In the digital world every single company across every industry is dealing with disruptive technologies. Emerging tech like AI, machine learning, Internet of Things (IoT), and the most disruptive of them all, the cloud, are forcing businesses of all sides to adapt or be left behind.
In the face of all this disruption, the vast majority of enterprises are still holding on to legacy systems that are holding back the business. Meanwhile, the infamous skills gap looms large over technology leaders.
Whether you are a CEO, CIO, or IT director, as a technology decision maker you are faced with a complicated decision of deciding how to proceed within your IT operations.
Should you focus on upgrading legacy systems? Or are your efforts better placed in building a world class IT team that can work on all the issues of transformation for you? Finally, is there a better third option?
The numerous options ahead of you can be overwhelming. After all, how you decide to proceed will have lasting impact on your business. To help, here are the pros and cons of upgrading and hiring internal IT teams to manage your legacy technology.
Is Upgrading Legacy Technology Right For You?
The reality is that most enterprises are still holding on to legacy, on-premises solutions.
Companies that are decades old did not have the ‘clean-slate’ opportunity that many born-in-the-cloud startups have had. In some cases, those legacy systems can be decades old, with thousands of employees trained on them.
For legacy systems and applications, it isn’t a matter of whether you should upgrade or not, but a matter of when.
Upgrading Legacy Technology Pros
- Reduce legacy system maintenance costs — Legacy systems like IBM Domino, SAP ERP, and Oracle EBS and legacy programming skills like COBOL are still in use in many large companies today, but it is only getting more expensive to maintain them.
- In fact, 60 to 80% of IT budgets on average are spent on maintaining legacy applications, which is up from previous numbers of 50 to 70%.
- Improve Business Processes — Modernizing legacy applications can improve business processes in the long term. Enterprises can average hundreds of applications, and employees report that it can be difficult accessing information across those applications under aging infrastructure.
Upgrading Legacy Technology Cons
- Modernization is complex and high-risk — It isn’t feasible to expect legacy systems or software to continue to last decades into the future. But that doesn’t mean that CIOs should look to start anew by ripping out and replacing infrastructure with decades of investment immediately. Moving to modern architecture is a complex, high-risk endeavour and mistakes can be costly.
- The total costs of modernization can be overwhelming — When embarking on modernization, you’ll want to consider how much downtime will be required, the return on investment (ROI) of the transition, how your employees will react to the transition, and any potential workflow issues. There are no easy formulas to updating outdated technology.
Discover which of your legacy systems and legacy software are a priority, and start work on those. While you’ll need to get to modernizing the majority of your systems eventually, for now, you’ll find that some can be left alone.
Is it Worth it to Hire an Expensive IT Team?
The skills gap and acquisition of IT talent has consistently been the number one concern for technology leaders like CIOs. While finding that perfect fit for your IT team can pay dividends, the cost of that search can be too high.
- Talented IT professionals are available — Tech skills are some of the most desired across all industries. There are over half a million technology jobs available for a range of titles and levels of experience. It is expected that by 2024, 135,000 software developer for applications jobs will be filled
- No one will understand your business better — Hiring the best possible developers for a position in-house can prove beneficial.
By having a sole focus on your specific business operations, there will be no one better to manage and maintain them. While it may prove costly to keep the best talent on your IT team, having a constant presence in-house can significantly aid in your modernization operations.
- Combating the skills gap — Despite the availability of tech talent, nearly 7 out of 10 CIOs find it difficult to hire the skills they need to drive digital transformation. Your legacy technology may require skills with programming languages or operating systems that are no longer taught in schools.
- Constant struggle to retain IT talent — Considering how competitive tech jobs are, IT professionals are looking to take advantage of this job market. CIOs worry about talent retention, and those worries are justified: one-third of IT professionals plan to seek new jobs.
- Expensive costs to maintain an IT team — In order to retain the IT talent you have spent all that time and resources on you will have to keep in mind the market and how expensive that talent will be to retain.
The Third Option: Partner With an Application Management Services Provider (AMS)
If neither option strikes you as the best for your business, fortunately, there is a third option: partnering with an Application Management Services (AMS) provider. Essentially, with this option, you are outsourcing your IT needs and putting all of the responsibility into the hands of a trusted partner.
Modern applications have become integral to business processes and not every business is positioned to take advantage of new infrastructure. Similarly, it is not feasible for every business to build a state-of-the-art IT team when the costs outweigh the benefits of having an in-house IT department.
Managed service providers who specialize in applications services can act as your IT team and take responsibility for the monitoring and maintenance of your business applications. This is an option for technology leaders of both enterprises and small- to medium-sized businesses who may be struggling to find the right solution for their business.