We all want business software that’s newer, faster, and more useful – more “modern,” as some may call it. But modernizing an old piece of software that your organization has relied on for many years can be difficult.
For one thing, you probably don’t want to spend money on software upgrades unnecessarily. And you probably don’t want to risk downtime of crucial systems or spend the time retraining employees in new software.
But sometimes, the cost of replacing these so-called legacy software applications is absolutely necessary.
Legacy applications are software systems that often are no longer supported by their developer and can require specialized knowledge to maintain. A typical IT environment is made up of a mix of both legacy applications and newer solutions. And the two don’t always talk to each other—which means your most important data can get stuck in an antiquated silo.
Credit: Keith Evans via wikimedia commons
Legacy applications that are 10+ years old are far more common in business than you might think. Many companies first adopted ERP systems in the 1980s or 1990s and are still using these systems. We’re working with a company right now to finally replace an antiquated Microsoft Access database that has been used for nearly 20 years.
So how do you know what to do with legacy applications? When should they be maintained? And when is it time to replace them?
Unfortunately the answer isn’t the same across the board. It really depends on the specific software and how it relates to your business’ needs and priorities, and what the costs and ROI of maintenance vs. replacement are.
However, the following six questions about the application are a good place to start making the right decision for your business:
Is it mobile friendly?
Mobile access is an increasingly significant factor for overall competitiveness. Yet, many legacy systems are not accessible on-the-go, which can perpetuate a low-efficiency environment (particularly for a sales team out in the field). By upgrading to a mobile, cloud-based system, employees can complete more tasks in more places more often.
Does it get along well with others?
If a piece of software has been around for years, your business processes have likely changed since you first got it. And the functionality needed when your software was first installed way back then may differ significantly from what’s needed for the current way you do business. That’s a problem.
But the bigger problem comes when you begin planning to use new applications in the future. If this is on the horizon, you need to consider whether your legacy application will integrate with them. If your IT vendor doesn’t have an integration solution that provides real-time (or nearly real-time) data, you may have no choice but to get rid of the legacy application that’s holding you back.
Gary Baney, chief development officer at Advanced Server Management Group, defines legacy software as “anything the new kids don’t want to play with. That’s the best technical definition, because eventually it defines sustainability, maintainability, and how much technical enthusiasm will be present in the application development process.”
There is a middle ground here. Even if your legacy application doesn’t have API saccess, at minimum you need to be able to set up an ETL (extract, transform, load) integration via CSV file.
Is it still supported?
Some legacy software is built around proprietary, outdated tools—such as a unique programming language—that only few developers still use or even understand. Others are abandoned by their creating companies in favor of newer, more popular, or more profitable products.
One term used to describe this is deprecated. This means that while the software is still available to use, it is no longer developed or supported and may be discontinued soon. Therefore, it’s no longer considered efficient or safe, and its use is discouraged. If your legacy software is in this phase, then the urgency of a replacement heightens.
You don’t want to rely on an application that few people know how to fix. Doing so makes you dependent on those one or two people, which is a significant risk to business continuity for a couple of reasons.
If the application encounters multiple problems at once, you will face a bottleneck to get fixes—slowing efficiency and customer service.
If one or two of the people who can fix the application leaves for a new job or is incapacitated by illness, you’re really up a creek in terms of finding someone who can keep your system running.
How do the costs compare?
As with any business decision, consider the financial implications of changing your legacy software system. What’s the cost of maintaining the software long-term, versus the cost of replacing it? While modernizing may be initially more expensive, overall efficiency gains may end up lowering future expenses and increasing revenue.
At Worthwhile, we typically recommend that companies look at this over a three-year period. This provides a good comparison of the initial cost of a new system against the longer-term benefits—especially if you’re still paying seat licenses for an older system.
One note: while it may be financially worthwhile to upgrade to a new solution, it is possible to spend more than is necessary.
Baney shares the following about a client that was prepared to spend $500,000 to replace a 10-year-old enterprise resource management (ERP) system: “The client wanted to add eight new types of functionality. All we really needed to do was tie handheld devices into the existing ERP database.”
Instead, Baney’s company upgraded the database and production server, add faster storage to improve the old system’s processing capacity, and put a mobile front end on it. He summed it up this way: “They’re still running the legacy app and they got everything they needed for $85,000.” (That’s less than one-fifth of the cost of replacement.)
This goes to show that replacing legacy software isn’t the only option. If you can integrate with newer systems, or add a web portal or customized reports, you can prolong the life of a legacy ERP and save some money.
How necessary is it, really?
In some cases, an obsolete system is maintained and supported simply because it provides access to data required for auditing purposes or to meet compliance regulations. Unfortunately for the business, this maintenance happens at a cost.
A solution to this problem is creating archive system that enables large volumes of information—even legacy data—to be stored and managed in a single place. This allows the old system to be switched off, eliminating all its associated costs, while keeping the archived data accessible for business needs and to meet retention and other compliance requirements.
But is it still useful?
Whether or not to keep a legacy application really just boils down to one thing: is it still useful? If it is, keep it working and find ways to extend its life. If not, move toward a replacement ASAP.
Norm Ringgold, former Head of IT Operations and Infrastructure for Stanford Linear Accelerator Center, suggests that if an existing application continues to accommodate business requirements, and the complete platform, licensing, service, and support continues to offer value, why change?
“I usually don’t suggest an application solution change unless a value-based business driver or a technology emergency warrants it. In many cases, an application lifecycle is determined by some sort of significant event such as a merger or acquisition,” Ringgold said.
We here at Worthwhile agree. The ultimate answer about replacement relies on ROI.
* What efficiency are you creating?
* What risk are you eliminating?
* What new customers will you be able to serve, and what value will those customers bring to your business?
* How much do you need to spend before you will see real financial benefit?
All this leaves you with more questions than answers. But we have good news: These are the right questions. They’ll help you get to the right, customized answer for your particular business.