Can Legacy IT Cause a Company To Lose Competitiveness

Can Legacy IT Cause a Company To Lose Competitiveness?

IT systems are a key part of any business, large or small. From workstations and laptops to network equipment, custom software, IP solutions, business applications, databases, operating systems, and more are all important tech systems within a company.

Given enough time, every IT system eventually becomes a legacy IT system. Generally, you can refer to an IT system as “legacy IT” if:

  • It is older than a decade
  • It no longer has available support, updates, or upgrades from vendors or manufacturers.
  • It is underpowered or underperforming
  • It does not support new tech integrations
  • It has a higher cost of maintenance than modern IT systems
  • The skills or technicians required to support and maintain the system are diminished from the market
  • There are far superior solutions in the market

While these points reveal that an IT system is a legacy IT system and likely obsolete, they do not mean that it is a useless or nonfunctional system. Most businesses spend a lot of money on IT deployment, especially when customized applications, software, processes, and systems are involved.

It is possible that your legacy IT still gets the job done, is tough to replace (due to customizations), and you may not want to risk the expenses, downtime, data loss, or the status quo.

Even though the technology is rapidly advancing, you will find legacy IT systems in many places, including schools, banks, hospitals, government agencies, mass transit systems, large manufacturers, small to medium businesses, and more.

However, you may not fully realize how legacy IT causes a company to lose competitiveness in the market.

Can Legacy IT Cause a Company To Lose Competitiveness?

Yes, legacy IT causes a company to lose competitiveness in the market. Despite there being many solutions to keep legacy IT running, indefinite use of such systems damages your company’s competitiveness.

Here’s how.

  • High TTM
    Time to Market (TTM) is the amount of time it takes a product to reach completion and get delivered to the market. This can be a physical product, virtual product, or service. It starts with your idea of a product and ends with the product’s launch.

    Legacy IT can make it difficult for you to compete and remain relevant in modern markets, especially when competitors use modern, agile, and flexible systems. Slow or outdated legacy IT can increase your TTM and reduce your competitive response and chances of being first to market.

    As any business professional will tell you, this can result in a huge loss of potential revenue and market share. Your company will inadvertently give up its market share to faster, more efficient competitors.
  • Increased Security Risks
    The fast pace of technological advancement means that secure and seemingly impenetrable systems a decade ago are now unreliable against seasoned hackers and cybercriminals.

    The lack of firmware updates and security patches makes legacy IT systems prone to breaches, malware, and other cyber security risks. Your sensitive business data becomes vulnerable, leading to loss of customer trust, brand image, and ultimately, loss of business revenue.
  • Dysfunctional and Slow Business Workflows and Processes
    Legacy IT uses outdated technology, which forces your company to work within its limited parameters. If your core technologies are not efficient or fast enough, they will hurt the business processes built around them.

    If your company is regularly searching for tech workarounds to meet market demands and expectations, your existing legacy IT is causing more harm to your business workflows and processes than you think. Your business’ productivity and efficiency are continually taking hits due to the limitations of existing legacy IT.
  • High Cost of Operations and Maintenance
    It shouldn’t surprise you that older IT systems are prone to breakdowns. Additionally, it becomes more difficult to source parts and find hardware/software technicians to repair or maintain these systems as they get older. This is simply because of how much more rapidly the tech market evolves.

    The frequent breakdowns, lack of parts, and lack of professionals mean that the maintenance cost of legacy IT is higher and tends to increase over time. The operational cost of legacy IT is also higher due to the availability of more efficient systems in the market.

    Ultimately, you are spending more than competitors on operations and maintenance while getting far less in return.
  • Data Issues
    Modern businesses rely heavily on data and data analytics for their decision-making. However, legacy systems make collecting, storing, processing, and using new or relevant data difficult. It can harm the data quality, storage efficiency, processing capabilities, and overall database architecture.

    These things can result in data issues like inconsistencies and redundancies, which means less effective decision-making for your company. Competitors with better IT capabilities can easily outperform you in the markets solely due to superior data solutions.
  • Lack of Qualified Users
    Your existing legacy IT requires users who have the skills to operate these systems. As time passes, it becomes more difficult to find recruits with these outdated skills, or you have to train them extensively to be able to use your legacy IT systems.

    The shortage of legacy talent in the job markets also means that your competitors can recruit from a larger talent pool than your company can.
  • Tech Integrations and Business Flexibility
    Legacy IT software and hardware is difficult, if not impossible, to integrate with upcoming applications and technologies. So, companies using legacy IT are limited to older and outdated offerings. As the world moves towards modernization and digitization, a lack of meaningful tech integrations means that your company will fall behind in the market.

    Moreover, legacy IT also means that your company lacks the business flexibility needed to attract relevant partnerships and modern customers. In turn, your company loses business and revenue.

Conclusion to Can Legacy IT Cause a Company To Lose Competitiveness

These are just a few ways legacy IT causes a company to lose competitiveness, and there are plenty more, which we can discuss another time. For now, you must understand the true cost of your existing legacy IT.

It harms your business and market competitiveness in many ways, which is not good for your bottom line. Most importantly, however, we believe its restriction on business innovation is what may ultimately kill your competitiveness entirely.

Modernizing legacy IT systems will also improve business processes, efficiency, flexibility, and competitiveness, speed up TTM, reduce costs and security risks, enhance customer experience, and ultimately take your company to new heights.

Your company needs modern IT systems to remain competitive and unlock its true potential, so it is important to overcome the reasons that are holding you to your existing legacy IT.

If you want to learn more or take advantage of modern IT for your company, we highly recommend getting in touch with Cloud Computing Technologies today!

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