The Cost of Legacy System Modernization

The Cost of Legacy System Modernization

Businesses, as with everything else, are often hampered by tight budgets. As such, money is often allocated to purchases that require smaller amounts of funds in the long-term, rather than large one-time expenses. The same can be seen in personal budgets, which a person might keep in mind when deciding to buy themselves a new pair of shoes. They might decide to purchase cheap shoes from Walmart over a much more expensive pair from Steve Madden to keep within their tight budget. This may seem like a smart decision, but trying to save money in the short term, especially on a purchase for something you use constantly, never ends up being cheaper in the long run. Those inexpensive shoes are more likely to wear out within a year, or sooner, forcing you to purchase replacements again and again. If you’d gone with the more expensive pair, the initial cost would have been higher, but they’d have lasted you a good decade (or more!) without complaint. The same could be said for businesses who opt to spend relatively smaller amounts of their annual budgets on the upkeep of their legacy systems, rather than putting a large amount of money into replacing those systems with something modern.

However, just like those cheap pair of shoes, legacy systems can’t last forever. Hanging on to them will eventually cost a company far more in the long run, leaving behind wasted funds, security headaches, and a drop in customer trust.


What is a legacy system?

A legacy system is an application “based on outdated technologies, but is critical to day-to-day operations.” Think using physical paper to fill out forms for the government, instead of a more technologically advanced online submission form. However, antiquated computer systems also fall under this umbrella, as long as they have some sort of deficiency, like running on an outdated programming language.


The Cost of Outdated Systems

Speaking of the government, legacy systems are often susceptible to crashes or massive bugs. This was unfortunately on display in 2018 when the IRS suffered a computer glitch that “knocked offline the agency’s ability to process many tax returns filed electronically.” Steep governmental budget cuts throughout the years had decimated the IRS’s workforce and left their 60+ IT systems hopelessly out of date by up to nearly 6 decades. Instead of putting money into modernizing a vital organization responsible for the financial information of 300+ million citizens, the government decided to maintain the status quo, with unfortunate results.

These outdated IRS systems reflect those of every business; many legacy systems are vital to a company. That means there’s a fear that upgrading or changing any part of it, even in minor ways, may mess up an important piece of a business or organization’s operation. However, the staggering cost of keeping systems up and running, which are decades out of date, are far better spent on modernization. In 2019, 80% of the US Government’s IT budget went towards operating and maintaining its various legacy systems. That’s 80% of the budget that could have been used for a one-time upgrade, modernization, or replacement for ageing, defunct systems currently vulnerable to cybersecurity threats, crashes, and obsolescence.

Manufacturers hit a point where they simply stop supporting and updating their old systems. As of 2020, Apple has abandoned any phone they’ve made before the iPhone 7. Meanwhile, its current Mac operating system, Catalina, has long-since started forceable breaking non-native applications that aren’t suitably up-to-date. This software orphaning means that, not only are they no longer compatible with the newer upgrades and features Apple continues to roll out, but they’re also easy targets for criminals. Legacy systems simply don’t have the same robust security standards that modern systems have. After all, a system that may be decades old simply can’t keep up with (or detect) the increasingly new and inventive ways in which hackers operate or the complexity of their viruses. Keeping a system up-to-date by 2020 standard, not 2010 or before is paramount to keeping it (and the data it holds) secure.

Another cost of maintaining a legacy system often comes down to the language used in their creation. As the years progress, the programming language used in a system may become defunct and archaic, meaning no one in an IT department may be familiar with it anymore. This is a disaster waiting to happen if the system ever crashes during a business’s peak period or when a quick fix is needed. 2004 is a cautionary tale of this type of downside. The year saw a monumental crash of a legacy system implemented by Comair, a South African aviation company. The system was written in Fortran, a programming language no one at Comair understood, so when the system crashed on Christmas Day under the weight of an unexpected 2-day snowstorm and the subsequent scheduling changes, there was no one to deliver a quick fix. The crash brought down Comair’s entire system, affecting almost 4,000 flights and stranding almost 200,000 passengers. The chaos ended up costing Comair (and Delta, its parent company) $20 million, their president, and their reputation. Senior executives at Comair and Delta, like many companies, didn’t believe that upgrading or replacing their system was much of a priority; a mistake that ended up costing them dearly.


How to Upgrade

There are generally two options for how to go about replacing a legacy system.

  1. Rebuild and replace; the more disruptive approach. It involves completely replacing the old legacy software with an entirely new, modern system. This tends to be more of a last resort for companies, although it works best for systems that are particularly susceptible to security threats which can’t be bolstered by supplementary systems. Unfortunately, this method means some period of downtime as your company switches over to the new system. This also means that any slight hiccup during the switching process can increase the time in which your business’ systems are down as the problem is fixed.
  2. Slow and steady; this is a far more measured approach which many companies opt for over rebuild and replace, as it puts less pressure on achieving the switch over as quickly and seamlessly as possible. For this piecemeal approach, the modernization comes in stages, with sections of a legacy system being slowly replaced by newer, modernized ones. This option has its own downsides, however, as the modern replacements may not co-exist happily with the parts of the monolithic old system still in operation.

Hanging on to an old legacy system is an unfortunate side effect of trying to save an organization money in the short-term. It’s a decision that leaves a vital component of a business susceptible to security breaches, system crashes, application incompatibility, and long-term financial drain. Luckily the answer is simple: system modernization. Is your business ready to leave the cost of the past behind?

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