That’s my real life analogy to the legacy systems being used today. Legacy systems may still do the job for some companies who are in a rather conservative industry, but they are quite frumpy, expensive to maintain, and they don’t get the results that are necessary in today’s world of data driven systems, with increasing customer service and internet reliance.
An astonishing number of governmental IT systems are outdated, and the use of COBOL is widespread, even though that language was developed many years ago. There aren’t too many COBOL programmers around these days, and I guess those that are charge a hefty premium for maintenance and repairs.
Most companies that run with legacy systems are afraid of losing data. Added to that, perhaps they feel that the extra cost of upgrading is too much to bear, what with staff training and potential down time. But as the expected life cycle of software is around 5 years, if it is older than that, the business could be in a dangerous area.
What indications are there that suggest upgrading to a digital platform? Let’s have a look at some.
Poor exposure on the internet
Let’s face it, almost everyone uses search engines to find what they need, and if your business isn’t in the first couple of pages of search results, it is being let down. Old, mobile-unfriendly websites impede the business in gaining new accounts, and even retaining single purchase customers. It is verifiably cheaper to retain customers than to find new ones. People like to have a connection to, and an interaction with a company, and brand awareness can be raised with a strong social media campaign and digital marketing. SEO automation is another digital aid that would increase public perception of the company. Even if your products or services are not available online, the company should have a rock-solid website to generate leads and drive sales.
A company may be worried about losing data if they go the digital route, but a legacy system has many holes in security. The longer a system has been out, the more time hackers have had to find exploits. There would not be any security patches or upgrades developed in a long time, therefore making the system ripe for malware, rootkits and all sorts of hacking. There goes the data.
High staff turnover
Good employees are hard to find, time-consuming to train and difficult to keep. Many of them like to see their company moving forward and if it is remaining stagnant, they will look for other, more rewarding opportunities. If employees are leaving, it might be due to repetitive and boring tasks, using outdated software and equipment, and siloing of different departments. They have smartphones, and can see how their line of work is changing outside, becoming more productive and giving better job satisfaction. Loyalty is hard to maintain in these conditions.
Productivity and efficiency gaps
Legacy systems tend to lack the ability to integrate and automate. Departments do not work together, communication is problematic, and efficiency is not at its best. Automation of simple tasks can free up employees to do higher level work, and make them able to react to issues and situations faster. If the company does not use the data it collects properly and in a timely fashion, it will hamper any growth and dent optimisation.
Rising system operating costs
Whatever the costs are at the moment, there will come a time when they will overtake the usefulness of the system. The guy that works in IT, servicing the system, is not going to be there forever, and it will get to a point where the company is burning money. If a company is spending more than 50% of its IT budget on maintenance, it’s time to react. Research shows that some companies are spending 70-90% of their IT budget on legacy maintenance. That doesn’t leave a lot of wiggle room for any emergencies.
I think that most of the concerns about digitising are centred around data loss and security. But transformation can be done in a layered manner, and in fact it is easily possible to segment some sensitive areas and retain them in-house. Additional staff training would need to be done, with ongoing support, to integrate the employees into new software systems, but this would be a benefit to those employees who want to upgrade their knowledge of technology.
Using data correctly will give a business a huge advantage in highlighting customer needs and buying habits. Informed decisions are made easier with statistics.
Any costs from the switch, and there will be many, can be worked out in advance using one of the several online calculators, covering all aspects of a partial or complete move to digitisation. But it has been proved time and time again that revenue increases when transformation is finished and running smoothly. Carefully planning a modernisation process will avoid negative effects, and using a specialist legacy to digital transformation software company will help immensely. Business disruption is not an issue, as the old system will still be working while the software company builds a new one.
We have a love-hate relationship with change, and we would prefer that things stayed the same but got better. Transforming from legacy to digital is about as close as we can get.