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Legacy Systems Examples: How to Identify Them and Why You Really Should

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Last updated on
June 12, 2024

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TABLE OF CONTENTS

Legacy Systems Examples: How to Identify Them and Why You Really Should

Introduction 

Working with legacy solutions and incompatible, outdated processes often ends up with makeshift patches and unstable workarounds.

Hidden costs of maintaining legacy systems
Hidden costs of legacy systems. Source: State of Software Modernization 2024

Choosing quick fixes may be tempting but it has its price. Legacy solutions generate costs that are so huge that even rewriting the entire code from scratch may turn out to be cheaper.

Legacy system modernization is crucial to align with current technological standards and business needs, addressing issues such as outdated technology stacks, lack of scalability, and high maintenance costs.

But is it worth it? Omitting system updates and accumulating technical debt can put all your efforts into making your business flourish in vain. Outdated technologies and limited scalability hamper innovation, growth, and chances for success. Increasing system downtime and dealing with unhappy customers are other problems that obsolete solutions generate.

If you want to know how to identify them, check out our legacy systems examples and legacy apps examples. Also, you may see for yourself whether it’s high time for you to update or upgrade your legacy solution, or maybe you can wait.

Legacy systems: what they truly are

A legacy system can be boiled down to „any outdated computing system, hardware or software that is still in use. Legacy systems include computer hardware, software applications, file formats and programming languages”. 

Legacy solutions don’t have to date back to the XXth century, not at all. They take many forms – systems, programs, legacy apps examples, and other technologies. Types of legacy systems can be categorized based on hardware, software, infrastructure, application, database, custom-built, and end-of-life systems. What’s worse, they overlap, and that’s one of the reasons why it can be very difficult to choose modernization and clean this mess.

These applications, programs, or software might have enjoyed huge success when they first hit the market years ago, but as time moved on, they have become obsolete and outdated, making disappointed users leave them and never come back again. 

Well-known legacy system examples

Now, let’s have a look at some of the most common – or a little less obvious – examples of outdated software and legacy systems. These include:

  • Microsoft’s Windows 7,
  • Internet Explorer,
  • Intel 286 computers (used in sales terminals),
  • Visual Basic,
  • Lotus 1-2-3,
  • COBOL,
  • IBM DB2,
  • Microsoft Excel (early versions).

Microsoft’s Windows 7

Microsoft Windows 7, released on October 22, 2009, is an operating system developed by Microsoft as part of the Windows NT family. It succeeded Windows Vista and was designed to be more user-friendly, with improvements in performance, security, and compatibility.

Microsoft officially ended mainstream support for Windows 7 on January 13, 2015, and extended support on January 14, 2020. This means the operating system no longer receives security updates, leaving systems running it vulnerable to new threats.

Despite its end-of-support status, many individuals and businesses continued using Windows 7 due to its stability, compatibility with older hardware and software, and familiarity. However, the lack of updates poses significant security risks.

Internet Explorer

Internet Explorer (IE) is a web browser developed by Microsoft, first released in 1995 as part of the add-on package Plus! for Windows 95. It was once the most widely used web browser, peaking during the early 2000s.

Microsoft announced the end of support for Internet Explorer 11 across its Microsoft 365 apps and services by August 17, 2021. The browser will be retired on June 15, 2022, for most versions of Windows 10. Despite its declining use, some enterprise applications and websites still depend on IE for compatibility reasons.

Migration challenges:

COBOL

COBOL (Common Business-Oriented Language) is a particularly interesting case. Although this programming language dates back to 1959 and currently very few developers use it or want to work in it, COBOL is still extremely popular in the financial sector, with 43% of banking systems in the US built on it and 95% of ATM swipes relying on it. 

Migration challenges:

  • Code modernization: Modernizing COBOL applications or migrating to new languages can be costly and complex.
  • System integration: COBOL systems are often deeply integrated into business processes.

Legacy solutions still in use may no longer be supported, updated, or sold, have incompatible instruction sets and outdated architecture, or lack developer support. All these may result in downtime and other problems with access to services, security, or maintenance.

Legacy system examples in various industries

There’s a set of industries and branches that still use legacy systems:

1. Financial services

Many banks and credit unions still rely on mainframe systems for core banking functions, such as transaction processing, account management, and record-keeping. These systems are often based on COBOL. They are reliable and handle large transaction volumes efficiently but are expensive to maintain and integrate with modern technologies.

Examples of legacy systems in the financial industry:

For example, Erste Group Bank, one of the largest financial services providers in Central and Eastern Europe, relies on mainframe systems for core banking operations. The system has been in use for decades and handles the bank’s critical functions.

