Introduction

Modernising legacy software can be costly, but the maintenance costs of using legacy software is higher.

The longer organisations wait to modernise, the more they will need to spend. The costs of using legacy software can be difficult to quantify, as these outdated systems come with both obvious and hidden costs.

In short, it may seem as though you are saving money by not updating your software, but in the long run your costs will accumulate.

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The Obvious Costs

There are easily identifiable and measurable ways organisations can figure out the costs of running legacy software.

Ongoing Maintenance

Ongoing maintenance costs look to be one of the highest, with research finding that IT departments allocate over 55% of their budget to maintaining business operations.

Legacy software is likely to become unreliable and cause continuous failures and errors, requiring significant repairs or attention. The cost of maintaining the software includes hardware replacements, server maintenance, bug fixes, salaries (for expert and sometimes rare skills), and more.

Skilled Resources

Legacy systems need experts with the necessary skills to operate and support them, but these skills are decreasing year on year as the use of the technology also decreases and the skills move on or out of the market. Organisations need to maintain these skills, either by hiring staff with the skills or upskilling new and existing staff.

Finding experts can be difficult, and to train staff organisations will have to budget for time and effort to complete the required learning and support.

As they are not using modern technologies, user experience can be affected thanks to decreased performance and older user interfaces. In an extreme circumstance, staff turnover can increase if they are left dissatisfied, adding to the cost of keeping the legacy system.

Licensing and Support

Legacy software usually requires special licensing as it is no longer supported by the original vendor. These licences can be uplifted due to the ‘rarity’ of them and extended contracts up the supply chain to maintain them.

Included in these costs is also extended vendor or third-party support. As the legacy software is end-of-life/support, getting professional support coverage accounts for large overheads.

Environmental

Environmental costs from legacy technology are higher than their modern counterparts, as older technology uses more electrical power to run and cool infrastructure. If organisations decide to move to cloud, they can see a  77% reduction in servers, 84% reduction in power, and a 28% increase in cleaner power.

Hidden Dangers of Obsolete Legacy Systems

Aging software can weigh down operations, drain resources, and cause unknown vulnerabilities.

As IT spending becomes more and more decentralised, having oversight of all the systems running becomes a challenge. This is a risk when it comes to maintaining obsolete legacy systems. When administrators move on, and knowledge of the system is lost, they can be left to run in the background, creating a backdoor into the organisation.

Older systems are unlikely to have the capabilities to keep organisations secure due to the inflexibility to expand the software to use said capabilities. This means legacy systems often have security holes that make them easy targets for hackers as they can gain unauthorised access and steal sensitive information.

As regulations are released, legacy systems may no longer meet requirements for privacy and data protection, leaving organisations open to legal and financial consequences. For example, the Data Protection Act 2018 requires all UK data controllers to implement and maintain proper security measures to safeguard personal data. If not followed, organisations can be fined up to £17.5 million and lose brand reputation and customer trust.

Older software also may not be able to quickly respond to audits or alert organisations to attacks due to outdated capabilities, further risking non-compliance and data breaches.

The Hidden Costs

Hidden costs refer to the indirect expenses that are not easily identifiable. These are not explicit costs, rather lost opportunity costs.

The amount of money organisations pay or overpay to maintain legacy software depends on several factors such as the level of support required, the number of users, the complexity of the software, inefficiencies and low productivity from slowed performance, and the age of the software.

Security and Data Breaches

Legacy software has increased risks of cyber threats and data breaches that can threaten a organisations finances and reputation. According to IBM’s 2023 report, attacks stemming from ‘known unpatched vulnerabilities’ average a cost of $4.17 million.

Using outdated versions of software leave organisations vulnerable to data breaches as it is not getting routine updates or security patches. Attackers utilise these known vulnerabilities to employ effective attacks. Costs related to cyber-attacks include security risk management, breach identification, ongoing maintenance, preparing for recovery, and remediating the breach.

Disruptions

Costs associated with system disruptions and downtime also arise from cyber-attacks. These have a high cost due to the lowered productivity and effort required by staff to resolve the issue or work around the disruption, all taking staff away from valuable work. If the problem is not able to be fixed internally, organisations may need to hire additional support. As legacy software is more susceptible to downtime and other errors, these costs can quickly add up. Organisations should consider the costs of fixing bugs, handling staff or customer complaints, and paying for the skills to mitigate the risks when deciding to maintain their legacy systems.

Missed Opportunities

There are multiple missed opportunities that can be caused by maintaining the use of legacy software.

The maintenance of these systems reduces the resources available for innovations such as automation, that can improve productivity and efficiencies across an organisation.

Furthermore, if organisations choose to stick with their legacy software, they are preventing the ability to seamlessly integrate between systems and new technologies, as many outdated systems were not built for this purpose or protocol(s).

Conclusion

The continuous use of legacy software means organisations have more overheads and hidden costs impacting their business.

Using outdated technology can impact staff, IT department productivity, customer experience, and overall competitive and business success.

Modernising can be expensive, but so can funding outdated and inefficient legacy software for years. By choosing to modernise, organisations can remove unwanted costs, increase productivity, improve customer satisfaction, improve security, and enhance performance (integration, automation, traffic performance).

Get in touch for more information about how Responsiv can support your legacy modernisation project(s)!

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