Legacy Systems and Modern Enterprise

Posted by Svetlana Milovančev on 20 May 2020


What is a Legacy System?

A legacy system is an information system that could be based on outdated technologies. However, it is critical to regular business operations. Many legacy systems are part of major organizations, some of which are government and public ones. Although legacy applications are running on obsolete mainframes, their systems are adapted to deliver particular functionalities. Nonetheless, since these systems are mainly based on outdated programming languages and technologies, they face software and hardware issues, thus operating with security vulnerabilities. To avoid these problems, legacy systems need to be modernized.


Legacy System Modernization

The US Government Accountability Office (GAO) issued a report on the 10 most critical federal legacy systems in need of modernization, with the full list including 65 systems. In this report, they presented their findings and recommendations to ensure these federal agencies modernize their legacy systems. Significant sums are earmarked for this purpose as legacy systems are exposed to technical problems and crashes at any time. Some legacy systems are difficult, or even impossible, to maintain, improve, support, or integrate with new systems due to their architecture, underlying technology, and design. In support of this, the majority of CIOs included in a survey claim that 40 to 60 percent of their time is dedicated to managing legacy IT instead of focusing on strategic activities. Therefore, legacy technology causes additional costs and puts an important barrier to digital transformation.


Legacy Software Expenditure

Although there are issues due to the age or quality of underlying technologies, many organizations still continue using legacy systems. Their reasons are mainly to do with the fact that the software has been operating well for a long period of time and still can deal with most tasks. However, they should be aware that their systems require constant:

Maintenance and support,

Integration and compliance as they need to comply with industry regulations,

Security to avoid data breaches.

If they fail to secure the aforementioned, they risk losing potential business opportunities as system issues can impact a company’s long-term profitability and competitiveness. In addition, organizational agility is greatly reduced with processes that are not modernized and automated.


Maintenance and Support

Maintenance operations include:


Regular updates and changes

Considering the monolithic nature of legacy systems, even a small update may result in a number of conflicts in the system. Therefore, updating and changing these systems require skill, time and effort, which can be pricey. What is more, legacy systems are usually large in terms of codebase and functionality and due to having vast amounts of documentation and undocumented features, a certain risk is always present when interfering with the source code.



As both the underlying infrastructure and the software age, they become more difficult and more costly to maintain. Legacy systems usually need a specific technical environment, including hardware. Therefore, infrastructure maintenance requires more funding than modern cloud-based solutions. Another serious infrastructure issue is connected to legacy data that is spread across different databases and storage areas. Thus, increased storage space optimization can be implemented with some difficulty. Legacy data being gathered and systematized manually to be transferred to a new database is usually time-consuming and cost-intensive.


Staff training

The maintenance and support of legacy systems require special skills and knowledge. If the developers who built the software have retired or moved to other technologies, it is essential to find and retain new employees, which can be an additional source of expense. On the other hand, the costs could be reduced by outsourcing a company with the right expertise and staff.


Integration and Compliance

Modern software platforms mostly rely on third-party application program interfaces (APIs) in order to access and exchange the required data. While modern technologies are integration-ready by default, obsolete and rare technologies lack compatibility. Thus, although API vendors provide support for most programming languages and frameworks out of the box, outdated technologies of legacy systems are incompatible. A significant amount of custom code is required when connecting a legacy system to a third-party service with a potential risk of the final integration not working in the end. This is why organizations with legacy systems usually struggle to comply with constant new legislation and regulations, which especially refers to heavily-regulated areas such as politics and law.



Legacy systems tend to be less resistant to cyberattacks, harmful programs, and malware. The reason for this is mainly connected to the fact that the software has been in operation for years, even decades, and the attackers have had sufficient time to get familiar with the code and identify its vulnerabilities.

Another cause may be that vendors stopped supporting this outdated software which, in turn, means there are no patches and the system is not kept compliant with the latest security requirements. Even with custom-built systems and enough resources to maintain it, adding more patches directly indicates extra investment.




What About Innovations?

Regardless of the problems and risks related to outdated software, some companies still consider reengineering the current solution in case of an emergency rather than adopting new technologies and business models. This can lead to some missed business opportunities, which gives the competition a great opportunity to outperform you in the market. Digital transformation drives business growth, competitiveness, greater efficiency and cost reduction. Many companies are adopting digital and remote as their main channels for interactions thus saving on low-cost and efficient processing. Be careful not to lag behind these changes.

In most cases, organizations relying on legacy systems lack organizational agility to adapt to new changes and market demands. Despite how complex it can be to move from legacy IT to the agile and digital-enabled one, organizations are required to meet the modern IT demands. On the other hand, legacy systems can contribute to holding back innovation as they are not easily updated and modified.



What Comes Next?

According to IDC research, over half the world economy will turn digital by 2023 requiring a new species of enterprises to compete and thrive. In order to keep track of the new digital transformation, organizations should stop relying on outdated software and undergo modernization of their core technologies.


Third-party expertise may be of great assistance in this inevitable cycle of change. PanonIT team can deal with all aspects of legacy system modernization, from evaluating your current solution, creating a business strategy, prioritizing the features to rebuilding your product. 




Let’s commence your digital transformation together.


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