In business, change is a given and flexibility is a smart strategy for staying ahead. As the rate of technological innovation continues to increase, the reality of working with software and hardware—old, new, and everything in-between—is changing. It’s important to be aware of what legacy applications are—and how to handle them in your organization.
Legacy systems are often fundamental to your organizations infrastructure, which is why so many organizations are rethinking their approach to modernization. Done correctly, improvements to legacy applications and implementation of net new applications can improve operational efficiency and employee and customer experience, especially if you pay careful attention to end user experience. There’s also an opportunity for cost reduction over the long haul.
What are legacy applications?
Techopedia defines legacy applications as “applications, platforms, hardware setups, programming languages, and other technologies that have been superseded by newer options.” In the business context, legacy indicates the age of the technology used to support the software or hardware, not necessarily the importance of the function the technology provides. Legacy systems are still in use because they provide essential business functions, regardless of their supportability. This can complicate the decision of how and when to upgrade.
You might be asking: if legacy applications are so troublesome, why are so many still in use?
In a word, cost. These applications usually fulfill a valuable business function, and though they may no longer be top-of-the-line in terms of usability or integration, they work well enough. The cost of upgrading—researching, selecting, training, integrating, and more—can seem overwhelming. Quick cost/benefit analysis may point toward allowing the application to limp along, but in the long run, continuing this way poses major risks.
Risks associated with outdated software.
Companies willing to look closely at their application infrastructure and processes may see a few important—and potentially more costly—risks:
• Uncertain data reliability. Salvaging data from legacy applications can mean physical recovery from outdated hardware or a complicated process extracting information from siloed, cumbersome software. With how fast technology changes, not being connected to the cloud (or automated backups) puts your data at risk.
• Poor insights. With the emergence of Industry 4.0 and the Internet of Things, connectivity across technical infrastructure is becoming more important by the day. Accurate data and careful analysis lead to actionable business intelligence, the information that helps you make more informed, timely, and lucrative decisions. With legacy applications inaccessible to sophisticated data analytics (machine learning, artificial intelligence, etc.), decisions will be based on incomplete data that does not reflect your business accurately. If it’s not trustworthy, people will abandon the data all together and rely on intuition rather than concrete information.
• Lack of integration. Legacy applications often have limited integration and a poor user experience, and employee experience is adversely impacted. Depending on the business function of the application, individuals or groups may develop alternate applications or processes that run parallel to the legacy application, but with improved speed, connectivity, or usability. This results in the company having duplicate functions, redundant processes, and no single view of the data or customer. All of that redundancy leads to poor efficiency and increased operational overhead.
According to Gartner, "every dollar invested in digital business innovation through...2020 will require enterprises to spend at least three times that to continuously modernize the legacy application portfolio." Many organizations continue to use outdated systems, weighing risks over reward. However, there are quite a driving factors on why legacy systems require modernization to improve operational efficiency.
The operational costs of legacy systems.
The operational costs will not necessarily increase in relation to the age of the application, however, the cost of maintenance to the infrastructure, legacy applications, and systems play a key factor in driving modernization as critical business needs increase.
Knowledge management required in legacy languages.
The infrastructure requires legacy coders and resources with a specific expertise to maintain the tools and system, making it difficult to find the right talent with the right skillset.
Missed opportunities due to systems incompatibility.
Modernizing legacy architecture creates opportunities for organizations to become more agile, enabling multiple ways to scale and innovate.
There are two general strategies for modernizing legacy applications: transplant the current data and infrastructure into the cloud as-is or replace the current data, processes, and infrastructure with an entirely new, cloud-based service. Every business has a unique timeline and budget, so how should companies approach the process?
• Evaluate current needs. Analyze the needs of your business for today, regardless of what’s currently in place. What services do you require to run your business? What business function does your legacy application serve? Are there other technologies serving the same function? In other words, what is unique about this application? Can its function be absorbed by another service?
• Decide what is most important. Do you need to achieve parity with your current system or are you looking to future-proof your application? What is your total cost of ownership? Does it need to be up and running tomorrow? What are the availability requirements? What new functions are users asking for? Remember—applications are critical because of how people use them, not necessarily because of what they are. Define your critical path and build around it with a focus on end user experience.
• Investigate new technologies. When considering strategies for data migration and digital transformation of infrastructure, solutions exist for every budget, ranging from cloud-hosted software and IoT-integrated hardware to application re-hosting. Application re-hosting and/or a hybrid environment are good solutions for companies that are not ready to complete a cloud migration immediately. These reduce maintenance and operational costs of the technology being used.
When done correctly, reducing reliance on legacy infrastructure and applications can result in powerful changes. By upgrading, you can:
1. Drive growth through improved efficiency. With enhanced connectivity and streamlined processes across your organization, productivity and capacity will increase.
2. Reduce costs. By transitioning away from legacy applications, maintenance and support costs will change. If you move software and hardware from on-prem to the cloud, maintenance becomes easier and there is up-front cost reduction. Upgrades can be automated, backups are streamlined, and users can have 24/7 access. Managed services also allow businesses to hand off database management to their cloud provider.
3. Plan for the future. Staying aware of emerging, edge technology and how fits with your business is a great step toward longevity. Modern architecture allows you to pivot as the needs of your business change.
Legacy modernization is an iterative approach that may include implementing new technologies along the way, such as advanced analytics, cloud, mobility, or cybersecurity. The application modernization is a journey, and there’s no standard timeline for transformation. Logic20/20’s digital transformation practice can help handle every aspect of the legacy system modernization, by analyzing the current solution, road mapping a strategic cost-effective integration process, implementing new tools, building your business strategy, and using best practices in cloud and application implementation.