In the dynamic landscape of modern business, the strategic integration of technology is pivotal for success. As we approach 2024, the role of business technology is more critical than ever, dictating an organization’s ability to adapt, innovate, and outpace the competition. However, many business owners still find themselves tethered to legacy systems, once stalwarts of reliability that have now become potential barriers to growth and success.
Understanding Legacy Systems: Beyond Outdated Tech
Legacy systems, reminiscent of a familiar but aging t-shirt, may seem reliable, having faithfully served businesses over the years. However, much like that beloved shirt, these systems can wear out, fade, and ultimately hinder progress. In the realm of business technology, a legacy system refers to outdated hardware or software that an organization still utilizes. However, a legacy system isn’t necessarily one that has ceased to function. Rather, it lacks scalability and inhibits the organization’s ability to adapt to new challenges effectively. While sticking with legacy systems might seem cost-effective and convenient, the hidden costs associated with maintaining such systems can be staggering.
The Financial Burden of Legacy Systems: A Strain on Resources
Legacy systems, while serving certain purposes, impose a significant financial burden on businesses. The need for continuous support, troubleshooting, and adaptation incurs substantial costs, akin to maintaining an aging vehicle. Approximately 75 percent of the $35 trillion spent on business technology since 2010 has been directed towards maintaining existing systems, hindering innovation and growth.
The true cost of poor performance associated with legacy systems extends beyond finances. Slow software, outdated hardware, and compatibility issues impact productivity, especially in today’s mobile-driven world. The scarcity of skilled professionals adds complexity, resulting in prolonged downtimes, increased error vulnerability, and a decline in system reliability. Legacy systems also exhibit rigidity, impeding adaptability in dynamic business environments, limiting the ability to respond quickly to market changes and stay competitive.
Security Risks: A Looming Threat
One of the most pressing issues associated with legacy systems is their vulnerability to cyber-attacks. Outdated software and hardware are more susceptible to security breaches, making them attractive targets for malicious actors. As cyber threats continue to evolve, legacy systems become increasingly challenging to secure, putting sensitive business functions and data at risk in real-time.
A glaring example of the security risks posed by legacy systems is the WannaCry ransomware attack in 2017. The attack exploited a vulnerability in the Server Message Block (SMB) protocol, affecting systems running older and unsupported versions of Windows. Many organizations in healthcare, finance, and manufacturing, relying on legacy software and outdated operating systems, faced severe disruptions.
Why Modernization is Imperative: Adapting to Change
In the face of these challenges, business leaders must consider modernization as an imperative step to adapt, thrive, and maintain a competitive edge. Modernization involves upgrading or replacing outdated software and hardware systems within an organization. It’s a strategic move to align business technology infrastructure with contemporary needs and ensure that businesses can navigate the evolving digital landscape effectively.
Here’s a short video of Nerds Support securing and configuring some internet switches for one of our clients to replace their outdated internet technology!
Prioritizing the modernization of specific legacy systems is crucial for the success of businesses in 2024. Your goal should be to rid your business of the limitations of outdated systems and guide your clients toward success. Here are some key legacy systems that businesses should consider modernizing:
1. Business-Critical Backbones:
- On-premise ERP and CRM systems: These traditional platforms often lack scalability, integration, and mobile accessibility. Transitioning to cloud-based ERP and CRM solutions can offer enhanced flexibility, improved user experiences and data analytics.
- Aging data center infrastructure: Outdated servers, storage, and networking equipment are not only inefficient but also vulnerable to security breaches. Migrating to the cloud or modernizing on-premises hardware can drastically improve performance, security, and scalability.
- Mainframes and legacy databases: While these systems might still function, they come with high costs, require specialized skills, and limit integration with newer technologies. Modernizing databases to cloud-based or relational alternatives can save costs, improve agility, and unlock valuable data insights.
2. User-Facing Applications:
- Desktop-only Applications: In a mobile-first world, applications confined to desktops hinder productivity and employee satisfaction. Shifting to web-based or mobile-friendly versions can empower the workforce to work anywhere, anytime.
