The manufacturing facility, located in Orange County California, is a hodgepodge of buildings that span three long blocks. The sprawling campus has grown organically overtime. The owners added the buildings, departments, and people as needed.  

Inside, the facility houses a legacy ERP system that was built by the original owner, and, like the building, added to over time. Twenty years ago, it was the best-possible solution to their technical and business problems. Today, however, these systems are fragile, cumbersome, and costly to maintain. 

It is a familiar story for manufacturers who have been around for more than a decade. Running old servers and applications that are no longer supported by vendors, yet are critical to the operation. 

However, there are 4 reasons why your legacy systems are likely to be a financial burden and even detrimental to your business. 

1. Security Concerns

Legacy systems are a security liability if your IT team has had to forgo patching. This can happen for many reasons: perhaps they fear breaking the system, the vendor no longer supports the version being used, the person who wrote the code has retired, or for budgetary reasons, your IT team is short staffed. 

Whatever the reason, having legacy systems with unpatched applications is like leaving the front door of your home open with the key still in the lock. 

The total business cost of a data breach for a small business with under 250 employees is $48,686 and increases with the size of the organization. [1]  This number however, doesn’t include the long-tail costs of a breach. 

Long-tail costs include customer turnover (imagine having to tell your customers, vendors, or employees that you lost their information), tarnished reputation which will make it difficult to acquire new customers, and unfilled orders and back-orders due to lost production time. 

2. Eventually, It Breaks 

IT systems should constantly be reviewed and reevaluated to ensure that the loss of such a system doesn’t impact your ability to conduct business. 

For example: A distribution client hired us to perform their email migration. What should have taken three weeks to complete took three months due in part to their 10-year old Exchange server. The server didn’t have enough resources to support the migration and the employees at the same time. Eventually, we had to purchase more memory for the old server in order to complete the migration which increased both their hardware and service costs.  

3. Inability to Compete

Running your operation on legacy hardware and software may make it more difficult for your business to stay agile and competitive.

For example, Microsoft will end extended support for Windows 7 in January 2020. Microsoft is pushing for businesses to move to another solution. One example is to use their Azure cloud environment. To incentivize businesses to make this move, they are making it expensive for anyone running this version of Windows to remediate issues. 

Over time, a situation like this one will increase operating costs and may take valuable resources away from your sales, marketing, or production budgets. 

4. Limited Scalability

Legacy systems will inhibit your ability to quickly scale your business making you less competitive. For example, imagine that you have finally won the contract you’ve been chasing for three years only to discover that you are unable to scale and accommodate it. 

What You Can Do Today

There are three cost-effective measures you can take today to create a more efficient, secure, and profitable infrastructure.

1. Take control. Don’t wait for an application or piece of critical hardware to be unstable before replacing it. Instead take control and create a life-cycle management plan based on your long-term business needs and appetite for risk. That is, it is important to calculate the risk associated with waiting to replace a critical piece of equipment.

2. Communication. A recent study conducted by the Ponemon Institute showed that disparate IT and security solutions increases costs unnecessarily. 

So, it’s important to design a solution that is specific to your business objectives. To do this, make sure that your IT and Security departments understand your strategic short term and long terms business goals. Together you can create a solution that makes business sense. 

3. Look for savings in other departments and apply them to your operational needs. For example, we helped a customer save $131,000 per year in operations’ costs by bringing in a partner who audited and streamlined the company’s internet and phone bills.

With good planning, communication, and let’s face it, a bit of luck, you can wean your operation off your legacy systems and create an infrastructure that will support your business objectives for years to come.



Guest Author;
Krista Magdison
VP of Sales & Marketing



[1] “Underserved and Underprepared: The state of SMB Cyber Security in 2019” Vanson Bourne & Continuum.