Managing the Costs of Your Outdated Legacy Applications

No matter the size of your organization, whether it is an enterprise with thousands of seats or a small business with 10, if you have been in operation for over a decade, you are dealing with outdated legacy applications. In some cases, those apps may be built upon systems that are over 20 years old.

Decades of investment have made these legacy apps a vital piece of your organization, and over time, they’re only getting more difficult and costly to maintain. These costs are limiting businesses of all kinds, with Gartner reporting that many businesses are still not fully participating in a digital ecosystem due to budget constraints.

With business leaders angling to better position their company to not only withstand the digital disruption that plagues every company, but thrive in it, IT decision makers must understand the cost and limitations of their legacy applications, and what the solutions to fixing them are.

The Costs of Your Legacy Applications

Think of it this way: a legacy application is like an antique car – it may continue to operate, but every additional year of usage makes it more fragile and expensive.

Legacy Applications Maintenance Costs

Maintenance costs of legacy apps can be crippling for businesses. On average 60 to 80% of IT budgets are made up of maintenance costs. This allows for very little wiggle room for any other activities.

These costs include everything from maintaining the infrastructure created to run these apps to  supporting compatible hardware that is necessary – and increasingly more difficult to find – for operation. As your legacy technology ages, every single piece that is required to use it also ages, increasing costs tenfold.

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The Knowledge Costs of Your Legacy Apps

Simply maintaining these legacy applications isn’t enough; your business needs IT talent that is capable of operating it. Talent costs can equal, or even eclipse, that of maintenance costs, as the required skills are not just expensive, but difficult to find. Not to mention the work-hours wasted that could otherwise be spent elsewhere to grow the business.

The Difficulty of Finding the Right IT Skills For Your Business

For example, one of the more common legacy programming languages, COBOL (Common Business Oriented Language), was created in 1959.

Today, 9% of businesses still require talent with this skill set, nearly 60 years later. You can’t expect to find a COBOL programmer fresh out of school, and a veteran with the necessary knowledge will have to be paid accordingly.

Employees with years of intricate business knowledge about how these apps operate and function within your organization can be impossible to replace if the only option is to find someone who has to start from ground zero.

You want to avoid any organizational dependency where these employees are the only people able to answer for these important aspects of your business, creating inefficient bottlenecks.

Solutions for Legacy App Costs

To solve your business’ problem with legacy app costs, there are three primary options:

  1. Replace
  2. Update
  3. Maintain

Replace Using Custom Software Development

In some situations, it is just not feasible to move forward with your legacy apps, and rather than update them, the best option is to turn towards replacement. If you are replacing your legacy platform, you’ll want to put together a project team that can plan for each aspect of the replacement from a technical, business, process, and people perspective.

Typically, there are two options: Packaged Solutions or Custom Software Development.

Packaged Solutions

You may be able to find a cloud app or packaged solution that you can modify to meet your business needs. These Commercial Off-the-Shelf (COTS) applications typically require some level of configuration and custom coding to integrate with your systems. If it meets most of your needs, you can save a lot of the upfront work that comes from building a brand new application from scratch.

However, since your core business app is what runs your organization with your specific business rules, it’s unlikely you’ll find an exact match without some level of customization and configuration. Therefore, there is still development needed, especially in the areas of integrations and reporting.

You have to be careful to not deviate too far from the framework or you will run into issues down the road when future updates are needed. This is one of the downsides to a COTS app.

Custom Software Development

There are quite a few benefits to this, primarily, the ability to create new technology that is unique to your exact business needs. Since this custom software is designed specifically for your business, you can be confident that your new business apps will only improve your processes.

However, custom software is costly. According to Statista, the average cost of mobile application development worldwide can cost about $150 (USD) per hour of development. Creating custom software can often be a multi year process, complicated, and costly to develop. This is not just on a one time basis but also costly from an ongoing maintenance and support basis (as you will have to maintain yourself unless you partner with an AMS partne).  

In order to create the best situation for your company, you’ll want to work with a team of trained IT specialists who will help you realize your business application goals. (Click here to learn more about Custom Software Development and Software Package Selection)

Update Your Legacy Apps with Modern Functionality

This means, keeping your core legacy application intact but investing in modern technology solutions. Examples of this include:

  • Adding self-service portals
  • Mobile and web enhancements
  • Gathering business intelligence
  • Data mining
  • Data warehousing for analytics gathering

You can add these features to the front end of you application to provide a better user experience and use tools to gain more insights from data while leveraging core business rules. All new functionality must be integrated with your legacy platform. See our interview where we walk through how to upgrade your legacy platform to take advantage of this type of functionality.

Maintain Apps with Application Managed Services

Whichever option you choose, you’ll have to maintain your app going forward. Regardless of if it is a new replacement app, updated legacy app, or original legacy app – it will still require care and support to keep it functioning correctly. You just have to decide if it is something you want to manage in-house or hire a trusted partner to maintain.

Turning to application managed services means deciding to outsource the management and maintenance of your business apps. This typically involves tasks such as bug fixes, monitoring, minor enhancements, queries, and patching.

AMS solutions are available to businesses of all sizes, and are best suited to those business leaders and IT decision makers with strapped IT budgets who are unable to continually fill niche positions where they need IT professionals with skills specific to their applications and databases. .

AMS also allows companies to redirect their current team from day-to-day maintenance of the current platform to provide guidance on a major systems upgrade. That way the AMS provider upkeeps the existing system while the groundwork is laid to transition to the new one.

If you are constantly struggling to manage your business apps, outsourcing your efforts to an AMS partner gives you that relief. Your partner will understand that your apps are core to your business and must receive dedicated support, and that you cannot afford to constantly hire and train IT personal to support them.


Learn More About Application Management Services:


Resolute Technology Solutions offers complete Application Management Services that eliminate the burden of your legacy applications. Contact us today for a free 30 minute consultation to learn how we can turn your legacy applications into superstars that improves upon your business.



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