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The Slow Burner on Efficiency

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Feb 10, 2024 #Burner, #Efficiency, #slow

It may increasingly look like a relic of a bygone age, but analog and legacy equipment continue to permeate the digital age. Despite the UK being one of the most technologically advanced nations in the world, legacy equipment is perhaps more commonplace across British businesses than you might think.

Hospitals are renowned for utilizing legacy equipment. For example, many X-ray machines and CT scanners are often running on unsupported operating systems. The financial sector is also guilty, with mainframe computers often being employed at traditional banks for data storage. In 2021, The Financial Conduct Authority (FCA) found that 92% of the UK’s financial services firms rely on legacy technology.

With such a prevalence of legacy technology scattered across our business landscape, it is highly likely that organizations we regularly interact with rely on out-of-date systems. Using technology that is no longer supported or has been decommissioned sounds like a recipe for disaster, and we will see here that it is indeed a slow burner for reducing the efficiency and profitability of a business.

Why do organizations persevere with legacy?

Before delving into the most common mistakes, we must first understand the context behind why organizations continue to use legacy equipment.

A common answer will be cost. Undergoing digital transformation is a financial commitment that requires an upfront investment in terms of time, money, and resources. It may be impractical for a company that’s caught up in the day-to-day, especially if budgets are tight. It involves introducing the latest software upgrades and training new members of staff on how to use new applications and processes, which may start to impact service-level agreements. But this can often be a false economy, as legacy equipment will end up being more costly in the long run.

The other key reason why businesses endure legacy equipment is down to hesitancy to change. If it has been in use for a long time, organizations can become comfortable with old equipment, added to the fact that legacy equipment is notorious for having long lifecycles. This paradox, known as the sunk cost fallacy, will hold back decision-makers from phasing out legacy equipment as they cannot absorb any losses due to prior investments.

Chaos results from a lack of cohesion

One of the biggest mistakes you can make when maintaining legacy equipment is ignoring siloed systems. An organization’s IT infrastructure should operate like a well-oiled machine, with every component successfully integrated and performing its designated role.

With legacy equipment, breakdowns in communication are commonplace as it becomes difficult for IT teams to navigate the issue of assimilating old with modern software, leading to compatibility issues and fragmented systems. By not quickly identifying siloes and obstacles to workflows, your IT system may be at risk of data inconsistency, limited visibility across the estate, inefficient workflows, and duplication of work.

For your developers who are responsible for creating and maintaining the technological infrastructure of your organization, siloed systems make day-to-day tasks much more convoluted. To overcome integration issues, companies need to consider introducing an Internal Developer Platform (IDP) which brings all the disparate components together to enhance integration and give developers the time back to build business applications. That way, DevOps teams can rest easy and will not need to spend hours manually writing code to remediate integration issues.

The enemy of agility and scalability

Agility and scalability define modern companies. Whereas agility encompasses organizational responsiveness to a fast-changing business environment and the ability of team members to collaborate effectively, scalability is measured on the successful maintenance of agreed service levels when operating at full capacity.

For your business to handle large volumes of traffic and be responsive to sometimes unpredictable customer demand, you need to employ the best technology across your IT infrastructure, which is in complete contrast to persevering with legacy equipment.

The problem with legacy equipment in this context is it can hinder optimal business performance. It lacks the computational load to support large-scale transactions and data storage capabilities. We live in a world where customers expect modern features, such as mobile compatibility, chatbots, notifications, or analytics. However, delivering these functionalities requires a tremendous amount of power, leaving your organization constrained as to what functionality can be added to enhance the user experience.

Customers aren’t interested in the complexities of your IT infrastructure when transacting online with your business. If they have a poor experience with long load times or service unavailability, they will quickly lose confidence and worst-case scenario, may decide to buy from a competitor. Persevering with legacy technology puts the user experience at risk, which subsequently tests the loyalty of your customers.

As a means of operating your IT stack more efficiently, you should consider building with composable architecture, a modular approach to managing technology characterized by breaking down applications into microservices. By decoupling applications into smaller components, you can allocate and re-allocate resources according to business needs, optimizing resource usage and reducing costs rather than running bulky applications inefficiently.

You can also rest assured that the user experience is not at risk when carrying out maintenance, as updates can be performed on individual components rather than the entire estate, which is much more efficient than working with traditional monolithic architectures.

