Silent Business Killer: 5 Signs that You are Facing Legacy Software and How to Deal With It
Running a business means solving problems. A good entrepreneur knows how to resolve issues fast with minimum business impact. More experienced business executives look to determine intersections and patterns to uncover the optimal solutions. Top business leaders have a completely different mindset. They think about causes that create consequences. They know that finding the link between cause and effect is the only way to mitigate or eliminate business challenges.
While researching the cause, ensure you analyze the software ecosystem. Outdated or legacy software could be driving losses. But when does the software become legacy? Is it always wrong to have legacy software? And how does a business determine whether the software is a cause or not? Let’s find out together!
What is legacy software?
The nature of legacy software is complicated. In general, legacy software means a digital asset that has reached its end of life. The vendor that developed the solution no longer supports it. It does not receive updates or security patches. In most cases, legacy software is built as a closed source system, so third-party providers are unable to support it.
This definition seems clear, but how does software become legacy software in practice? Let’s review the process using one of our case studies as an example.
Here’s how it happened with Babypark:
In the early 2000s, Babypark purchased an ERP (Enterprise resource planning) system. At that time, it was a comprehensive solution for growing businesses in Europe; it checked all the boxes and solved all the challenges.
Little by little, the situation changed over time. Babypark was growing, and the business required new features. The only way to get those was by creating different workarounds in the software. They were solving a problem but not addressing the cause.
For example, the ERP system didn’t support shipping costs natively. When a customer added shipping to the product, the system added an individual product named “shipping” to the order to calculate the final price. It was hidden from the front end but still caused additional problems.
Over time, the number of these workarounds peaked. It started to harm business operations, and as a result, it was hindering growth. Opening a new store or expanding internationally was almost impossible. When we started to work on the project, it was clear that the legacy software was the cause.
Babypark’s business is an excellent example of how legacy software, over time, negatively impacts the business. But software is only part of the issue. The best friend of legacy software is a legacy process. They always go hand in hand. The tool that you’re using may not be the only problem.
Imagine speaking to a foreign friend on an old Nokia phone using your mother tongue. You can switch to a newer model phone to hear him better, but you still won’t understand each other. The communication process is wrong, and it should be redefined first.
How to spot legacy software?
Outdated is a relative measurement. For some niches and businesses, 20 or 30-year-old technology could be okay — for example, spaceships. Modern rockets and satellites use older electronics and still achieve outstanding results. This is because the number one priority in the space industry is reliability, and these technologies offer it.
Retail is more dynamic, but it’s still a challenge to determine if you face legacy applications and if it’s the cause of ongoing problems. Here are 5 common signs that will help you understand if your software is outdated and is negatively affecting the performance of the business:
1. Age of the software
The first and the most obvious sign is the age of the software. Flexera report found that the majority of products have a five-year lifecycle. We suggest considering everything older than 10 years in your retail ecosystem as potential legacy software.
10 years is a long enough period for technologies to change dramatically, for vendors to leave the market, and for processes to transform. If you uncover any challenges in your business operations and have 10+-year-old software, consider hiring a consultant to audit your ecosystem and find a cause.
2. Absence of any support
Another noticeable sign common for 99% of legacy solutions is the absence of support. Absence means zero feature drops, no functionality updates, no security patches, and no call or email support. It’s possible to develop a workaround for features, but it’s impossible to overcome security issues.
Based on the way solutions are developed, you cannot access the outdated software and make it resilient to newer versions of viruses. The broader effect becomes clear. Your business creates tons and tons of workarounds that generate a large number of weak points in the software that “blow up” one day. An effect like this stalls every other process and blocks further business operations. Or, should you be the victim of a hacker, the likely cause will be the legacy software.
3. Countless workarounds
As you have likely determined, workarounds are another common sign of legacy software. In broad terms, a workaround is a temporary fix to a problem. These quick fixes become weak points of the whole business ecosystem. The more complicated and confusing the workaround you create, the weaker the broader system becomes.
When you see that many processes use temporary fixes, you likely are facing legacy software. A sure sign would be the fragility of the processes. Processes built using legacy software tend to fail often and are unreliable. In simple terms, if you see something failing regularly, think of legacy processes or solutions.
4. Giant technical debt
A good friend of workarounds is what we refer to as technical debt. Technical debt is when the development team quickly applies an easy solution rather than choosing a better approach that would take longer. Debt accumulates when you’re fixing something on-the-go or don’t invest the development budget properly.
When the technical debt grows to be significant, the system becomes unstable. One fix starts intercepting another, further development becomes impossible, and a complete rework becomes the only way to make things function properly. Many legacy applications have a giant technical debt. If you are experiencing features that should be redeveloped, it’s a legacy software issue for sure.
5. Failed implementation
One would expect that hiring a development team to build a custom software solution is the way to overcome legacy software, right? Unfortunately, no. Even in this case, you can face a legacy situation at the start.
If the service provider doesn’t complete an appropriate discovery phase and business analysis, if the development process was ineffective, or if the system was built with zero domain expertise, your software might become legacy from the launch day. A system made with these oversights usually requires many workarounds that create weak points, which often reveal themselves. You’ll quickly realize the need for restarting from the ground up, resulting in losses of time and money.
Don’t get obsessed with legacy software replacement. Even if you have uncovered a legacy technology or process within your workflow, it doesn’t necessarily mean it should be replaced immediately.
The final point about outdated software is that it could be completely fine. The overall framework of how to deal with legacy software looks like this:
First, you uncover the outdated software. When spotted, determine the process(es) connected to this software and try to investigate it in terms of its being outdated. Then, consider a risk mitigation strategy. Calculate the cost of retaining this software and how to overcome and minimize its effect. The Return of Investment (ROI) calculation becomes very handy.
It’s crucial to consider ROI before making a decision. Removing legacy software is always about removing a legacy process, replacing it with a new one, training staff, and maybe replacing a few related processes to align with the new workflow. This results in costs that could be greater than the cost of keeping things as they are. There is no need to expend revenue if the existing system works okay. Legacy is a negative only when it is impacting the business.
Understand that the older the system, the more costly the replacement process would be. This rule works in 100% of cases.
Finally, after all this analysis, you can consider the option of what to implement and how.
The goal of this article is to illustrate that dealing with legacy software is complicated. From the moment you spot outdated technology to the moment you replace it, deep analysis and calculation should occur. Replacement could pay dividends or could be a miscalculation. The best method to go through this process is to engage an experienced consultant and solution partner.
At Maven, we help retail businesses worldwide deal with legacy daily. We know how to approach ROI calculation and minimize risks cost-effectively. Babypark, Printkick, and many more have proven it. Let’s start small. Contact Maven today and let our specialist audit your process. We’ll show you where the problems are and how to most effectively address them.