Société Générale, one of France's largest and oldest banks, has used legacy IT systems to manage its core banking operations. These systems, developed in the 1980s and 1990s, are responsible for critical functions such as transaction processing, customer account management, risk management, and financial reporting.

2. Government and public sector

Various government agencies, including tax authorities, social security administrations, and other departments, use legacy systems for managing vast amounts of data and processing complex transactions. Transitioning to new systems is challenging due to the scale and sensitivity of the data.

Government and public sector legacy systems - example:

The Internal Revenue Service (IRS) in the United States uses the Individual Master File (IMF), which is a legacy system written in Assembly Language and COBOL for tax processing and record-keeping. The system is critical for processing millions of tax returns, but it faces challenges in terms of scalability, maintenance, and modernization.

ELSTER (Elektronische Steuererklärung) is the electronic tax filing system used by German tax authorities. Parts of this system are based on older technologies and have undergone multiple updates. While ELSTER has been modernized over the years, some underlying components are still legacy systems, posing challenges in terms of scalability and integration with newer technologies.

The Austrian Social Security system (Sozialversicherung) is a comprehensive system that manages various aspects of social insurance, including health, pension, and unemployment insurance. Parts of this system are supported by legacy IT infrastructure and software applications that were developed many years ago.

The Swedish Tax Agency (Skatteverket) is responsible for tax collection, tax law enforcement, and administering various benefits in Sweden. Skatteverket has long relied on legacy IT systems developed decades ago to manage tax records, process tax returns, and handle administrative functions. Skatteverket is actively working on modernization initiatives to replace these legacy systems with more efficient, secure, and scalable solutions. Implementing legacy system modernization strategies can help mitigate risks by gradually transitioning to newer technologies while preserving critical functionality and knowledge embedded in the legacy systems.

3. Healthcare

Many healthcare institutions still operate legacy systems for electronic health records (EHR), billing, and claims processing. These healthcare software systems are often deeply embedded in daily operations and critical for compliance with healthcare regulations.

Healthcare legacy systems examples:

VistA is an EHR system used by the U.S. Department of Veterans Affairs (VA). It was developed in the 1970s and 1980s using MUMPS programming language. VistA is integral to the VA's healthcare services, but modernization efforts are ongoing to address its outdated technology and improve interoperability with other systems.

Many German hospitals use legacy Hospital Information Systems (KIS) that were implemented decades ago for managing patient records, billing, and administrative tasks. These systems are critical for hospital operations but often lack the interoperability and advanced features of modern EHR systems.

The NHS Spine is a critical infrastructure within the National Health Service (NHS) that supports various digital services and patient records across the UK. Many Patient Administration Systems (PAS), which manage patient information, appointments, and administrative tasks within hospitals, are based on older technologies and are considered legacy systems. The NHS Spine and legacy Patient Administration Systems (PAS) ensure the continuity of essential services, but their outdated technology poses challenges in terms of maintenance, integration, and security

4. Manufacturing

Manufacturing companies often use legacy systems for industrial control and automation, such as Supervisory Control and Data Acquisition (SCADA) systems. These systems manage machinery and production lines, and replacing them can be risky and expensive.

Examples of legacy software in manufacturing:

Many manufacturing plants still use Siemens S5 PLCs for automation and control of production processes. These systems were widely used in the 1980s and 1990s. While these PLCs are reliable, they have limited integration capabilities with newer automation technologies.

ABB, a Swiss multinational corporation headquartered in Zurich, is a global leader in industrial automation and robotics. Many of ABB's manufacturing plants and facilities have legacy industrial control systems, including older versions of Programmable Logic Controllers (PLCs) and SCADA (Supervisory Control and Data Acquisition) systems.

5. Transportation

Airlines and railway companies use legacy applications for reservation systems, scheduling, and ticketing. These systems have been in place for decades and are integral to operations, making it difficult to replace them without significant disruption.

Examples of legacy operating systems in transportation:

Sabre, one of the first computerized airline reservation systems, was developed in the 1960s. It is still used by many airlines for booking and managing flights.

Deutsche Bahn, Germany's national railway company, uses legacy applications for ticketing and reservations that were developed several decades ago. 

Network Rail, which owns and operates the railway infrastructure in Great Britain, uses legacy signalling systems to control train movements and ensure safety on the tracks. Some of these systems were developed several decades ago and are still in operation.

ProRail, the organization responsible for the Dutch railway infrastructure, also relies on legacy control systems for managing rail traffic and signalling. These systems have been in use for many years and are based on older technologies.

6. Telecommunications

Telecommunications companies use legacy systems for managing networks, billing, and customer relationship management (CRM). These systems are critical for maintaining service continuity and managing large customer bases. 

