Businesses that cling to legacy software may be unknowingly sabotaging their growth. And yeah, we get it - mission-critical system overhauls can be expensive, so many organisations choose the perceived lesser evil: persisting with legacy software that still works. But the hidden costs - not to mention the opportunity costs - associated with maintaining outdated technology can outweigh the perceived savings. In this article we’ll explore both sides of the equation, based on our decades of experience in helping enterprises modernise their tech stacks.
Did you know: 50% of companies consider rigid legacy technology as one of the challenges that impact internal cost control. Despite this self-awareness, most organisations cling to their old systems due to the high cost of transitioning to modern systems and familiarity with the old solution.
Below, we explore the multifaceted costs of legacy software and why upgrading could be the smarter choice for your business.
“If it ain’t broke…don’t you dare introduce something new that I’ll have to re-train my team on”.
— Most middle management.
1. Maintenance and Operational Costs
Legacy software often requires substantial investment to keep it operational. As it ages, finding qualified personnel to manage and troubleshoot such systems becomes increasingly challenging. Many legacy platforms operate on outdated hardware, which can be expensive to replace or repair due to a lack of spare parts and support.
On average, companies spend $30 million annually on maintaining and operating legacy systems, accounting for 60-80% of their IT budgets.
Moreover, software vendors frequently discontinue updates for older systems, leaving businesses to handle patches and security fixes themselves. This DIY approach not only consumes resources but also increases risks of error or oversight. It can also drastically increase…
2. Security Vulnerabilities
One of the most pressing issues with legacy software is its susceptibility to cyberattacks. Older systems are rarely equipped to handle modern threats like ransomware or advanced persistent threats (APTs). Without regular updates, they become an easy target for hackers looking to exploit known vulnerabilities.
In an era where data breaches can cost millions in fines, lost revenue, and reputational damage, the risks associated with outdated software are staggering. For example, a 2024 IBM Security Report revealed that the average cost of a data breach globally now exceeds $4.88 million—a price tag no business can afford to ignore.
3. Reduced Productivity
Legacy systems often lack the agility and integrations that modern software solutions provide. Employees might spend more time navigating clunky interfaces, entering duplicate data, or troubleshooting bugs instead of focusing on value-added tasks.
For example, an outdated customer relationship management (CRM) system might not integrate with newer marketing tools, forcing teams to work in silos. These inefficiencies pile up, reducing overall productivity and employee satisfaction.
4. Lack of Scalability
Modern businesses grow quickly, and legacy software may not be able to keep up with scaling demands. Whether it’s handling an influx of customers, managing large datasets, or supporting new operational needs, legacy systems can become a bottleneck.
Additionally, cloud-based solutions have set new benchmarks for scalability and accessibility. Businesses reliant on on-premise legacy systems miss out on the cost savings, collaboration opportunities, and flexibility that come with cloud adoption.
5. Missed Innovation Opportunities
Technology is advancing at an unprecedented pace, offering tools like artificial intelligence (AI), machine learning (ML), and advanced analytics to drive smarter decisions. Legacy systems rarely support such innovations, leaving businesses at a competitive disadvantage.
Consider eCommerce platforms: modern systems can integrate AI-driven recommendation engines, improving customer experience and driving sales. Companies sticking to legacy platforms risk falling behind as competitors embrace cutting-edge technology.
6. Hidden Employee Costs
The inefficiencies caused by legacy software can also lead to higher employee turnover. Frustration with outdated tools is a common reason employees leave their roles. As the Harvard Business Review highlights, workers increasingly expect their employers to provide modern, user-friendly technology.
High turnover rates add costs in terms of recruitment, onboarding, and training. Investing in updated systems can not only improve efficiency but also boost employee morale and retention.
7. Customer Experience Risks
Customers today expect fast, seamless interactions, whether online or offline. Legacy systems with slow load times, outdated interfaces, or limited functionality can frustrate users and lead them to abandon their transactions.
For example, in sectors like retail or hospitality, a sluggish point-of-sale (POS) system can mean longer checkout times and lost revenue. Modern software, designed with user experience in mind, can enhance customer satisfaction and loyalty.
The Cost-Benefit Equation: When to Upgrade
While transitioning from legacy systems involves upfront costs, the long-term benefits usually outweigh these expenses. Upgraded software brings:
- Enhanced security – Built-in safeguards against modern cyber threats.
- Improved efficiency – Faster workflows and integrations with other systems.
- Scalability – The ability to grow with your business.
- Better data insights – Advanced analytics for smarter decision-making.
Companies reluctant to upgrade often cite costs and disruption as barriers. However, delaying the inevitable migration can result in compounding costs and missed opportunities over time. In fact, 90% of IT decision-makers say legacy systems slow their digital transformation efforts.
Making the Transition: Steps to Modernisation
When considering modernising and innovating your IT, here are key steps to consider to ensure a smooth transition:
- Evaluate current pain points – Identify inefficiencies, vulnerabilities, and limitations within your system.
- Assess ROI for upgrades – Calculate potential cost savings and revenue gains from modernisation.
- Choose the right solution – Opt for scalable, cloud-based software that aligns with your business goals.
- Plan a phased implementation – Minimise disruptions by rolling out the new system in stages.
- Train your team – Invest in training to ensure smooth adoption and maximise productivity.
Successful transition involves all the stakeholders including partners, management, and employees. Work with a software and IT service like April9 to ensure the transition doesn’t impact your workflows, productivity, and performance.
Address Your Legacy Software Problems with April9
Legacy software might seem like a cost-saving solution, but the hidden expenses of maintenance, inefficiency, and missed opportunities can cripple your business in the long run. In a world where agility, innovation, and security are paramount, modernising your systems is not just a technical upgrade—it’s a strategic imperative.
Don’t let outdated technology hold you back — April9 can help your organisation to modernise your system or develop a custom software solution. This is possible with our composable software platform, Stack9, which centralises your data and offers pre-built applications for rapid development and deployment, while webhook functionality and auto-scaling applications allow you to unlock your potential and free your processes from the inefficiencies of old systems. We can support every step of your IT innovation to ensure scalable and streamlined workflows, no matter how complex or rigid.
Contact us today to discover how we can address your legacy software challenges.
