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Updating Legacy Systems: Making the Financial Case for a Modernization Project

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Most people associate the term “legacy system” with old code, but a true legacy system is any application that is difficult to update. A two-year-old app can already be in a legacy state if it’s unscalable.

Many companies put off updating a legacy system, even when they accept its limitations. It can be a hard sell to replace functioning systems, but the longer it is put off, the more expensive it ultimately becomes.

This deck outlines the financial reasons for updating a legacy system.

Published in: Software
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Updating Legacy Systems: Making the Financial Case for a Modernization Project

  1. 1. (952) 960-2220 | ilmservice.com Updating Legacy Systems Making the Financial Case for a Modernization Project
  2. 2. Overview Age Is Just a Number Most people associate the term “legacy system” with old code, but a true legacy system is any application that is difficult to update. A two-year-old app can already be in a legacy state if it’s unscalable. Here are some signs you are working with a legacy system: 1 Aging Infrastructure How easy it is to purchase replacement parts? 2 Obsolete programming language Do new developers know your tech stack? 3 No vendor support Have vendors stopped supporting the applications you use? 4 Disproportionate cost Has it become more expensive to maintain your legacy system than it would be to replace it? (952) 960-2220 | ilmservice.com
  3. 3. Topics Making the Financial Case for a Modernization Project Many companies put off updating a legacy system, even when they accept its limitations. It can be a hard sell to replace functioning systems, but the longer it is put off, the more expensive it ultimately becomes. There are important financial reasons you should update a legacy system, including: 1 Replace Before It’s a Liability 2 Business Needs Change 3 Reduce Long-Term Costs 4 Integration Means Better Data 5 Increase Efficiency with Mobile 6 Improve Employee Recruitment & Retention 7 Build Tech Wealth (952) 960-2220 | ilmservice.com
  4. 4. 1 Replace Before It’s a Liability Legacy systems make your company more vulnerable to malicious attacks. Unpatched or unsupported software, hardcoded passwords, and no budget for upgrades all make legacy systems vulnerable. Depending on the age of a company’s system, it is possible a company may be unaware it is operating with unpatched software or hard- coded passwords, providing an entrance point for hackers. A security breach can impact your company’s bottom line. Depending on the scale and scope of the breach, you could lose customers, partners, licenses, or contracts. (952) 960-2220 | ilmservice.com
  5. 5. 2 Business Needs Change If you chose an enterprise solution five years ago, your business needs may have already changed. A company merger might force changes, new compliance measures could force new application features, or maybe your current system is so outdated that people have created work-arounds that the system cannot support longterm. Whatever the situation is, if your system cannot be updated to meet your current business needs, then it’s time to replace it. (952) 960-2220 | ilmservice.com
  6. 6. 3 Reduce Long-Term Costs It is expensive to operate and maintain legacy systems. Your non-technical employees spend more time interacting with older systems because the interface is clunky and the system is full of bugs, and your IT staff spends a large portion of their time fixing bugs and maintaining the system. The time spent interacting with the system cuts down on overall productivity, which costs your company money. Would you rather have your developers writing new product enhancements or fixing bugs? The sooner you replace outdated tech, the easier and less expensive it will be for the transition. If possible, assign a dollar value to maintaining your current system versus replacing with a modern system, taking into account all of the risks and benefits. (952) 960-2220 | ilmservice.com
  7. 7. 4 Integration Means Better Data Businesses that evolve their systems with siloed applications will eventually find themselves dealing with poorly planned architecture that prevents efficient scaling. IT staff spend a large amount of time supporting one-off applications that do not integrate with each other, often duplicating data and holding it in separate systems. This tangled web of siloed business software systems inhibits flexibility, productivity, and slows down company growth. Integrated IT systems increase visibility across the organization by providing a uniform data pool across departments, saving time and money for IT support, and spurring growth through customer loyalty and new customer acquisition. (952) 960-2220 | ilmservice.com
  8. 8. 5 Increase Efficiency with Mobile Your staff is on the move, and they carry mobile devices. If your system can not be accessed from mobile devices, including smartphones and tablets, then you team is not as productive as they could be. To maximize the productivity of team members working in the field, they should be constantly connected to your system with real-time data and reporting features. Cloud services make mobile connectivity an affordable option for companies of all sizes. (952) 960-2220 | ilmservice.com
  9. 9. 6 Improve Employee Recruitment & Retention It is difficult to recruit developers to work on older technologies. Most likely, new developers will not be trained on the older tech your system is using. Developers want to grow their skills and not get stuck working on old tech, which can lead to skills atrophy. The older your tech stack, the harder it is to find developers with the skills and the desire to work on it. Even non-technical people want to work with the latest applications because they are user-friendly, fast, and integrate with other applications. To recruit and retain the best talent across your organization, invest in updating your enterprise systems. (952) 960-2220 | ilmservice.com
  10. 10. 7 Build Technical Wealth When you decide to replace your legacy system, plan the replacement project carefully to build technical wealth, not technical debt. Invest in your team and plan for appropriate training. You may need to augment your current team with developers with experience in the new technologies or outsource some of the modernization project with highly-skilled consultants. While building your new system, take steps to ensure clearly written code, include good documentation, build and run automated tests, and design the system for integration. (952) 960-2220 | ilmservice.com
  11. 11. Next Steps Choosing A Development Partner When you’re ready to outsource a development project, you should carefully review all of the short and long-term impacts for your company before choosing a partner. You will be working with the code for several years, so be sure you are happy with the finished product. Let’s Talk ILM Professional Services provides expert development advice to companies in Minnesota. We can help you with a variety of development initiatives, from an architectural review to a full strategy design and application launch. Visit ilmservice.com or call (952) 960-2220 to learn how we use development to drive business innovation. (952) 960-2220 | ilmservice.com
  12. 12. (952) 960-2220 | ilmservice.com (952) 960-2220 | ilmservice.com

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