The Risks of Modernizing Legacy Technology Too Late

Many companies consider the risks of modernizing legacy technology too late.

One of the biggest questions facing any tech company is whether to start modernizing legacy technology or not. It’s unavoidable – advances in new software and programs are made every day, and there are countless options when it comes to bringing your company into the future. 

Why is this such a difficult topic? As it turns out, migration is not an easy process. There are a number of different costs involved. This might encourage companies to put it off until later, which in turn worries developers that they’re modernizing legacy technology too late.

What are the costs involved in modernizing legacy technology?

While many companies prefer to be running on the best programs and software available, the perceived costs of migrating your business can be quite intimidating.

Firstly, modernizing legacy systems is an expensive task. Not only will companies have to invest in an innovative (and likely costly) new program, they’ll also be spending money in the process of finding and testing what systems are going to work best for them. In the current market, this might seem to be too much of an ask.

In addition to funds, there’s a lot of time and energy that will need to be invested in the project. Some companies form a committee or team specifically dedicated to modernization and migration, and this is time that some might feel would be better spent on marketing, sales or developing new products.

There’s also the issue that modernization doesn’t seem to generate an immediate return of investment (ROI). Many business decisions are taken with ROI in mind, and so modernization might be put on the backburner for far too long. That, and decision-making power might be in the hands of investors or directors who might not immediately see the need for migration. After all, one might think, if it’s not broke, why fix it?

As well will see, this is a counterproductive mindset to have. All because there are hidden costs to delaying migration that, while not obvious, will harm companies in the long run. Here are a few reasons why you should be modernizing legacy technology too late.

Why running legacy software becomes more expensive than modernization

This reason might seem counterintuitive, but it turns out to form one of the most compelling cases for migrating your systems to new technology. If we take the White House, the highest institution in the United States, it’s projected that they’re going to be spending 80% of their IT budget on maintaining legacy systems. That leaves only 20% for growth, research, and development. Money lost on maintaining old (and increasingly expensive) systems would be more than paid over by the efficiency of newer systems. When speaking about the dangers of modernizing legacy technology too late, this is often enough to get the ball rolling on high management levels.

But where, specifically, is this money going? What are the concrete costs involved in this kind of loss:

  • Supporting old systems. Some of the major costs here include updates, making changes to monolithic systems (generally change-resistant), infrastructure maintenance and training younger staff to use outdated tech.
  • Ongoing compliance and integration issues. With new regulations regarding data collection and retention, such as the GDPR in Europe, legacy systems need updating in order to stay on the right side of the law. Newer systems were built with this in mind, saving money and time. The same with integrating third-party APIs to enhance your tech – newer systems rely on integrating with Google maps for geolocation, and older systems are far less flexible. Buy migrating now, you’ll be able to save resources by not reinventing the wheel.
  • Maintaining security. Specialists have reported that legacy systems are often one of the largest threats to a company’s security. This makes sense, as the longer a program has been on the market, the more vulnerabilities will have been discovered. By maintaining up to date systems and architecture, companies will save money, time and other resources that could be lost to cyber attacks or malware.

While these are some of the risks of modernizing legacy technology too late, other factors can include lost efficiency, agility or even business opportunities.

The risk of disruption

While total disruption of the type exemplified by Uber or Airbnb is becoming rarer and rarer, even the case of a minor disruption can spell disaster for a company – this is another large risk of modernizing legacy technology too late. There are a number of examples (some specific to a company, some industry-wide) of situations where it was reliance on legacy systems that led to being left behind.

Take a major chain store like Toys ‘R Us. The legacy system, in this case, isn’t related to IT – it’s more the reliance on brick-and-mortar stores. By not being able to migrate their business soon enough to new sales programs, in this instance the online store, they were overtaken by Amazon and have suffered major revenue losses.

The same is true of banks everywhere. Mobile banking applications are, at the moment, forming the hub that connects users to financial services. The ease of an app is attractive, leading customers to choose (or switch to) banks that allow for this degree of convenience. It’s a long process to migrate all one’s services and products to another system, but the ones who don’t may very well pay for it in the long run.

Benefits abound for those who modernize early

The flip side of the coin is that there are a number of major benefits for companies that avoid modernizing legacy technology too late. Being able to offer modern solutions that are light on their feet (particularly if they’re built on microservices) provides a major competitive advantage no matter what market you’re involved in. Customers will be happier with your interfaces and your business will be optimized for future shifts in the industry.

In short, while some might look at the costs of modernizing legacy technology too late, others will look at our current moment in the industry and see major potential and opportunity. Knowing the risks may help convince directors and investors stop dragging their feet when it comes to large-scale migration, but soon they’ll see for themselves just what a truly revolutionary future awaits them.

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