Legacy technology, or legacy IT, is a key factor in preventing businesses from achieving their full potential. Despite operating in the era of digital business, many companies are still tied to their legacy IT hardware, software, and applications.
This is true for small, medium, and large businesses in almost all industries. These businesses hold on to their legacy IT for several reasons. Firstly, while their IT systems may be outdated, they are likely still getting the job done.
Secondly, their legacy IT systems may be difficult to replace due to some custom software and business applications that they use. Lastly, there are likely trying to avoid the associated risks that come with replacing legacy IT like downtime, data loss, expenses, or disruption of their existing business processes and workflows.
Whatever the reasons, these businesses do not realize the true costs and inherent business risks with legacy IT.
Let’s discuss a few of the inherent business risks with legacy IT to give you a better understanding of what your business is risking holding on to outdated IT systems.
Inherent Business Risks With Legacy IT
Here are a few inherent business risks with legacy IT that you need to be aware of.
- Increasing Costs
It may surprise you to learn that the cost of running and maintaining legacy IT far outweighs the cost of deploying relevant new technologies. This is because old, legacy IT systems require technical support for running, maintenance, and repair from experts, who are not easily available in the market.
Similarly, sourcing parts for these systems in the market is also difficult. This means that the overall operating expense of legacy IT is quite high, especially when you compare it to the more efficient and cost-effective modern alternatives in the market.
- Increasing Downtime
If you thought deploying new technologies risks downtime for your business, you probably haven’t evaluated the business downtime your legacy IT incurs. It is common for old, outdated systems to crash frequently, requiring constant support from technicians.
Broken or nonfunctioning IT systems bring more downtime and expenses for your business. Additionally, since parts and technicians for legacy IT does not come easy, you incur even more downtime to find experts and source parts.
Most importantly, legacy IT systems use resources that would otherwise be better spent elsewhere. Think about the IT technicians who are regularly maintaining these systems. You could better utilize them in other areas that improve business efficiency or bring more opportunities.
Similarly, when there is a constant looming threat system failure and downtime, it is difficult for your teams to remain efficient and productive. Legacy IT failure and downtime create a domino effect that goes all the way down to your customers.
- Security Risks
Legacy IT is highly vulnerable to cyber attacks and breaches. This is because they lack manufacturer and vendor support in the form of updates and upgrades. These systems do not get firmware, software, or OS updates, making them vulnerable.
These security risks could result in malware, data loss, ransomware, DoS attacks, and many such cyber threats. Data breaches, in particular, can cost a company millions of dollars if it doesn’t cripple them entirely.
Imagine a business losing all its sensitive customer data. It would be nearly impossible for them to recover and rebuild the trust of their customers, especially in competitive markets where there are plenty of alternatives for your customers.
Moreover, legacy IT can compound serious repercussions for businesses that operate under stringent regulatory compliance requirements like HIPAA, SOX, and PCI. Such businesses need technologies that are updated and supported.
Otherwise, audits become far more difficult and expensive, and any security breach would incur costly penalties.
- System Incompatibility and Lack of Tech Integrations
Legacy IT is incompatible with newer technologies, which is bad for business in many ways. While your competitors enjoy speed, efficiency, convenience, security, and growth that comes with newer, compatible systems, you risk losing your existing customer base.
The lack of tech integrations will result in your business not being able to meet market demands and expectations, forcing your customers to look elsewhere for solutions.
- Diminishing Talent Pools
Unsupported and outdated legacy IT means fewer professionals in the market know how to operate and use them. This means that these professionals are difficult to come by and become more expensive due to scarcity.
Alternatively, you could hire professionals and teach them how to use your legacy IT systems. However, such an approach has many pitfalls that are not worth the risk. So, while your talent pool is diminishing, competitors with up-to-date IT get to enjoy a larger talent pool with less expensive professionals.
- Increased Time-to-Market (TTM)
All businesses understand the importance of time-to-market or TTM. If your fresh, innovative product isn’t completed and delivered on time, you lose the first-mover advantage to gain customer confidence and hence a larger market share.
Even if your product isn’t the first of its kind or an innovative solution, a high TTM means you are leaving money on the table. The slowdown that comes with legacy IT can negatively impact your TTM, compounding loss of valuable business and market share.
- Competitive Disadvantages
Legacy IT limits your business’ capabilities and potential in many different ways. While competitors (even smaller ones) are taking advantage of cloud services, automations, IoT, data tools, and agility, your legacy IT is slowing business processes, workflows, efficiency, productivity, and innovation.
This makes it very difficult to remain relevant and competitive when customers have other much faster, more efficient, and practically seamless products and services available in the market.
Conclusion to Inherent Business Risks With Legacy IT
These are just a few inherent business risks that come with legacy IT, and there are plenty more, like data inconsistencies, lack of business flexibility, adaptability, and more which we can discuss another time.
For now, you know enough to understand how legacy IT holds back businesses in the modern era of digital business. Businesses need to realize that legacy IT costs them far more than any investment in newer business technologies.
Today, cloud solutions like software as a service, platform as a service, and infrastructure as a service are enabling even the smallest of businesses to compete with industry giants. Technological advancements are quick, and every modern business faces the risk of bringing change to its systems, operations, and way of doing business.
However, not changing and adapting is far riskier as it prevents your business from growing, scaling, and innovating. So, legacy IT has no place in the modern and competitive digital business landscape, even if it is currently “getting the job done.”
We highly recommend that you assess the consequences of your legacy IT and start implementing IT solutions that bring relevant and positive changes. If you want to learn more or start deploying efficient, cost-effective, and modern IT systems for your business, you should get in touch with Cloud Computing Technologies today!
Further blogs within this Inherent Business Risks With Legacy IT category.