The Business Risks of Holding on to Legacy Technologies

In 2018, one of the largest and most complex digital systems in the United States collapsed due to a computer glitch. The antiquated system used by the U.S. Internal Revenue Service crumpled due to a software error, leaving over 5 million Americans trying to file their taxes before the deadline.

Legacy Systems

Last year, during the height of economic turmoil caused by the coronavirus pandemic, millions of unemployment checks were held up because state governments were using an antiquated coding language to process them. COBOL was a popular coding language decades ago, but programmers fluent in it have long since dwindled. This left states and people clamoring for their unemployment benefits.
These problems could have been avoided if these organizations didn’t use unreliable legacy technologies.

What are Legacy Technologies?


Legacy technologies are outdated technologies and systems. The main characteristics of a legacy system are as follows:

  • The system or technology is no longer available for purchase in the market because it has been discontinued by the manufacturer or the technology is no longer used by the industry.
  • The system uses technology or components no longer compatible with modern systems.
  • These systems and technologies are no longer supported or maintained by the manufacturers because of their outdated.

Read also, Scaling Up: How to Convert Your Home Recipe for Mass Production

Despite all these disadvantages, some companies still hold on to their legacy systems. Legacy systems permeate businesses of all sizes. Perhaps it’s an outdated filing network used by a company that sells machines for painting roads. Maybe it’s the whole server network of a major multinational corporation. No matter the size and capabilities of the business in question, legacy systems are like ticking time bombs.

What are the Risks of Holding on to Legacy Technologies?

Legacy systems are like old structures. They may appear usable and could still function, but the right conditions can lead to catastrophic collapse.

  • System Failure

Just like the IRS system failure in 2018, legacy systems can suddenly collapse, leading to widespread system failure. Legacy systems can fail because of software failure or hardware issues caused by their obsolescence. These issues can cause no end of inconvenience and cost companies thousands or even millions of dollars. If the system doesn’t have a replacement at the ready, operations could be suspended indefinitely while it’s repaired, if it can be repaired at all.

  • Large-Volume Issues

As businesses and operations grow, so do their operations. However, legacy systems designed by programmers decades ago may not have the bandwidth to accommodate so many users and processes. Issues regarding large volumes of processes can lead to operations slowing down if not shutting down the system entirely as it fails to cope with the demand.

Legacy Systems
  • Inefficient Processing

Legacy systems may have been cutting edge back in their day, but they may no longer be up to snuff compared to modern solutions. The systems in question could have slower processing time because they’re not equipped to handle large amounts of data. Their interfaces and functions may no longer be compatible with modern clerical skills. In any case, their properties could lead to inefficient processes and slow down your entire enterprise.

  • High Costs

Legacy systems require a lot of maintenance and cost a lot of money as a result. According to one report, retail businesses spend 58 percent of their IT budgets maintaining legacy systems. The high cost of legacy systems stems from frequent breakdowns, their archaic components, which could be costly to find or manufacture, and expensive specialists. Resources that could be used for modernization or expansion are funneled instead to fueling these obsolete systems.

Why do Companies Retain Legacy Technologies?

If legacy systems expose businesses to such risks and disadvantages, why do some companies retain them? The following are a few explanations on why companies may be unwilling or unable to part with their legacy systems.

  • Operational Issues

Legacy systems are often essential components of a business’s operation. As obsolete as they are, they may be used all the time by the company’s employees or are important facets of major processes. As such, migrating from a legacy system to a new one may cause operational problems that threaten to derail the company.

  • Customized Programming

A lot of legacy systems were custom-made for the businesses to better cater to their processes. However, if these systems aren’t routinely updated and occasionally replaced, they can become a burden rather than an advantage over time. This also makes them difficult to replace because the programming used to creature their customization may be difficult to translate to modern languages.

  • High Costs

There are high costs in fully replacing a legacy system. Aside from the loss of income and operational costs that will inevitably occur during such a switch over, there are also the cost of the hardware, new programming and professionals who will assist during such a transition. Companies may be unwilling to spend so much and unwisely choose to stay with their legacy systems.

The risks of using legacy systems can severely impact the potential of businesses. By holding onto old processes and software, businesses are actively leashing themselves to the past. Unlock the future of your business by embracing new technologies and looking forward instead of back.

Leave a Reply

Your email address will not be published.