AT&T and other large telecom providers use legacy billing systems developed decades ago to manage customer accounts, billing, and payments. These systems are essential for handling billing operations but are costly to maintain and upgrade. Integrating them with new customer service platforms can be difficult.

Deutsche Telekom, one of Germany's leading telecommunications providers, has legacy billing systems that manage customer accounts, billing, and payments.

BT Group, a major telecommunications provider in the UK, has historically relied on the Public Switched Telephone Network (PSTN) for voice communications. The PSTN infrastructure, which has been in place for many decades, is considered a legacy software.

The huge cost of a legacy system

Of course, such serious liability to a business must have its price. The consequences of a decision to stick to legacy software are very tangible and very painful.

The cost of maintaining legacy systems. Source: State of Software Modernization 2024

But money is one thing and hidden costs are another. Some nasty surprises and interruptions of daily work and operations may occur, too. Overburdened with technical debt, a company may expect:

  • inefficient maintenance,
  • security vulnerabilities,
  • ineffective data storage,
  • stability and compatibility issues,
  • loss of employee commitment and high staff turnover,
  • reputation problems,
  • drop in customer satisfaction,
  • scalability limitations,
  • decrease in productivity,
  • lack of innovation.

Obviously, technical debt is not only the IT department’s problem. It can complicate – or even ruin – the process of running virtually any business, affecting it on all levels. There’s no system, department, process, project, or employee that wouldn’t be impacted by legacy software’s detrimental influence, leaving staff disenchanted and confused and clients – disappointed. 

<span class="colorbox1" fs-test-element="box1"><p>Also read: The Business Cost of Technical Debt. Explore the hidden cost and long-term impact of technical debt on your business's financial health and competitive edge.</p></span>

On top of that, running a business that is burdened with technical debt becomes tricky, more risky, and unpredictable. Instead of focusing on new endeavors, managers, CTOs, CPOs, and business owners often have to make quick fixes, patch holes and stop fires.

The bottom line is that many experienced engineers and other specialists, disappointed with stagnation and performance issues, decide to look for better employment elsewhere. It’s simply very frustrating to stand behind and watch competitors racing and moving forward.

Key problems with legacy systems

There are a bunch of problems with outdated systems, but 5 of them seem to be the most common:

1. Security

Problem: Legacy systems often lack modern security features and are more vulnerable to cyberattacks. They may not support the latest encryption methods, security patches, or updates.

Implications: This can lead to data breaches, loss of sensitive information, and potential financial and reputational damage. Older systems may not comply with current security standards and regulations, increasing the risk of non-compliance penalties.

2. Expensive maintenance

Problem: Maintaining outdated systems is usually more costly than modern systems due to the need for specialized skills and outdated parts.

Implications: Companies might face higher operational costs because they need to hire or retain specialized IT staff who are familiar with obsolete technologies. Additionally, procuring parts or software updates for older systems can be more expensive and time-consuming.

3. Inefficiency

Problem: Legacy systems often lack the efficiency and capabilities of modern technologies, leading to slower performance and less functionality.

Implications: This inefficiency can result in lower productivity as employees might spend more time on tasks that could be automated or streamlined with modern systems. The slow processing speed and limited integration capabilities can also hinder overall business operations.

4. Incompatibility

Problem: Legacy systems often struggle to integrate with newer systems, technologies, and software applications.

Implications: The incompatibility can create silos within an organization, making data sharing and communication between departments more difficult. It can also limit the ability to adopt new technologies and innovations that could drive business growth and efficiency.

5. Compliance

Problem: Older systems may not comply with current regulatory requirements, which often evolve to address new risks and standards.

Implications: Non-compliance can lead to legal penalties, fines, and a loss of business credibility. Organizations must invest additional resources to ensure that legacy systems meet current regulatory standards, which can be both costly and complex.

Why leaving legacy systems is so difficult

Unfortunately, many business owners and managers don’t want to acknowledge that modernization is inevitable. They keep procrastinating and postponing the decision to fight technical debt and improve the legacy system at last. Of course, this negligence has its consequences.

Accumulation of technical debt. Source: State of Software Modernization 2024

As time goes by, getting out of this mess and making the decision to modernize becomes even more difficult. Some of the excuses that we often hear are:

“I can’t afford it, there are more important expenses”

Spending money on something that still (but often barely) works may seem to be wasting it. There are and always will be other urgent needs. And system updates and modernization may be indeed a major expense.

However, negligence in this regard is way more expensive and may end up with bankruptcy or, for instance, a system crash that leaves hundreds of thousands of clients angry and frustrated. In many cases, fighting technical debt is actually a fight for survival.

“I don’t know what to start with”

Very often, the process of system modernization seems to be too hard and overwhelming. But getting down to work is the most difficult step and things can only get better. Even the outcomes of many years of neglect can finally be eliminated – with the right helping hand.

