What is a legacy system?

In a world where organizations are tasked with keeping pace with the breakneck speed of technological evolution, it can be easy to forget all that gets left behind. But unfortunately for many organizations, leaving behind old technologies can be quite problematic.  

These older software systems – also known as legacy systems – often play a critical role in the everyday operations of an organization, despite their obsolescence and obvious limitations. So why do organizations keep these clunky old systems, and what makes it so tricky to move away from them? Today, we’re exploring the intricate world of legacy systems to uncover their impact and discuss how organizations can start on the path to modernizing their IT infrastructure. 

Defining legacy systems: more than just old technology 

Any piece of software can become old and outdated, but that doesn’t automatically qualify it as a legacy system. Rather, a legacy system is a piece of outdated software that’s still being used as a core part of a business’s functions. Because these old systems play such a critical role in an organization’s IT infrastructure, they can’t always be shut down or modernized in a straightforward way.  

Key characteristics of legacy systems 

Legacy systems are typically defined by a few distinctive characteristics, including:  

1. Lack of vendor support: the system’s original developers no longer provide updates or maintenance, leaving organizations to manage these systems independently. This can be risky as the systems won’t receive regular updates to patch security vulnerabilities.  
2. Technological incompatibility: these systems struggle to integrate with modern technologies, creating significant operational challenges and often creating issues like data silos.  
3. Escalating maintenance costs: as systems age, the resources required to keep them functioning become increasingly expensive and difficult to manage. This adds complexity and cost.  

Real-world examples: legacy systems in action 

The prevalence of legacy systems might surprise you – they're everywhere. For example, a few scenarios that might involve a legacy system are:  

• Public sector organizations: Notorious for moving in slow motion, government and public sector entities are often hamstrung by the bureaucracy involved in getting approval for new expenditures and projects – meaning these organizations often rely heavily on old-school technology.  
• Banks or financial institutions: Many financial organizations still rely on mainframe systems that were developed decades ago to manage critical financial transactions. 
• Manufacturing: Across the manufacturing world, production often depends on specialized hardware and software systems that cannot be easily replaced without significant business disruption. In fact, a 2022 report found that 74% of manufacturing companies were still relying on legacy systems and spreadsheets.  
• Enterprise resource planning (ERP): Some organizations still rely on custom-built ERP systems developed in the 90s to manage core business processes. Reliance on these systems can stifle innovation and affect company growth.  

The age-old challenge: why legacy systems remain 

The obvious question might be: why on earth would any organization choose to keep using old, outdated systems? The answer is complicated, but usually comes down to three issues:  

• Costs: Business leaders are often reluctant to even explore the idea of modernization due to the perceived costs of the endeavor. Of course, the folks who pay for the systems aren’t usually the ones tasked with using them on a daily basis, so there’s often a disconnect about the urgency of the matter. Use our tool to calculate the cost of using legacy systems.
• Risk of data loss: In some situations, the possibility of valuable or sensitive data being lost or compromised is viewed as too big of a risk. 
• Business-critical dependencies: Many legacy systems are so deeply, and historically, integrated into operations that replacement seems downright impossible. 
• Red tape: With multiple layers of approvals required, getting out from under a legacy system can sometimes feel like more effort than it's worth to the stakeholders involved.  

Types of legacy systems: thinking beyond software 

While legacy systems are typically lumped into the broader “software” terminology bucket, in reality, legacy systems can take multiple forms. 

Legacy software 

Legacy software, or legacy applications, refers to programs or platforms that are no longer updated by developers but are still critical to everyday operations.  

One notable example of legacy software is Microsoft XP, an old operating system which the company ended support for in 2014. It might seem impossible, but indeed: an estimated 5.5 million devices are still currently running Windows XP. It’s a small proportion of the Windows user base, but with billions of devices running on Windows worldwide, it’s still a very surprising number.

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Another example is Lotus Notes, (the artist formerly known as HCL Notes and/or HCL Domino) something of a do-it-all software that had a flash-in-the-pan moment of success in the 90s. Because it was seen as “ahead of its time” by some loyal users, it's enjoyed a surprising amount of stickiness within certain sectors.  

The primary risks associated with using legacy software are:  

• Security risks or vulnerabilities, thanks to a lack of ongoing updates 
• Poor performance, due to a lack of integration with modern IT environments 
• Limited scalability and adaptability, which can hinder an organization’s growth 

Legacy code 

More narrowly, legacy code is any program that’s been written in outdated languages or styles, making it difficult to maintain or extend. 

One example of legacy code is COBOL, short for Common Business Oriented Language, which is a programming language that was specifically designed for business use in the 50s. After 65 years, COBOL is still used extensively in certain sectors, including financial services. Still today, COBOL supports 80% of in-person credit card transactions and 95% of ATM transactions.  