- Custom-built, monolithic Applications: These bespoke codebases are often expensive to maintain, difficult to update, and lack readily available support. Replacing your business technology with modular, cloud-based solutions offering pre-built functionalities can streamline development, maintenance, and scalability.
- Outdated Collaboration Tools: Email-centric communication and on-premise file servers are inefficient and siloed. Modern cloud-based collaboration platforms like Microsoft Teams or Slack can boost communication, document sharing, and project management.
3. Security and Compliance:
- Legacy Security Solutions: Antivirus and firewall technologies of yesteryear struggle to keep pace with evolving cyber threats. Implementing next-generation endpoint protection and cloud-based security solutions can provide comprehensive protection against sophisticated attacks.
- Manual Compliance Processes: Manual compliance assessments and reporting are not only error-prone but also time-consuming and costly. Automated compliance tools can streamline the process, reduce risk, and demonstrate regulatory adherence.
The Mobile Dilemma and Legacy Systems
Legacy software’s lack of compatibility with mobile apps is also a significant hindrance. Modern businesses are adapting to better suit mobile devices, enabling employees to access apps on the go, significantly improving operations management and productivity. Meanwhile, those tethered to legacy equipment find themselves isolated from the advantages of mobile accessibility.
The global shift to remote work during the 2020 pandemic exposed the limitations of legacy systems. Business applications operating on outdated infrastructure struggled to adapt, unable to provide the flexibility and remote access required during the crisis. The lesson learned was clear: businesses need systems that can operate seamlessly under any circumstance.
Evaluating Change in the Business Landscape
Even if a legacy system currently meets business technology needs, it’s essential to consider how the industry is changing. Anticipating customer needs and ensuring an innovative strategy is in place are paramount. Companies like Capital One, Amazon, Netflix, and Google have reshaped their respective industries by redefining customer experiences through embracing modern technologies like cloud computing.
The adaptability lesson became particularly evident during the 2020 pandemic. Businesses that had deferred cloud migration were forced to incorporate it quickly to stay afloat. Those best positioned to thrive during the crisis had the business technology required to adapt rapidly. Cloud computing, remote-capable infrastructures, robotics, and online commerce emerged as crucial technologies that helped businesses stay open.
Moreover, as we move into 2024, the rise of artificial intelligence (AI) is an undeniable force reshaping the business landscape as we know it. AI applications offer unparalleled opportunities for efficiency, innovation, and data-driven decision-making. However, the integration of AI requires careful consideration of data security. Businesses must not only adapt to AI but also implement robust cybersecurity measures to safeguard sensitive information. This involves deploying advanced encryption, access controls, and continuous monitoring to ensure that the benefits of AI can be harnessed without compromising data integrity and confidentiality. The intersection of AI and cybersecurity is a critical aspect of modernizing business technology securely in the evolving digital era.
The Role of an MSP in Modernization
For older businesses with a plethora of important data, a gradual approach to cloud adoption is often preferred. Organizations can transition slowly to the cloud through a hybrid Co-management solution. This allows them to retain their existing IT team while utilizing a managed services provider (MSP) as a backup. MSPs can add much-needed structure and organization to new IT systems, offering IT consulting services to help businesses develop detailed plans for the application of cloud technology.
As businesses navigate the complexities of modernization, MSP will play a pivotal role in offering tailored solutions to adapt to those new technologies. By proactively recommending critical upgrades, MSPs position themselves as trusted advisors, helping clients avoid future challenges, and enabling them to fully embrace digital potential in 2024 and beyond.
You can check out our latest blogs if you want to know if your business is ready for an MSP.
How to Make the Transition
Legacy systems, while comfortable and familiar, act as a stranglehold on a business’s potential. The reluctance to part with outdated business technology comes at a significant cost — financially, operationally, and competitively. The key to thriving in 2024 is a strategic modernization approach that addresses specific pain points, embraces new technologies, and positions businesses for long-term success in a dynamic digital landscape.
Partner with an MSP like Nerds Support, with over 20 years of expertise utilizing new technologies, to unlock your business’s true potential. Contact us today to see if we’re a good fit to become to your dedicated ally in the journey to digital excellence in 2024 and beyond!