Every modernization project needs to start with a detailed strategy and a legacy application modernization roadmap. It helps to navigate the whole process swiftly from the very beginning. The roadmap starts from evaluating the legacy system and defining the problems to writing a risk management plan and establishing KPIs. 

“Modernization will paralyze my business for ages”

When it comes to new system implementation, data migration or conversion, it may be difficult to perform everything at once – but, luckily, you don’t have to. You can modernize your legacy system with professionals who know how to do that to keep your business on track in the process

Choose a partner with vast experience in implementing gradual, risk-reducing, and disruption-minimizing strategies that easily replace legacy systems and applications with new ones. This successful method, called the Strangler Pattern, is especially helpful in the case of complex, critical systems.

Legacy systems: should they stay or should they go – a checklist

Pushing the limits is not always a good idea – and checking if your obsolete systems or apps will endure another month more certainly belongs to this group. Here, you may check if you have to get down to the modernization work urgently, or can wait a bit more. 

Answer these questions:

1. Is my legacy system still supported?

2. Is it resistant to online security threats?

3. Is it compatible with other tech solutions that my company uses?

4. Does it rely on popular technology, with engineers specializing in it easily available?

5. Was it developed with the agile approach in mind?

6. Can my app run on multiple platforms?

7. Can I add new features smoothly?

8. Are maintenance costs OK for me?

If you answered NO to any of these questions, you have to dig deeper to assess the actual organizational need and readiness for a change. If you’re still not sure, check out top legacy modernization companies that might be helpful in this respect. 

Examples of legacy systems – key takeaways

In the digital era, it only takes a few years for a system to become obsolete. This entails many problems and huge costs that can only rise in the future. In turn, both the support and the possibilities to integrate with new technologies smoothly will tend to become even more limited.

And there are security vulnerabilities and weaknesses. It’s good to remember that contemporary security threats are more severe in the case of legacy systems as the latter were not designed to handle modern attacks and often lack advanced encryption protocols, firewalls, and security tools. 

If you’re not in full charge of things – and that’s the case of running a business with technical debt – they can simply take you in any direction, not necessarily the most desired one. It’s obsolete, legacy systems that drag your company down – and not attempts to make them more modern. 

Brainhub professionals know exactly how to fight technical debt in businesses of all sizes and industries. We have completed many software modernization projects and one of them concerned updating 3 applications for a global consulting company. 

Legacy systems examples can be found everywhere – using legacy solutions is a common and very serious problem that calls for bold decisions and meticulous execution. Controlled transition and continuous improvement will let you unlock your organization’s true potential and get on a fast track to success.

Still not sure whether you should update your system now, or maybe you can wait? Made up your mind and want to choose a top software modernization company? If you’d like to be on the safe side and make sure the process of modernization goes smoothly, contact Brainhub now.

FAQ: Legacy systems examples

What is considered a legacy system?

A legacy system refers to outdated computer systems, software applications, or technologies that are still in use despite being superseded by more modern alternatives. These systems were often developed using now-obsolete technologies but remain operational because they continue to perform critical business functions.

Why do companies still use legacy systems?

Companies continue to use legacy systems because they often erform essential functions reliably and have a proven track record of stability. For industries like banking, healthcare, and utilities, these systems are integral to daily operations. Any disruption caused by replacing or upgrading these systems could impact business continuity and lead to significant downtime. Also, replacing legacy systems with modern alternatives can be prohibitively expensive. This includes the costs of new hardware, software, training, and potential business disruption.

How many companies still use legacy systems?

According to Forbes, over two-thirds of businesses still use legacy apps for core business operations.

What is an example of legacy ERP system?

An example of a legacy ERP (Enterprise Resource Planning) system is SAP R/3. It was first released in 1992 and became one of the most widely used ERP systems globally. It was designed to handle a wide range of business processes across various industries, including finance, human resources, manufacturing, supply chain management, and sales.

What is an example of a legacy database?

An example of a legacy database is IBM's IMS (Information Management System). IMS is a hierarchical database management system (DBMS) as opposed to the more common relational databases like Oracle or SQL Server. It includes two main components: the IMS Database Manager (IMS DB) and the IMS Transaction Manager (IMS TM).

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Authors

Olga Gierszal
github
IT Outsourcing Market Analyst & Software Engineering Editor

Software development enthusiast with 6 years of professional experience in the tech industry. Experienced in outsourcing and nearshoring market analysis. Our expert in presenting tech, business, and digital topics in an accessible way.

Leszek Knoll
github
CEO (Chief Engineering Officer)

With over 12 years of professional experience in the tech industry. Technology passionate, geek, and the co-founder of Brainhub. Combines his tech expertise with business knowledge.

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