTOs can look to modernize their tech stacks with options that allow for more agility across the organization. The cost of maintaining legacy systems can be detrimental, but they don’t have to be permanent.
Actual costs can be reduced by eliminating redundancies and inefficiencies, and diminished opportunity costs will support your bottom line in more ways than one. Embracing legacy transformation and the move to modern solutions is an investment in the entire organization’s success.
The good news is that you don’t have to go it alone. No one will know your internal processes, challenges, and goals better than you, but CTOs can augment their expertise with a reliable technology partner that’s well-versed in legacy migration and modernization.
At ThinkLogic, we support stakeholders throughout planning, implementation, and onboarding to ensure smooth transitions that drive down costs and drive up results. Contact us today to learn how we can support your legacy system transformation.
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