What is a legacy system?

As we head into Q3 2021, digital transformation is more important than ever. Currently, 70% of businesses have a digital transformation strategy, and 55% of startups have already adopted one. During the height of the COVID-19 pandemic, the most digitally advanced organizations successfully filled tech jobs (75%). So, as comfortable as your legacy systems appear to be, it’s time to reinvent or modernize your legacy system.

That said, how should you go about it?

For centuries, people used the term “legacy” to refer to items of value handed down from generation to generation.  However, in the IT world, the term carries a negative connotation, conjuring up images of outdated, underperforming systems that struggle to retain their relevance in a digital-first marketplace. In this era of accelerated growth, organizations are discovering that their once efficient systems are now unable to meet their business objectives.

What Is a Legacy System?

Legacy systems are defined as those that rely on older or obsolete technology. This includes not only outdated computer hardware but also programming languages and software applications that can no longer support an organization’s technology needs. The criteria given below serve as a checklist for determining what a legacy system is.

• A system unable to support an organization’s software needs
• The requirement of personnel with archaic technology skill sets
• Excessive costs associated with maintenance
• Substantially decreased system performance
• Cost-prohibitive to upgrade
• Inability to handle the required number of users simultaneously

Legacy Hardware

The underlying hardware of a legacy system generally runs older applications and operating systems due to their limited memory and processing power. Examples of these components include the following:

• Mainframe Computers
  These massive, powerful systems are mainly used by large organizations such as banks, insurance companies, credit card companies, universities, and government agencies. The high cost of migration and likelihood of service interruptions are why many organizations continue to retain their legacy infrastructure.
• Older Personal Computers.
  Computers using older Central Processing Units (CPUs) with 32-bit architecture that limits the amount of memory they utilize. Outdated systems utilizing pre-USB ports such as parallel ports or PS/2 ports. Obsolete processing systems such as Pentium II.
• Outdated Network Equipment
  Obsolete network devices that are no longer supported for standards such as 802.11b WiFi.

What is Legacy Software?

Legacy software systems are also responsible for costly delays and disruptions. Maintaining legacy software can expose organizations to data breaches due to outdated security measures, performance issues, and non-compliance to security standards.  To determine exactly what legacy software is, consider the following conditions:

• Older software supported with feature updates but no security patches
• A platform incompatible with new systems and drivers
• Software that’s non-compliant with recent standards
• Software that requires new updates to be functional

Examples of Legacy Software

• Microsoft Windows 7: Windows 7 officially became a legacy operating system in January 2020 after Microsoft halted security updates and support for it. However, over 100 million machines continue to run this operating system.
• COBOL: Common Business-Oriented Language or COBOL is still used 55 years after its development. Forty-eight percent of businesses and government organizations reportedly depend on this language more than others.
• Discontinued Oracle products: Oracle database software such as E-Business Suite and Peoplesoft.

Legacy Systems Versus Modern ERP Systems

Enterprise resource systems (ERPs) are especially affected by outdated software and hardware components. While companies strive to retain their competitive edge, their legacy ERP systems hold them back from achieving continued growth and profitability. Legacy ERP systems are unable to keep pace with evolving supply chains and rapid product launches.

The major difference between legacy ERP and modernized systems is in their deployment. Legacy systems use company-owned, on-premise computers and servers. This results in limited access since users must be at the location to use the system or any specialized software applications.

Essentially, companies retain sole responsibility for maintaining legacy ERPs. Ensuring data safety and integrity requires resources that can substantially detract from revenue earnings, however. In addition, expanding the system as the company grows may be cost-prohibitive.

On the other hand, modernized ERP systems exist on Software-as-a-Service (SasS) platforms, meaning a subscription fee covers all software rights. Thus, businesses can access the applications anytime, anywhere, and on any device.

The cloud vendor prevents unauthorized access to data with strong encryption tools. Unlike legacy systems, modernized cloud systems facilitate scalability and agility. In addition, any hardware or software upgrades are handled by the provider.

