In 2022, Intoware reported that 74% of manufacturing and engineering companies still depend on legacy systems. These outdated technologies may have been revolutionary when introduced, but as time passes and updates cease, they become a hindrance rather than a help.

You might assume these legacy applications still get the job done, but the reality is different. In a fast-paced world where speed, flexibility, and security are paramount, clinging to obsolete systems doesn’t align with the needs of modern businesses. If your company leans too heavily on legacy IT, you’re not alone.

According to a 2020 IDC study on legacy application modernization, 52% of enterprise technology is legacy-based, and most of it remains outdated. This means many businesses are inadvertently hampering their business growth.

This blog dives into what legacy systems are and highlights how they can hold your business back.

What Is a Legacy System?

Gartner defines a legacy system as an “information system based on outdated technologies but critical to day-to-day operations.” These systems are deeply embedded in business workflows but lack the modernization needed to thrive in today’s tech-driven landscape.

Simply put, while legacy IT might have served you well in the past, it isn’t equipped to drive your business into the future.

How Do Legacy Systems Impact Your Business?

1. Rising Costs

One of the biggest misconceptions about upgrading technology is that it’s too expensive. But have you considered the hidden costs of sticking with legacy IT? Continuing to maintain outdated systems often costs more in the long run than investing in digital transformation and legacy systems updates.

Research shows U.S. businesses lose up to $1.8 trillion annually in productivity due to obsolete technology. These costs come from:

> Constantly fixing issues with outdated tools

> Spending on system upkeep

> Wasting resources on employee downtime caused by inefficiencies

2. Wasted IT Resources

Legacy systems also drain your IT team’s time and energy. On average, an employee loses 46 minutes daily due to inefficient systems. Over a year, this adds up to a financial loss of nearly $3,500 per employee. Rather than focusing on innovation or strategic projects, IT teams end up patching and maintaining systems that no longer meet business needs.

Furthermore, legacy infrastructure maintenance often demands specialized skills and knowledge that are increasingly rare. While your current team may possess the expertise to manage these systems, what happens if key personnel leave?

In today’s competitive job market, where there’s already a shortage of tech talent. Finding professionals willing and able to work with outdated technology is an even bigger challenge. This leaves businesses struggling to maintain legacy systems while facing significant gaps in their IT resources.

3.Increased Security Risks

As legacy systems age, security updates become less frequent or stop entirely, leaving your business vulnerable to breaches. Hackers constantly evolve their methods, and outdated tech stacks can’t keep up. Alarmingly, 74% of businesses experiencing breaches attribute them to unsecured third-party access—often linked to legacy IT.

Regularly evaluating your technology is essential to protect your business from these risks. Modernizing your systems ensures you stay ahead of emerging threats and maintain robust defenses.

4. Poor Employee Experience

Outdated tools don’t just impact efficiency—they also affect employee satisfaction. Working with clunky, slow systems can frustrate your team, leading to higher turnover rates.

Here are some statistics:

> 52% of workers report dissatisfaction due to mismatched or missing software.

> 24% have considered leaving their jobs because they didn’t have the right tools.

> 13% actually left a job because of outdated software.

Losing talented employees due to outdated technology is a cost no business can afford. Upgrading to modern systems improves productivity and creates a positive work environment that retains top talent.

Driving Factors For Modernizing Legacy Systems

Modernizing legacy systems is no longer just an option—it’s a strategic necessity for businesses aiming to stay competitive in today’s fast-paced digital landscape. From boosting operational efficiency to meeting regulatory requirements, modernization offers numerous benefits that drive growth and innovation. Below are some key factors motivating organizations to embrace legacy system modernization.

Source – Statista

How to Know When It’s Time to Modernize Your Legacy Systems?

If you’re wondering whether it’s time for legacy application modernization, consider the following checklist. These signs indicate your business may need an IT overhaul:

> Competitors’ systems outperform your software.

> Limited scalability restricts alignment with business goals.

> Difficulty finding developers skilled in maintaining outdated systems.

> Growing IT backlog despite team expansion.

> Delays in developing new features.

> Increased time spent on maintenance instead of innovation.

> Rising infrastructure costs.

If several of these points resonate with your business, it’s time to take action. A strategic modernization plan can enhance your business agility, security, and efficiency.

Legacy System Migration Trends

The rapid evolution of technology strategies has made it essential for businesses to stay ahead of the curve.

According to IDC’s Futurescape Digital Infrastructure 2023 Predictions, by 2027, AI-enabled automation is expected to reduce the need for human intervention in digital infrastructure management by 70%, ensuring consistent configuration, performance, cost-efficiency, and security. This trend highlights the growing importance of adopting AI in legacy system modernization, enabling businesses to replace outdated systems with AI-friendly solutions that significantly reduce employee workload.

Approaches to Modernizing Legacy Systems

When embarking on legacy application modernization, businesses typically choose one of three paths: replacement, re-architecting, or rebuilding. Let’s explore each option to determine which is best for your business.

1.Legacy System Replacement

This involves replacing your outdated system with customizable off-the-shelf (COTS) software. It’s a fast solution requiring minimal development effort, making it appealing for businesses looking for quick results.

Pros:

Quick implementation with minimal downtime.

Security and performance are managed by the COTS provider.

Cons:

Limited customization; may not address specific business needs.

Requires adapting your processes to the software’s design.

2. Re-architecting Legacy Systems

Re-architecting involves revamping parts of your existing system to integrate modern technologies while retaining the components that work well. This approach is ideal when you have budget or time constraints but need to make improvements.

Pros:

Modernizes without disrupting ongoing operations .

Retains existing workflows and reduces retraining needs.

Low risks compared to a full replacement.

Cons:

Postpones the need to rebuild the system entirely.

Core system limitations remain unresolved.

3. Rebuilding Legacy Systems from Scratch

The most comprehensive approach is to rebuild the system entirely. While this requires a significant investment, it offers a fully customized solution tailored to your business needs, ensuring a future-proof infrastructure.

Pros:

Creates a system designed specifically for your business.

Offers complete control over the source code.

Enables integration with advanced technologies and services.

Cons:

Requires substantial time, resources, and expertise.

Involves phased implementation to minimize disruptions.

AlignMinds: Your Partner in Modernizing Legacy Systems

Ready to embrace digital transformation? AlignMinds offers comprehensive application modernization services to help businesses transition from outdated systems to future-ready infrastructures. Whether you need to re-architect legacy systems or a complete rebuild, AlignMinds provides tailored solutions to meet your needs. As a leading product modernization company in the US and beyond, we’re here to guide you every step of the way.

Modernize your legacy systems today with AlignMinds and unlock the potential for greater efficiency, innovation, and growth.