The Digital Legacy: Yesterday's IT Systems
December 3, 2024 / Turbine Kreuzberg
Nearly half of all companies rely on legacy software for critical business operations. How companies balance tried-and-true technology with the need for innovation.
It's a typical Tuesday morning at the headquarters of a mid-sized engineering firm. Annika, a newly appointed IT project manager, stands in front of a flickering screen. Green text on a black background—a sight that takes her back to her college days. But this isn't a nostalgic trip; it's a harsh reality: the core of the company's IT system dates back to when “Friends” was still on TV and the internet was in its infancy.
“Our ERP system is older than some of our employees,” Annika sighs. “But nothing works here without it.” Welcome to the world of legacy systems—digital dinosaurs that still form the backbone of IT infrastructure in many companies.
The Price of Consistency
Modernizing legacy systems is more than just a technical upgrade—it's a matter of survival for businesses. According to a recent study, in 44% of companies, at least half of the critical business systems have been in operation for a long time. These figures reveal a dilemma: on one hand, these systems ensure stability and continuity; on the other, they hinder innovation and agility.
Manuel Blümel, Director of Solution Design at Turbine Kreuzberg, explains: “Outdated software systems prevent companies from responding flexibly to changes in their processes or the market. The often tangled structures in legacy systems cost time and money, frequently leading to unnecessarily complicated workflows.”
Why is modernization so important?
Manuel Blümel emphasizes: “In the past, systems were often adapted to workflows in a way that seemed pragmatic at the time. However, business changes. Today, companies that continue to rely on legacy systems face many new risks. The infrastructure lacks stability, error susceptibility increases, and maintenance and development become more challenging.”
👉 Benefits of Modernization:
Reduced maintenance costs and more efficient processes speed up development time and minimize project risks.
Modern architectural paradigms and interfaces allow systems to be more flexibly integrated into business processes.
Legacy systems pose greater risks to a company's data security.
Outdated systems often no longer receive manufacturer support and are difficult to maintain due to the limited availability of specialists.
Outdated software systems typically prevent companies from responding flexibly to changes in their processes or the market. Software with open structures and interfaces simplifies adaptability, leading to time and cost savings.
The flexibility of modern systems ensures that companies are prepared for changing market situations, as new functionalities can be integrated into modern infrastructures more quickly. Instead of constantly finding new workarounds, modern flexible systems are adapted to the new situation.
Legacy systems are not only less flexible and powerful, but they also pose greater risks to a company's data security. In many cases, outdated systems are no longer supported, meaning no more security updates. The manufacturers of old systems have moved on to newer versions of their software or no longer exist. As a result, security updates become increasingly rare or non-existent, leaving security gaps open. These gaps can be exploited by attackers to steal important internal company data, such as financial, personnel, or customer data.
“The longer outdated software is used, the greater the risk that vulnerabilities will be exploited due to missing security updates,” warns Manuel Blümel. “Besides the increasing attack vectors, this can quickly lead to legal issues, such as violations and fines for breaches of the General Data Protection Regulation (GDPR).”
“Whether you update your legacy system isn’t a question of if—it’s a question of when.” says Yoav Kutner, CEO of OroCommerce. “In my experience, both in large enterprises and smaller organizations, I’ve seen it time and again—businesses that swore they’d never replace their CRM or homegrown tech eventually find themselves deep in implementation projects years later.”
“Whether you update your legacy system isn’t a question of if—it’s a question of when.”
CEO of OroCommerce
The Path to a Digital Future
Modernizing legacy systems is akin to performing a heart transplant on an open patient—it must be done carefully and with the utmost precision. Manuel Blümel recommends: “For a successful modernization, an initial assessment of the company's requirements and current systems should be conducted. A detailed analysis identifies potential weaknesses and development opportunities.”
It helps to define clear goals that the transformation should achieve, such as cost efficiency and an improved user experience. This allows for more targeted efforts.
He adds: “Migrating legacy systems to the cloud also offers advantages for scalability and potential cost savings. Load peaks can be quickly and specifically managed, increasing infrastructure stability.”
The Challenges on the Road to Modernization
The biggest challenges in modernizing legacy systems often lie not only in the technology but also in people's minds. “Employees have usually become accustomed to the existing processes over the years. It is crucial to involve the team in the modernization process,” explains Blümel. “Training and workshops can help familiarize employees with the new workflows.”
“A common challenge is the misconception that everything needs to change immediately, which can make the project feel overwhelming.”
VP Product at OroCommerce
According to Itay Braverman, VP Product at OroCommerce, modernizing a legacy system doesn’t have to happen all at once: “A common challenge is the misconception that everything needs to change immediately, which can make the project feel overwhelming. Instead, businesses can focus on immediate priorities—like improving search functionality or making their catalog accessible online—while maintaining a long-term vision for goals such as scalability and enhanced user experiences. By breaking the process into manageable phases, companies can avoid unnecessary disruption and build a clear path toward sustainable growth.”
Another challenge is data migration. “Lack of documentation of outdated systems and their complex business logic cause problems in migrating data to new systems,” warns Blümel. “Data is often no longer understandable to outsiders. Additionally, outdated data formats need to be laboriously converted into newer ones.”
“The goal of modernization is not only to be current, but to stay current.”
Director Solution Design at Turbine Kreuzberg
After Modernization is Before Modernization
Successfully modernizing legacy systems is not a one-time project but the beginning of a continuous process. Manuel Blümel emphasizes: “The progress of new technologies is relentless and ubiquitous. The goal of modernization is not only to be current, but to stay current.”
He recommends: “Architectural paradigms, such as modern interfaces, and clear responsibilities for individual systems within the architecture ensure flexibility and sustainability. Regular audits are also important to stay technologically up-to-date and not fall back into old habits.”
Those who look beyond the initial investment costs and consider the total cost of ownership over the entire software lifecycle will realize: the hidden costs of legacy systems exceed modernization expenses. Maintaining outdated software, inefficiencies in daily operations, and potential data losses add up to a financial Damocles sword.
Modern systems, on the other hand, prove to be catalysts for economic efficiency. They enhance workflows from day one, create flexible solutions, and integrate seamlessly into business operations. Thus, what initially seems like a cost burden becomes an investment in the company's future viability.
Manuel Blümel concludes: “Modernizing legacy systems is an investment in the sustainable development of the company structure. To remain competitive in the market, transitioning to sustainable and future-proof systems is essential and opens the doors to more efficient software use for the future.”
Project manager Annika knows that the challenge is just beginning. But as the old screen flickers before her, she already sees the outlines of a more dynamic, future-ready IT. “It won't be easy," she says with a determined smile, “but it's necessary. No matter how well they once worked, there's simply no room for digital dinosaurs anymore.”