The Cost of Legacy Systems or “If it Ain’t Broke, Don’t Fix It”
As the technologically based world of today becomes increasingly more invested in IT, manufacturers’ costs in this area continue to rise. One of the largest segments of this investment is the cost of maintaining legacy systems. For those manufacturers who have not yet made the transition to a state-of-the-art ERP system, you may be burning a larger hole in your pocket than you think. Although the upfront and upgrade costs for implementing an ERP system may seem high at first glance, the cost of maintaining legacy systems will continue to rise as they become more dated. The real risk stems from having an “if it ain’t broke, don’t fix it” attitude. Your legacy system may not be “broken” on the surface, but when it comes to saving you money, it probably is. This blog discusses what can happen when you are reluctant to get rid of the ol’ ball and chain—your legacy system.
A Hodgepodge of programming styles
Often, various parts of a system that has been around for a long time have been programmed by different teams. This means that there is no consistent programming style – making it very difficult and expensive to change. Some of the system may have even been created with obsolete programming languages, and finding developers who are knowledgeable about them may be problematic. Not to mention, having only one developer who knows the ins and outs of the system can be a high risk and is often the case with legacy systems. What happens if they’re no longer around to help? Smart manufacturers must be prepared for any scenario.
Dependence on IT resources
Legacy systems require specific IT skills in various programming languages and operating systems. This can create excessive training costs down the road. Manufacturers with legacy systems must plan ahead to source new in-house knowledge and talent that support the legacy applications. This, however, becomes increasingly more difficult and costly as the system’s complexity grows.
With years of maintenance and updates under its belt, the system may have developed an unstable structure. The data may have been maintained in different files which have incompatible structures, or there may be data duplication or loss of data, which can wreak havoc on service levels and the bottom line. There is no doubt that older systems can be full of information. However, the problem lies in the limited ability to access this information in a timely, useful manner. With legacy systems, accessing valuable information often requires a significant investment of time and energy.
Lack of access to new technologies
Legacy systems are often tied to old hardware, old operating systems, and old software versions. Sometimes, they can only work when running on the old computers running an operating system that is no longer supported. The typical response is, “But it works!”
Unfortunately, some of the hidden costs here are, first and foremost, these systems are no longer being supported by the manufacturer. There is no support line for some out of date operating systems or database servers.
Secondly, the newer versions of software and hardware often include the features and functions that companies try to add by customizing their legacy system. Think of the latest standards and software features that have appeared in your industry in just the last three to five years – legacy hardware and software systems were never built to support most of them, because they didn’t exist at the time, yet many are now standard features in new ERP systems.
And lastly, the newer versions of operating systems and software often have security fixes and features that help protect both your system and your data. As hackers get more sophisticated, so do the systems to combat them. By not maintaining the latest security updates to your operating system and software, you run the risk of comprising your network and data security.
Limited functionality and flexibility
Today, many manufacturing companies are evolving faster than their legacy systems can handle. Before, the old system worked fine and, if not a key component, was not a hindrance to growth. But now, as your company grows and changes and consumer requirements continue to heighten, it is imperative to have the best tools available. Legacy systems can actually get in the way of growth and change because they simply cannot keep up—or if they can, it is prohibitively expensive and time-consuming to keep them up to speed.
Having lack of support for current business needs such as business intelligence and collaboration is another dismal result of your legacy system being difficult to use, slow, and inflexible. What happens when you want to shift your current business model? Unfortunately, your legacy system will likely not be able to handle a change in structure and will no longer fit your business model. In contrast, an updated ERP system has the functionality to effectively make that transition.
Although transitioning from a legacy system to a new ERP system requires an investment and commitment, the business value is well worth it. The ongoing costs of maintaining legacy systems can be a drain and can drag your company down with them. No matter how you slice it, there is more risk and cost in keeping your legacy system than giving it the boot.
Are you considering a change to a new ERP system? Talk to the ERP and manufacturing experts at ArcherPoint to see if Microsoft Dynamics NAV is right for your company.
Read Microsoft Dynamics NAV solutions for manufacturing to see how NAV can add value to your business.