Problematic integration

A key characteristic of an agile organization is the streamlined flow of quality data across the business, made possible by a complex network of integrations and APIs. Your developers are responsible for overseeing these integrations and managing the transfer of data, with their jobs becoming more difficult when working with legacy technology.

The development of applications can turbocharge your organization and help iron out operational inefficiencies. However, if you rely on outdated technology, the application development process becomes stunted. To remediate incompatibility issues, developers will need to painstakingly write lines of code as a fix, leaving your DevOps teams demoralized and short of time to focus on higher-priority tasks. Moreover, there may be a temptation to integrate around legacy systems. But in the long term, your IT infrastructure will suffer as the temporary workaround becomes embedded in your organization’s processes, leading to inefficient and siloed systems.

Risk of repercussions

Businesses are morally obliged to protect data subjects, whether those are employees, partners, or customers. As data controllers, all companies are subject to strict compliance and regulatory standards such as GDPR and ISO 27001, which govern data handling best practices and must be upheld.

Under this level of scrutiny, organizations that use legacy equipment need to be particularly wary of exposure to unmitigated levels of risk. Outdated equipment runs on older and unsupported technology, and if data is stored and processed via legacy equipment, it leaves a vector that unauthorized personnel can exploit.

It must be added that laws and regulations change regularly, and the chances of legacy equipment not meeting the standards of new stipulations are very high. This leaves your company in the difficult position of having to navigate the minefield of satisfying mandatory regulations whilst maintaining legacy equipment, which almost always involves spending money on resources that can help circumvent the vulnerabilities of legacy technology.

Failure to adhere to regulatory standards regarding data handling is severe. An infringement of GDPR could land your company a fine of up to €20 million or 4% of the business’s total annual worldwide turnover. However, it’s the reputational damage that is more far-reaching, with the loss of credibility and consumer faith discouraging future business.

Failing to address security vulnerabilities

When analog equipment is no longer supported, it becomes more vulnerable to cyberattacks. Companies cannot afford to overlook vulnerabilities in legacy systems. Legacy IT equipment dominates certain industries, with more than 73% of healthcare providers using medical equipment that runs on a legacy OS, according to Kaspersky’s 2021 Healthcare report. This leaves a huge threat surface for cybercriminals to exploit.

To mitigate the susceptibility of legacy equipment to cyberattacks, companies should implement network segmentation to isolate legacy systems from critical infrastructure and data. However, maintaining any legacy equipment is a ticking time bomb when it comes to security vulnerabilities. It is important to start looking at a full cloud migration so that your security partners can ensure that all systems are kept fully up to date against the latest threats.

Change management

One thing that cannot be denied about legacy technology is that it stands the test of time, making it a suitable proposition for many companies. But when the reliance on legacy technology becomes so entrenched in your ability to function as an IT operation, alarm bells should be ringing.

First of all, finding people who are skilled in the upkeep of old equipment can be very difficult, and as an organization, you become dependent on the familiarity of staff who have been around since the introduction of the legacy technology. With increasing staff turnover rates, however, you may be in the vulnerable position of losing the knowledge base as staff retire or leave the business. It is important that the knowledge of how to operate all technology is not kept to a select few but is documented and distributed across the entire organization as part of a contingency plan.

A drain on resources

Older equipment is less energy efficient than modern alternatives, leading to higher operational costs and a challenge in reaching any goals to reduce carbon footprint. If your organization uses legacy equipment, you need to keep on top of all the associated costs, not just in terms of maintenance but also security patches and having qualified people in place. This is a common issue. By persevering with legacy technology, the UK government could spend between £13 billion to £22 billion on maintaining old systems between 2021-2026, 50% of the IT budget.

Then, there is the issue of meeting sustainability goals. One unfortunate consequence of legacy equipment is that it typically uses more energy than modern cloud technologies, leading to higher carbon emissions. Organizations are increasingly aware of their carbon emissions and need to pursue strategies that reduce reliance on low-efficiency practices. Employing software that can measure your energy usage and automate power saving when equipment is not in use, for example, is a great way of reducing the environmental impact of your business.

It’s this type of thinking that should govern any business’s approach to managing its technology. Rather than finding reasons and workarounds to keep legacy equipment alive, which will slowly drain your business profitability, the question should be, ‘What is the most efficient way for the business to operate?’ to which the answer will most likely be found in modern new cloud-based applications.

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