Replacing vs. maintaining legacy systems

Despite the need to modernize and digitally transform, organizations may opt to maintain legacy systems for several reasons, according to experts.

First, there are cost considerations. It’s true that upgrading to new technologies generally brings business value — i.e., increased revenue and/or lower operating costs. However, the cost of upgrading can sometimes exceed the business value, at least in the short run. That, in turn, can incent some companies to stick with what they have.

Lapierre said that’s especially true if the existing system is particularly cost-effective and still performing adequately.

“Older systems may be cost-efficient in managing current business requirements; they are already paid for and require no additional cost outlay beyond current support costs,” she explained.

Reliability can be a factor, too. “Unless the driver to modernize is due to reliability factors — versus functionality [and] technical factors — chances are the legacy application is reliable in how it supports the business needs today,” Lapierre said.

Familiarity can also factor into the decision to continue maintaining a legacy system.

“Technically, the legacy system is likely fully integrated up and downstream with the rest of the application architecture and business functions,” Lapierre said. “It’s what the business uses today, is familiar with, and all supporting processes are already in place.”

Simon Ratcliffe, a principal consultant in advisory at Ensono, an IT service management company, agreed — adding that organizations should not automatically assume that all older technology needs to be replaced.

“If the business process [it supports] is still valid, then it’s not a legacy system,” Ratcliffe said.

Ratcliffe cited one of his use cases, a grocery store chain that continues to use a mainframe to handle financial transactions. The technology is decades old but still works efficiently, quickly and securely — delivering the exact functionality that the company needs to process transactions.

“It’s the same type of processing they’ve been using for 30 years. And that doesn’t need to change. What needed to change was the access to it,” Ratcliffe said.

He explained that the company decided to maintain its mainframe instead of replacing it, but has added layers of technology around it to integrate the newer functionalities it needs to meet modern customer demands.