The true cost of maintaining legacy systems

For many organisations, legacy systems are a necessary burden. While they continue to serve a purpose, the cost of maintaining outdated IT systems is often far higher than businesses realise. Beyond direct expenses like infrastructure and software, hidden costs accumulate over time, impacting efficiency, compliance, and long-term business agility. This article explores the true financial and operational impact of maintaining legacy systems and why system decommissioning can be a cost-saving strategy.

1. Infrastructure and operational costs

One of the most obvious costs of maintaining a legacy system is the physical infrastructure required to keep it running. Many older systems operate on outdated hardware that is expensive to maintain and may be difficult to replace.

• Hardware maintenance – Older servers and storage systems require ongoing maintenance, and finding replacement parts can be both costly and time-consuming.
• Energy consumption – Legacy systems often run on inefficient infrastructure that consumes significantly more power than modern alternatives.
• Data centre expenses – Hosting and maintaining legacy systems in on-premise data centres means ongoing costs for cooling, power, and space allocation.
• Disaster recovery and backup – Ensuring high availability and data protection for legacy systems requires additional infrastructure investments.

With modern cloud-based alternatives offering scalable, cost-effective solutions, continuing to maintain legacy systems often represents an unnecessary financial drain.

2. Software licensing and support fees

Legacy systems frequently require continued investment in licensing, support, and maintenance fees, even though they no longer offer full business value.

• Vendor support contracts – Many software vendors discontinue support for older applications, meaning businesses must pay for expensive extended support contracts or risk running unsupported software.
• Operating system and database licensing – Legacy applications often run on outdated OS or database versions, requiring additional licensing costs.
• Security patching and updates – Maintaining compliance and security in unsupported systems requires costly manual updates and monitoring.

3. Staff costs and knowledge retention

The workforce required to maintain and operate legacy systems often represents a significant ongoing cost.

• Specialist staff retention – Many legacy systems require expertise in outdated technologies, meaning businesses must retain expensive, specialised staff.
• Productivity losses – Time spent troubleshooting, patching, and manually maintaining legacy systems reduces IT staff availability for strategic innovation projects.
• Knowledge gaps and skills shortages – As employees with legacy system expertise retire or leave, businesses face increasing costs for knowledge transfer and upskilling.

4. Compliance and security risks

Running outdated, unsupported systems poses serious security and compliance risks that can lead to financial penalties and reputational damage.

• Cybersecurity vulnerabilities – Legacy systems often lack modern security protocols, making them prime targets for cyberattacks.
• Regulatory non-compliance – Older applications may not meet current data protection laws (e.g., GDPR) and could fail audit requirements.
• Data breaches and downtime costs – If an unsupported system is compromised, the costs of recovery, fines, and reputational damage can be significant.

5. Opportunity cost: the impact on business growth

Beyond financial expenditure, maintaining legacy systems has an opportunity cost—preventing businesses from investing in modern solutions that drive growth and efficiency.

• Delayed digital transformation – Holding onto outdated technology prevents businesses from adopting new, cloud-based, and AI-driven solutions.
• Slower business processes – Legacy systems often require manual workarounds and integration efforts, reducing overall productivity.
• Inability to scale – Outdated systems limit the ability to scale operations, adapt to changing business needs, and improve customer experiences.

The financial case for system decommissioning

Organisations that decommission legacy systems often see significant cost reductions and operational improvements. A structured decommissioning project allows businesses to:

• Eliminate infrastructure and maintenance costs.
• Enhance security and compliance with modern alternatives.
• Free up IT resources for innovation and strategic initiatives.
• Reduce carbon footprint by moving away from power-hungry legacy hardware.

When is the right time to decommission?

If your business is spending more on maintenance than on innovation, facing increasing compliance challenges, or struggling with security risks, it may be time to consider system decommissioning.

For a deeper understanding of the strategic and financial benefits of decommissioning, explore our complete guide to system decommissioning.