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6 reasons legacy systems are still in use

Staying with tried-and-true legacy systems can feel like the safest route. But as the world changes at a dizzying pace, IT leaders might want to reconsider that strategy.

Despite the hype around digital transformation and the seeming ubiquity of the cloud, many companies prefer legacy systems because of their reliability, cost-effectiveness and familiarity. But organizations should be aware of the limitations and risks associated with using legacy systems in today's evolving environments.

What are legacy systems?

Legacy technology refers to any outdated class of technology, whether hardware or software.

The term legacy system refers more specifically to outdated software applications still in use.

Various factors can render an application outdated. IT professionals generally define legacy systems as those that include the following:

  • Older systems and versions.
  • Systems and software with unfixable security vulnerabilities.
  • Technology that costs the organization more to run and maintain than modern systems would.
  • Technology that fails to adequately meet the organization's current needs or hinders growth.
  • Systems and software no longer supported by the vendor.
  • Homegrown systems or those customized by the enterprise itself that run on programming languages few developers still know.

"It's the stuff we put in over the years that has become obsolescent or outclassed by other technologies," said Joe Davey, partner at West Monroe, a digital services firm, based in Chicago.

Why legacy systems are still in use

The Information Age is 75 years old, characterized by decades of enterprise technology implementations. Technology has evolved by leaps and bounds during that time, with continuous innovation quickly making prior generations of IT obsolete. Yet many organizations still have old tech in place. Some companies even run mainframe computers and systems written in COBOL -- which debuted in 1959.

Here are six reasons why legacy systems are still in use.

1. The system works well enough

Company leadership might maintain the status quo for the simple reason that the system performs the way they want.

Many organizations keep legacy systems in place because they still work, said Nitin Naik, technical fellow at Mitre Corp., a not-for-profit research and development organization, headquartered in McLean, Va.

"They don't have hiccups, so people feel good continuing to use them," Naik said. Risk-adverse executives might accept this good-enough performance rather than go through the challenges and uncertainty that come with updating and modernizing, he said.

2. Service continuity

Enterprise leaders often stick with legacy systems because they fear disruption to the services those systems perform.

The fear of service disruption is a particularly compelling reason for companies to stay on the legacy systems they rely on for continuous services, Naik said. Many industries -- including government and healthcare -- have systems that run all day, every day and year-round.

"And you can't stop those operations that are 24/7/365," he said.

In those cases, and in other situations where service continuity is a high priority, organizations that want to shed a legacy system typically need to implement and run a modern system in parallel to the legacy one and then switch over.

That process can entail a costly and complex strategy that further deters some organizations from leaving their legacy systems.

3. Update challenges

Maintaining the continuity of services while modernizing is one of the many challenges that enterprises face when trying to shed legacy systems.

Dealing with the complexity of code within legacy systems, as well as teasing out the business processes the systems support, creates further challenges, said Dave Powner, executive director at Mitre's Center for Data-Driven Policy.

The complexity and related challenges of untangling thousands -- or even millions -- of lines of code from the business processes and rules that the code enables can be daunting. Organizations might not have the tools or talent to take the task on.

"These legacy systems are very tricky to swap out, and so companies will build around them, modernize around them, and leave them in place because the cost or risk of switching them out is too great," West Monroe's Davey said.

4. Insufficient funding

The cost to modernize applications and the challenge to secure the money needed to pay for upgrades also factor into why many organizations still have legacy systems in place.

Many organizations want a quick ROI. They're often unwilling to commit funding for modernization projects that could take a few years to implement and deliver returns.

Organizations will fund new revenue-enhancing features that can quickly be added to or work with legacy systems rather than pay for updating the systems, said Suneel Ghei, principal research director at Info-Tech Research Group, an IT services management company, headquartered in London, Ont.

"It allows technical health to be kicked down the road," Ghei said.

5. Misunderstood maintenance costs

Executives acknowledge that legacy tech hinders their organization's digital transformation.

Many executives often don't or can't quantify the true TCO to maintain their legacy systems. Similarly, they often don't or can't quantify the ROI if they modernized.

That lack of clear TCO coupled with the absence of a compelling ROI means enterprise leaders don't know how much they're losing out by keeping their legacy systems in place. As a result, they don't feel an urgency to act.

Executives typically have targets to meet for revenue improvement or customer service scores, Ghei said. But not having a clear target to move off legacy systems, combined with the inertia of the familiar, often means executives continue to use legacy systems by default.

6. Overlooked or underestimated risks

Just as executives might not fully appreciate the missed opportunities of keeping legacy systems in place, they can also overlook or underestimate the risks associated with legacy systems. In other words, they might not give enough weight to business risks as long as the systems work.

Business operations are at risk if problems with the legacy system arise. Organizations might face insurmountable security or support challenges that affect their ability to run the business.

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