Despite its prevalence, COBOL is indeed a legacy system that causes a multitude of issues, including an inability to integrate with other systems, security vulnerabilities, and a lack of basic modern functionality.   

With COBOL and other legacy code, developers face substantial hurdles that usually include:  

• Inadequate documentation, necessitating guesswork in decision-making 
• Dependence on obsolete libraries, adding complexity 
• Diminishing expertise in older programming languages and styles  

Legacy IT systems 

This broader category encompasses entire technological ecosystems, though the terms ‘legacy IT system’ and ‘legacy software’ can sometimes overlap.  

One example of a legacy IT system is a mainframe computer, which represents the most classic version of a legacy system. Mainframes are commonly used in banking, logistics, and insurance companies to process data. Because they’re typically designed to do one thing very well, they lack the modern features and flexibility needed to scale with a business and can pose a serious security threat if they’re not properly protected. Needless to say, mainframes from the 90s are not especially apt at enabling compliance with rapidly evolving privacy regulations.  

The most common hurdles with legacy IT systems are:  

• An inability to keep up with changing regulations  
• Aging server infrastructure that holds a significant amount of obsolete, chaotic data 
• Complex IT infrastructures resistant to digital transformation 

The data migration decision 

When the time comes to modernize outdated systems and software, migrating data from these locations is more than a technical challenge – it's a strategic imperative. The data held in these systems is likely to be critical to the ongoing success of your organization, and often, its regulatory compliance.  
 
During migrations, organizations typically need to navigate some complex terrain. The biggest challenges during migration are typically ensuring data integrity during the transfer, keeping costs (both financial and time) down, and overcoming the dreaded compatibility issues across systems.  

Best practices for successful migration 

Despite the inevitable challenges, there are a few steps you can take to ensure a successful data migration from the start.  

1. Conduct comprehensive system assessments to understand what you’re working with and map out what you’d like to achieve.  
2. Use an intelligent migration tool that can help you plan, track, and assess the process. 
3. Develop a plan to roll out modernization processes in phases to limit operational interruption. 

Learn more in our article on legacy application modernization. 

The risks of inaction 

When it comes to legacy technology, there does exist some degree of risk when it comes to modernization.  

Data could be impacted, costs could stack up, stakeholders could become so frustrated they push to cancel the project entirely, operations could be affected – it's not an unfounded fear. But the reality is, inaction is the biggest risk of all. 

Continuing to rely on legacy tech without a plan for modernization exposes your organization to significant risks: 

Operational inefficiencies 

• Consider how much time and money has been spent on maintaining these systems from a hardware, software, upkeep, personnel, and training perspective. What could those resources have helped you achieve had they not been directed to an old, outdated system?  

Escalating security vulnerabilities 

• Legacy systems don’t get the same ongoing support or maintenance as modern systems, which means security weaknesses often go unnoticed – until they’re exploited. With no ability to patch vulnerabilities, organizations that use legacy systems are exposing themselves to a significantly higher risk of data breaches.  

Reduced competitiveness 

• Beyond the lack of scalability, organizations that are technologically stuck in the past lack the flexibility to quickly pivot their strategies and operations to meet changing market and customer demands, sacrificing their competitive edge. To boot, the teams tasked with using them can get tired of outdated technology or bad workarounds and ultimately leave the company, further hindering your organization’s progress. And finding good people to replace them? Good luck if your tech is still stuck in the past.  

Challenges in integrating with modern technological ecosystems 

• Want to embrace that new AI technology that’s taking your industry by storm? If you’re relying on a legacy system, there’s a good chance it might not be able to integrate with it. Whether it’s an AI tool or something else, you’ll remain hamstrung by your legacy system’s inability to talk to other systems for as long as you stick with it.  

Summing up: a strategic approach to legacy systems

Like it or not, many of us hold a special place in our hearts for legacy systems. Lots of data and dev pros have cut their tech teeth on these old school systems, which offer familiar interfaces and reliable functionality, despite their obsolescence. But at the end of the day, the reality remains: they’re putting organizations at risk.  

To adequately manage the process or modernization, organizations need to develop tailored plans that balance the value of technological advancements with operational stability.  

By adopting a proactive, strategic approach, businesses can transform their legacy systems from potential liabilities into platforms fit for the future.  

The RecordPoint solution 

Ready to start on the path to modernizing your legacy systems? RecordPoint can help you every step of the way. With comprehensive, scalable data discovery; intelligent migration capabilities; and compliance-friendly application retirement, the RecordPoint platform has the robust features needed to bring your organization up to speed.  

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