What Are the Overall Benefits of Application Modernization?
Legacy system modernization provides a wealth of benefits for systems across industries. Switching to more updated systems can produce the following benefits:
Gives Businesses a Competitive Advantage
Even if a company uses updated business practices, failing to modernize its IT systems could cause it to fall behind other companies in its industry. However, using the latest, most innovative enterprise software within business practices gives business owners an advantage over other companies in their industries.
Creates Opportunities for Future Growth
Legacy systems drastically hinder a business’s success and growth. Transitioning core business operations to an updated system can improve efficiency, allowing companies to focus more on development than maintaining existing processes.
Minimizes External and Internal Security Breaches
Outdated legacy systems typically do not contain the infrastructure necessary to protect business data against modern data breaches and cyber attacks. Internal and external security breaches are rampant among legacy systems. Employees and hackers alike can steal company data through these systems without businesses even realizing it.
However, when businesses modernize legacy systems, they often update their software to include modern security practices that keep their information safe against breaches.
Bridges the Gap Between Customer Expectations and Current Practices
According to a State of the Connected Customer report from Salesforce, 75% of customers expect businesses to use new technologies and updated practices in their business models. Even if customers do not see a business’s legacy systems, they can often tell that the company does not use modern practices through the work it produces from its legacy technology.
Updating legacy software is an important way to bridge the gap between expectations for a business and that business’s actual practices, creating more significant customer satisfaction.
Reduces Software Costs and Maximizes Profits
Many businesses running legacy software do not realize how costly it can be to use this outdated technology. However, companies that use outdated technologies tend to dedicate most of their IT budget to maintaining these systems, wasting money they could devote to growth and advancement.
One example of the steep running costs of these outdated legacy systems involves the Internal Revenue Service. The IRS still uses IT software that is close to 60 years old. On Tax Day in 2018, the organization failed to process electronic tax returns due to a legacy system error. This mistake was costly for the organization to correct.
Modernization improves business value, leading to better profits and financial growth in the long run. Legacy system migration allows businesses to
- Adopt more modern processes
- Improve efficiency
- Reach more customers
- Increase business value
Legacy system modernization not only saves money previously dedicated to maintaining outdated software.
Optimizes Data Analytics
Modernizing legacy systems gives businesses a newfound opportunity to begin using data-driven business models. Modern accounting software, for example, presents insightful data trends that financial institutions can use to improve customer experience or tailor their approaches strategically.
If businesses do not currently take advantage of data analytics, they can incorporate this new approach into their modernization journeys.