Why Do Businesses Continue to Use Legacy Systems?

Despite their inefficiency and high costs of maintenance, many governmental systems around the world still use outdated software. In fact, countries that use legacy systems admit that the software has even exceeded its end-of-life date. Recently, the inability of state unemployment servers to keep up with application demands highlighted the difficulties of maintaining legacy platforms. Compounding the problem was the lack of COBOL programmers to maintain the legacy on-premise infrastructure.

In addition, a June 2019 report by the U.S. General Accountability Office revealed ten critical legacy systems in need of modernization. Meanwhile, many retail, ecommerce, and manufacturing companies still rely on legacy systems. Common reasons for not modernizing include:

• The lack of financial resources to support the transition
• The fear of major disruption to the business during the modernization
• A lack of ability to retrain staff and prevent service delays
• The overwhelming prospect of upgrading an unwieldy system

The Challenges Posed by Legacy Systems in the Modern Marketplace

Healthcare facilities, in particular, often hesitate to modernize due to the possibility of costly interruptions that can affect patient care. A 2019 ProPublica study showed that healthcare legacy systems put the medical data of over five million patients in jeopardy since they can be easily hacked online.

A spokeswoman for the U.S. Department of Health and Human Services admits that the facilities are applying “bandaids” in an attempt to thwart devastating data breaches.

The recent Colonial pipeline system hack that brought down a critical fuel pipeline constitutes another prime example of the challenges legacy systems present. The costly breach caused by a ransomware hack resulted in the company having to pay a $5 million ransom to restart the system.

While these companies prefer staying with legacy systems, the risks will continue to affect their bottom lines, making legacy system modernization an inevitable choice down the road.

Legacy System Conversion Planning

Research firm, Gartner, details how organizations should strategize their plan for the conversion in a three-step evaluation process.

1. Evaluate the legacy system’s architecture, functionality, complexity, and risk. Applications no longer providing value to the company, are unable to keep pace with digital business demands, and are too costly to maintain, are modernization candidates.
2. Evaluate options to the modernization process. These include extending application features as APIs, rehosting to other infrastructures, migrating to new runtime platforms, restructuring and optimizing code, or rewriting or replacing the applications altogether.
3. Choose the modernization option that will benefit the company the most in terms of architecture, functionality, and cost.

What It Takes to Modernize Your Legacy System

Enterprises that choose to upgrade their legacy systems should do so with reputable providers offering application modernization services. This process uses the following steps:

1. Evaluation of the current legacy system to determine which components to eliminate.
2. Evaluation of project goals and resource requirements including application source code and data conversion milestones.
3. Rewriting and restructuring of applications as well as staff retraining.
4. Implementation of the modernized application with verification of functionality, scalability, and reliability.

Top Legacy System Modernization Trends

Aside from migrating to the cloud, important tools to modernize legacy systems and increase an organization’s operational efficiency include:

• Automation
  Legacy systems often lack automation in many areas. By automating repetitive tasks, human errors and operational costs can be eliminated.
• DevOps
  DevOps consultants and engineers can assist in selecting the most efficient services to use. The DevOps approach to programming results in increased ROI with faster delivery times.
• Container-Based Applications
  Using containers in the migration process allows applications to be easily moved between infrastructures with minimal code changes.
• Microservice Architecture
  This approach uses separate codebases for each service. It enables the deployment of a service without the expense of rebuilding the entire application.

Work With Entrance Consulting to Modernize Your Legacy System

Legacy systems still used by many governments and private entities carry substantial maintenance costs and present increased security risks. This was made evident by the bottlenecks observed in state unemployment systems as well as the Colonial fuel pipeline shutdown.

As digital transformation continues to accelerate across every industry, businesses must keep pace or face mounting costs from operational slowdowns. Fortunately, there are several legacy system modernization approaches which will result in greater efficiency and profitability.

Entrance Consulting, the number one most trusted custom software company in North America, can improve your productivity rates with legacy software and application modernization. Contact us, and schedule a consultation to learn how our team can help modernize your legacy system today!