Software Engineering

Legacy Systems:
The hidden costs revealed


What comes to mind when you think of the word “Legacy”? My thoughts can’t help but wander onto my grandfather’s porch while he is sipping his morning coffee with the world at his feet. What a legend he was! He often used to say: “If it ain’t broke, don’t fix it. ”This valuable principle has helped me not to spend money on things where the cost of replacing them outweighs the cost of keeping them.

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But... There comes a time when we must replace what is old.

Why? We live in an era of digital transformation. When software and systems become outdated, growth has outstripped its capacity to meet the new demand. Your systems become unreliable, which can place your organization at risk. Whatever the valid reasons are for replacing what needs replacing, there is one factor that cannot be ignored – the cost!

"At least 40% of all businesses will die in the next 10 years… if they don’t figure out how to change their entire company to accommodate new technologies." — John Chambers, Cisco

While many business owners are aware of the need for system upgrades, they find themselves in a position where they feel they can’t afford to pay for new software every few years. This might mean that soon they can no longer run the critical business applications they need. Before you realize it, as your business grows, and supporting systems become more complex, keeping costs under control has already started becoming a challenge.

Have you considered what your legacy system is truly costing your business?

Let’s say, for example, you have 10 employees, with the ability and capacity to adequately service 10 clients, each. They do their job well, and your organization starts to grow. Soon your client base reaches 150, but your 10 employees can only adequately service 100. No problem – you’ll find 5 more employees. On top of your increased workload, as manager, you need to invest time and resources into the process of recruitment. After a month, let’s say 30 viable candidates have applied; but during the interview process it becomes apparent that only 3 of the candidates who applied are actually a good fit.

Now the two options on your table will probably be: Appoint 3 excellent candidates and hope that the team will perform well enough to service the 150 customers, even though past experience in the industry is telling you their capacity will only allow them to service 130 customers well. Appoint 3 excellent candidates and 3 more not-so-great candidates, in the hopes that the strongest link will strengthen the capacity of the team. Option 1 might lead to unhappy employees, whereas option 2 will probably decrease the profit margin. While you are going through the interview process, senior leadership informs you of their decision to be pro-active in looking for 3 more suitable candidates to appoint.

They, in anticipation of future growth, will need to grow into the system and be available to service future demand. The result will be the organization going through a period of time in which, in anticipation of growth, no longer 10 but 19 salaries need to be paid to service the existing 150 clients. With the salary expense almost doubling, the profit margin has inevitably decreased. If your business is one of the lucky ones, you will have teams that perform well, and you will soon recover … but before long, the whole process will have to start all over again.

Have you considered what the outcome would be if the salaries of the additional 9 employees were invested into reliable software that could grow the capacity of each employee to a place where they can comfortably accommodate 20, 50 or even 100 customers each, instead of 10?


Taking all the above costs into consideration – are you still wondering whether the replacement cost outweighs the true cost of your current legacy system? Why not start by contacting us for a cost estimate on replacing or upgrading your legacy system? We have assisted many clients to maintain their lead in their industries by providing them with reliable software. We would love to tell you more about our process of replacing your legacy system, and how we can help you make a smooth transition into your brighter future.