What hidden costs do legacy systems carry?

By Emanuel Böminghaus, Legacy Systems Expert and Managing Director, AvenDATA

By Emanuel Böminghaus

Legacy Systems Expert and
Managing Director, AvenDATA

In many companies, legacy systems continue to run quietly in the background. These are systems that should have been decommissioned long ago but are still in use because they are “still needed,” “not fully migrated,” or “kept for emergencies.” Whether it’s an old ERP system, outdated financial software, a custom built industry solution, or an obsolete HR tool as long as a legacy system is operational, it incurs costs. And not insignificant ones.

What many IT and business leaders often overlook is that the real cost of outdated systems is not reflected in visible budgets. Instead, it lies in a range of hidden efforts, risks, and resource commitments that accumulate over the years.

Hidden Licensing and Operational Costs

Even if a legacy system is no longer actively used, it still generates licensing costs. These may come from ongoing maintenance contracts, user licenses or third-party software that must remain in place solely because of the legacy system. Old ERP systems are particularly expensive, as their licensing models are often tied to active usage, even when only read only access is required. The same applies to databases licensed by CPU or named user models, even if they are only used for storing legacy data.

ECM and archive systems originally implemented for audit proof storage can also become outdated and costly to operate, especially when they must continue running for isolated legacy processes. The licensing structures of these systems are often outdated, difficult to renegotiate and complex to transition. In many cases, the cost is no longer justified by the actual value they provide.

Infrastructure costs add to the burden: data center space, virtualization resources, storage and backup capacity maintained solely for legacy systems. Even with minimal usage, ongoing operation leads to electricity costs, cooling requirements and hardware wear. In cloud environments, legacy systems can result in so called “zombie costs” and virtual machines, databases or object storage that are no longer actively used but continue to generate charges.

Maintenance and Instability: The Cost of System Fragility

Outdated software is often no longer maintainable, either because the vendor has discontinued support or due to a lack of internal expertise and documentation. When issues arise, troubleshooting takes disproportionately long. System failures require manual workarounds or tedious data extraction. The result is reduced productivity, escalations and temporary fixes that consume internal resources and often lead to high external service costs. The older the system, the greater the risk of compatibility issues with modern hardware, operating systems or security tools. This creates technological dependency on outdated components with unpredictable cost implications.

Ongoing Staff Commitment Due to Knowledge Dependency

A commonly underestimated factor is the need for personnel familiar with legacy systems. Often, this means relying on individual specialists or former project team members who “still know how it works.” This knowledge is rarely documented, difficult to transfer and highly person dependent. As a result, companies face hidden dependencies, which pose significant risks in times of talent shortages or retirement waves. New IT staff must also be trained, which is challenging without proper documentation and makes external support extremely time consuming. The outcome is increased internal effort with little productive value.

Legacy Systems as a Security Risk: Costs from Cyber Threats

Outdated IT systems pose serious security risks. Many lack current security patches, rely on obsolete encryption standards or have vulnerable interfaces that are no longer supported. Protecting these systems requires extensive effort, including network segmentation, strict firewall configurations, additional monitoring tools and internal testing procedures. These measures are resource intensive and often only partially effective. Without proper safeguards, companies expose themselves to significant threats such as data breaches, ransomware attacks and system outages. Accepting these risks without action can lead to catastrophic financial and reputational damage.

Unclear Responsibilities and Project Delays

When legacy systems remain in operation, they often become the foundation for new processes. This creates a dependency that slows down innovation and complicates transitions to modern platforms. Responsibilities for maintaining these systems are frequently unclear, leading to delays in decision-making and execution. The result is a fragmented IT landscape that is difficult to manage and expensive to maintain. Over time, this lack of clarity and agility can reduce a company’s competitiveness, making it harder to respond to market changes or adopt new technologies efficiently.

Conclusion: Decommissioned Systems Require Less Effort Than Keeping Legacy Systems Running

Failing to properly decommission and archive legacy systems leads to gradually increasing costs. These include expenses for licenses, electricity, maintenance, security measures and dedicated personnel. In addition, outdated systems slow down strategic progress and introduce technological risks. The solution lies in professional archiving: data and documents are extracted, securely stored in compliance with legal requirements and made permanently accessible through a separate archive system. This approach eliminates the technical, financial and security burdens of the original system. Archiving is not only more cost-effective than continued operation, it also ensures legal compliance, reduces IT workload and positions the company for future growth.

Planning to archive a legacy system?