Too much, too old, too hidden: Why your legacy systems are dragging you down
Growing companies tend to have multiple software systems in place. Systems that may have seemed like a good idea when the business was smaller, or were bought to ‘tide us over’ are still in place – often one system for each department or process.
It will be no surprise to anyone that technology, in particular software, has moved at a rapid pace over the last 10 years. The result is we have been classifying software which is older than 10, and even five years into a bucket called ‘legacy systems’.
The trouble with legacy systems is that, in the end, they cost too much money. They are inefficient, expensive to maintain, they don’t talk to each other, they are no longer fit for their original purpose, and they can’t scale up as the business grows. The cost of this is much more than you may think – legacy systems can cause a whole host of issues:
No upgrades – many systems are coming – or have come – to the end of their life. The underlying technology is outdated. There are no upgrades and only limited support. So you are stuck with the current capabilities with no real way of moving on.
Licence expenses – if you run 25 systems across your business, you’re paying for 25 different licences. They’re all due for renewal at different times, they apply different pricing models and require payment in different ways. Administration alone becomes a significant cost.
Too many vendors – dealing with a large number of vendors is also time-consuming and expensive. Each system will have its own support options or packages with different methods of delivering support and different ways of charging for it. Each vendor will pass the buck when there are issues. Again, managing this can be a full-time job.
Data equity – older systems were not built to work with one another, so it’s likely that each of your legacy systems stands alone. They will collect, store and report data in different ways, and so there will be no data equity or visibility across your business, making decision making and planning based on reliable data extremely difficult. Worse still, there could be errors in critical processes such as billing.
Training issues – what happens when people need training on older systems? Do you rely on existing staff to manage this? Is there any support from the software vendor? If people don’t understand how to use the system, it has limited use.
Making a business case for a single solution
All of the above factors contribute to a huge total cost of ownership. When you consider what your costs are in terms of both the visible costs and the invisible costs caused by general inefficiency, you can see how legacy systems can have a significant impact on your bottom line.
And it’s not just your profits – it’s your ability to compete for new business. Large and complex tenders require you to prove that you have robust, up-to-date and integrated systems in place. In many cases, bidders will need to have technology that can integrate with the tenderer’s systems. Waste management and recycling companies who are limping along with old, clunky, standalone systems are unlikely to make the grade.
So, a single solution is likely to be more affordable to buy, more affordable to run and helps organisations to get clear visibility over all their processes. It delivers a competitive edge, allowing businesses to take on and deliver complex contracts. And it reduces the overall cost per transaction, making an immediate difference to the bottom line.
Put simply, integrated systems give you more power. They deliver better information and that helps you to make better decisions, provide better customer service and aids strategic planning.
Act before you reach a tipping point
It’s a common scenario – the CIO has been talking for a while about how legacy systems are holding the organisation back. Some can’t be upgraded, some are producing the wrong information, others give no visibility. Many need manual checking which means you’re paying twice for the same information.
All of a sudden, a tender appears, or a competitor is looking for acquisitions, or one system is likely to fail – and there’s your tipping point. Rather than having the time to plan, cost and test a new solution, there’s an emergency need to get things done.
This is unlikely to result in the overall result you want for your business. Before you get to this point, do a serious review of the systems you currently have in place, and run a cost-benefit analysis so you have a clear picture of the costs and efficiencies of those systems. This is especially important if you need to support a growth strategy – you can’t grow properly without integrated systems in place.
It’s time to think differently – to look at the wider strategic picture for your business and to realise the difficulties that legacy systems could be causing. Seeing the bigger picture allows you to start a conversation about how you could do things better.
We can help you have that conversation, and we can support you when you move from old, expensive legacy systems to a reliable, single system that can power every aspect of your business. To find out more, contact us today.