How to Overcome the Slow Growth Due to Legacy Systems?

Revitalizing Business Efficiency: Strategies for Legacy System Modernization

Author: Inza Khan

A significant number of companies continue to rely on legacy systems for their everyday operations, with more than 66% still using them. While these systems have some importance they come with a substantial cost—IT departments in the US spend a staggering $85 billion annually to maintain and fix outdated technology, according to Information Week.

The question naturally arises: Why not replace these systems? The benefits of doing so are noteworthy, like improved scalability, enhanced user experience, flexibility, efficiency, and a competitive advantage. However, the challenge lies in modernizing without causing disruptions to ongoing business operations.

Various approaches exist for legacy modernization, each with its own set of challenges. For instance, re-platforming can be both expensive and time-consuming. Yet, by adopting a phased modernization strategy and collaborating with a reliable partner, organizations can navigate the complexities of legacy systems, and ensure a smooth transition toward modernization without impacting their daily business functions. This blog will explore practical strategies for overcoming slow growth linked to legacy systems.

What Are Legacy Systems?

Legacy systems, characterized by outdated computer systems or software face challenges in keeping up with modern advancements. Businesses relying on these systems encounter issues such as high maintenance costs, security vulnerabilities, and difficulties integrating with newer technologies. Additionally, these systems may lack the essential features and adaptability needed for current business demands. Across various sectors, these challenges can affect efficiency and slow down growth. Businesses must address these issues to overcome problems associated with old systems and transition to more advanced and updated technologies.

Overcoming Slow Growth from Legacy Systems: A Practical Approach

Complexity and Dependency:

Legacy systems, especially those using COBOL code and specialized languages like ADSO and IDEAL, create complexity. Managing these systems becomes challenging due to the large amount of code accumulated over the years. The lack of skilled resources familiar with these languages adds to the problem.

Solution:

• Prioritize modernization for critical systems.
• Invest in training programs for staff to learn modern languages.
• Use automated tools for code conversion.

Lack of Flexibility and Scalability:

Legacy applications are often inflexible, making it difficult for companies to adapt to changing business needs. These rigid systems hinder innovation and responsiveness.

Solution:

• Embrace cloud-based solutions for increased flexibility.
• Adopt modular programming languages like Java.
• Implement integrated programs to automate procedures and reuse code.

Misalignment of Business and IT Goals:

Legacy systems tie up significant funds in maintenance, limiting resources for new projects. This misalignment between business and IT priorities can hinder growth.

Solution:

• Develop a modernization strategy aligned with business goals.
• Use cost savings from modernization to fund new projects.
• Foster collaboration between business and IT teams.

High Costs and Dependence on Mainframes:

Maintaining mainframes is costly. While reliable, businesses seek cost-effective alternatives.

Solution:

• Evaluate the cost-effectiveness of alternative platforms like Windows.
• Use automation for code authoring to reduce labor expenses.
• Gradually transition from mainframes to more modern, low-cost platforms.

Compliance Challenges and Customer Service Limitations:

Legacy systems can pose challenges in complying with laws and impact customer service. Paper-based systems limit real-time access.

Solution:

• Use modernization to comply with laws like Sarbanes-Oxley and HIPAA.
• Enable real-time access to applications.
• Implement mobile data entry for improved customer service.
• Invest in security measures like geo-fencing and encryption.

Updating Legacy Systems: Best Practices

Assess Your Legacy System:

1. Total Software Review:

Start by thoroughly evaluating your existing software. Even if it once met your needs, it might fall short now. Consider your current business goals and assess whether your software aligns with them.

2. Consider Business Development Objectives:

Define your business development objectives before the assessment. This helps identify gaps and inefficiencies in your current legacy system, guiding the evaluation process.

Explore Current Solutions:

1. Market Offerings and SaaS Solutions:

Check the current software market and available Software as a Service (SaaS) options. There may be modern alternatives that better suit your business needs. Assess how adopting new technologies can contribute to your growth objectives.

2. Custom Software Development:

If there’s no off-the-shelf solution that fits, consider custom software development. Tailoring a solution to your specific needs ensures functionality and efficiency without compromises.

Choose Your Modernization Strategy:

1. Re-platforming:

Move your existing application to a new platform with minimal code changes. This improves compatibility and performance without a complete overhaul.

2. Code Refactoring:

Restructure the existing codebase without changing external behavior. This enhances code readability, maintainability, and efficiency while preserving functionality.

3. Enhancement and Migration:

Upgrade and move your application to a more modern environment. This approach addresses functionality and performance issues, ensuring a smoother transition.

4. Software Rebuilding:

Create a new application from scratch while preserving existing features and functionality. This approach is resource-intensive but offers a fresh start with the latest technologies.

Decision-Making:

Choose a modernization strategy considering factors like budget, time constraints, and long-term goals. Seeking assistance from IT professionals can provide valuable insights for informed decision-making.

Conclusion

Addressing the challenge of slow growth due to legacy systems is important, given the widespread use of outdated technology in many companies. While the benefits of replacing legacy systems are clear, the complexities and potential disruptions in the modernization process require a careful and phased approach. Legacy systems present various challenges, hindering efficiency and growth across different sectors. It is a must for businesses to tackle these challenges to transition to more agile and advanced technologies. The practical approach involves addressing specific issues associated with legacy systems, such as complexity, lack of flexibility, and misalignment of goals.