The world may apparently be upgrading at lightspeed, but it’s not going as fast or as smoothly as you may think. Digitalization and technical upgrades meet resistance everywhere, even in the business world. One way the failure to embrace new protocols and technology presents in business is a legacy system.
A legacy system is the term for any computer system, software or coding language that is already outdated. Specifically, they refer to systems that are still being used despite the availability of new and better alternatives. As recently as 2015, an astonishing 90 percent of businesses are still using legacy system.
How can these obsolete systems affect your company and why do businesses still use them? Find out the answers today.
How do Legacy Systems Affect Businesses?
Legacy systems can cause all sorts of problems for employees and employers alike. Their obsolescence poses significant hurdles that could lead to a company’s eventual decline.
Here are some of the biggest costs to using a legacy system in your company.
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Inefficient Operations
When you use a legacy system, you are missing out on all the new perks and features provided by their upgraded alternatives. A brokerage with true ECN will undoubtedly outperform a rival who isn’t using the same system just because their network is slower or less effective. Legacy systems can often be very buggy or just not have the same perks as newer version, meaning your business will be operating at a disadvantage.
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Compliance Hurdles
Various organizations and institutions often put businesses through compliance inspections. Sometimes these tests are entirely voluntary and used by companies to prove they are up to par with others in the industry. However, you my find it difficult if not impossible to pass such compliance tests if you are using a legacy system. This is because these tests usually involve checking their efficiency or security, neither of which legacy systems are particularly known for.
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Data Dangers
Data is one of the most precious assets of any business and entrusting them to legacy systems can be very risky. For one thing, you have no idea when a legacy system will finally give up. These systems do not have the same level of durability as new ones and may not be able to handle the bandwidth demanded by modern businesses. These systems may also not have access to backup protocols that automatically save your data, meaning that your information may not be spared in case of an emergency.
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Security Lapses
Hackers and other people looking to breach your security systems are a bigger risk when you are using outdated software and programming. Software developers and security experts continually update their products because computer viruses, hackers and other malware are constantly evolving as well. Your legacy system will be more open to attacks and corruption, which will significantly dampen your efficiency and the safety of your customer’s information.
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Reverse Training
Most new hires will have to be retrained with using your legacy systems, reducing their efficiency as well. Not only will learning how to use outdated systems make your employees not as effective, it can also cost you time and money. This loss is because they have to spend more time learning how to use your inefficient legacy systems than simply working with systems they are already familiar with.
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Expensive Maintenance
Legacy systems tend to break down a lot because their programming or hardware are already years past their effectivity date. The frequency of shutdowns and repairs are already expensive enough on their own, but repairing them can be even pricier. First, experts and professionals who have the training to fix your legacy systems can be far and few in between. The parts and software needed may be close to on-existent because they are no longer in use which can increase price or prolong repairs.
Why do Companies Keep Legacy Systems?
You may be wondering that if legacy systems are so disruptive and inefficient, how come so many business still use them? Here are the primary reasons companies may hang on to their legacy systems.
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Expensive Upgrades
Depending on how extensively a business uses legacy systems, it could be cripplingly expensive for them to upgrade. In this case, businesses are encouraged to upgrade their systems a large portion at a time. This will enable them to fully upgrade but with enough speed that the upgrades themselves don’t become obsolete.
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Resistance to Change
Some employees and employers may not feel comfortable changing to new systems. The comfort of a legacy system may seem more sensible, but a few training sessions and employee education can bring them around. The key to overcoming this resistance is through effective training and thorough explanations.
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Disruptive to Operations
Finally, businesses could avoid upgrading simply because the time it takes to replace a legacy system can be extremely disruptive to their operations. However, even a quick assessment of the long-term effects of legacy systems will show that a small disruption for upgrades is the better alternative.
Legacy systems are holding back so many companies. Hopefully, information like this can coax more and more business owners to change their minds and finally bring their enterprises up to speed.
