Legacy systems: Growing pressure in the upper mid-market
By AvenDATA
As digitalization and dependence on electronic communication increases, so does the
pressure to renew outdated IT systems. Older IT or applications that are no longer updated
or supported can be a challenge for companies. Recently, there is a noticeable trend towards
digital transformation in the SME sector.
“Many large corporations are already using legacy archives. We are seeing considerable
awareness in companies in the upper mid-market with annual sales of 300 million or more,”
says AvenDATA CEO Emanuel Böminghaus.
Reasons for Growing Pressure:
- Technological Obsolescence: Legacy systems may lack compatibility with modern technologies, hindering innovation and agility.
- Security Concerns: Outdated systems may pose security risks, making businesses vulnerable to cyber threats.
- Integration Challenges: Legacy systems can impede seamless integration with newer technologies and applications.
- Scalability Issues: Businesses expanding their operations may find legacy systems less adaptable to growing needs.
- Operational Inefficiencies: Outdated interfaces and processes can lead to inefficiencies, impacting overall productivity.
Impact on Businesses:
The reluctance or delay in transitioning from legacy systems can result in various challenges, including increased operational costs, decreased competitiveness, and potential disruptions in customer service and satisfaction.
Legacy systems in SMEs — a growing problem
Historical data is essential for business processes and for maintaining business operations.
Outdated IT systems frequently store decades of data. Using them also means having to
maintain the old hardware. On top, staff needs to be trained or specifically hired for the task.
As a result, maintenance costs can soar, and security updates may no longer be available.
The rising costs, lack of security and incompatibility with modern technologies put pressure
on organizations operating legacy systems. Legacy data has therefore become a common
obstacle to the digital transformation of mid-sized companies.
Discrepancies in IT investments
According to new research from Coeus Consulting, only 53 per cent of IT executives consider the state of their business-critical IT to be fit for the future. Shortages of skilled labour and rising IT costs are seen as the biggest disruptive factors in the IT supply chain. But Legacy systems come in third. Opponents argue that the ability of businesses to innovate is ultimately not dependent on whether the IT and its data is moved to the cloud or not. However, when it comes to investment, overhauling corporate IT ranks only eighth in the list of priorities.
This mismatch inevitably leads to an increasing number of organizations with legacy
systems. It is therefore not surprising that 59 per cent of respondents believes that failures
are likely to occur within the next three years. Respondents believe that legacy system
failures will have a significant impact on the IT supply chain and business operations. This
suggests that there is a growing need to refresh systems. Cloud technology is currently the
best way to do this.
Latest example from the insurance industry
Insurance is a very data-intensive industry, making it a pioneer in many areas of information
technology. Analysis by the German Insurance Association also recognizes a growing
demand in this sector. According to the report, digitalization is an important driver for the
sustainable development within the insurance industry.
A prominent example is Continentale Versicherung's recent cooperation with Adesso Insure.
In the process, the company's legacy systems were migrated and a cloud-based claims
management system was set up on the basis of the “in|sure” platform. Employees say this
provides significant improvements in compatibility and functionality, as well as an enhanced
customer experience.
The solution: legacy archives
IT consultants help companies assess their needs and select the best solution for their legacy systems. Companies like AvenDATA are specialized in the maintenance and modernization of legacy systems. As an expert in the field of legacy systems, the company offers innovative solutions for archiving legacy data. With this strategy, AvenDATA supports its customers in overcoming many of the problems associated with outdated technologies. With the help of its proprietary ViewBox software, data storage and management, including application decommissioning and archiving of legacy data, turns into a manageable task.
