The cost of legacy software for project-based organisations

Curious about the price tag attached to keeping project-driven organisations afloat on legacy software? Many still cling to these outdated solutions for various reasons. But here’s the burning question: What’s the financial toll of maintaining and supporting these legacy systems?

What is legacy software?

Legacy systems refer to outdated computer systems, software applications, and technologies that use obsolete programming languages and hardware components, rendering them challenging to maintain and scale. This is because the underlying technology often proves difficult to update.

Many companies are reluctant to upgrade because of the time and cost involved. However, ithe expense of maintaining these legacy systems may surpass the costs associated with upgrading.

The actual cost of legacy IT

As per the United States Government Accountability Office, the annual operational and maintenance cost for ten of the government’s legacy systems stands at approximately $337 million. Across various industries, an average of 60-80% of IT budgets is directed towards sustaining legacy systems.

Why should you upgrade your outdated system?

Siloed applications vs. an all-in-one solution

One compelling reason to upgrade legacy IT lies in the substantial cost associated with managing a multitude of third-party applications to meet project-centric requirements. While project-driven organizations may rely on a legacy ERP system like Microsoft Navision, they often find themselves filling gaps with numerous add-on third-party apps or even Excel sheets for tasks such as time keeping, accounting, project management, reporting, and more.

Not only does the use of siloed solutions introduces inefficiencies, errors, and inaccuracies into the workflow, but it also arises a challenge when these applications require manual or custom integration. Take, for instance, Microsoft Navision, a product developed in the mid-1980s,and favored by many project-driven organizations. Finding consultants proficient in this system is a rare feat, and their services come at a premium.

Security expenses

Outdated systems pose a potential vulnerability to cyber-attacks, primarily due to the absence of modern security features in legacy software and hardware. If you’ve ever experienced the aftermath of a cyber-attack, you’re well aware of the substantial costs involved in cleaning up the mess. During this recovery period, businesses may also face revenue loss while striving to resume normal operations.

A noteworthy cost factor in maintaining legacy systems is related to security patches. This cost is significant not only due to its immediate impact but also because it tends to escalate over time. Moreover, end users might have take specific actions to install these updates, making it more difficult to safeguard against data breaches and other security threats.

Growth limitation

As your company undergoes growth, a critical question arises: Can your legacy application effectively support the growing scope of business operations? Your software will probably struggle to keep pace with the evolving needs of your business. Legacy code becomes a bottleneck, impeding your ability to meet customer demands and achieve desired business growth.

The remedy lies in providing access to an advanced cloud-based IT architecture capable of seamlessly managing expanding needs and operational scaling. Modern systems empower you to manage data more effectively, integrate systems for optimised processes, and stay agile in seizing opportunities ahead of competitors.

Project deadline constraints

Meeting project deadlines poses a significant hurdle for many project-centric organisations grappling with outdated systems. They often fall short in assisting with the effective management of budget, scope, and timely deliverables for clients. The consequenses can be fatal, including the risk of incurring fees and penalties outlined in contractual agreements, along with the potential loss of valuable clients. The difficulty in accessing data further amplifies the threat of missing critical deadlines.

A modern ERP and project solution can empower organisations to define project budgets and monitor actual costs versus budget in real-time. This proactive approach to project management ensures projects remain within budgetary constraints, fostering timely delivery of projects.

Comprehensive tracking of billable hours

Efficiently managing billable hours is the lifeblood of any project-driven organisation. However, with a legacy software in place, firms encounter significant obstacles in effectively handling project staffing, hours and expenses logging, and obtaining real-time insights into resource utilisation and availability.

Even seemingly minor issues, like employees forgetting to log billable hours or submit reports promptly, can erode profitability. On top of this, tracking utilisation against actual billings empowers project managers to identify disparities between forecasted work and actual performance. The key lies in comprehensive tracking at every level—across individuals, projects, and the entire portfolio.

Now we can really understand where people are spending their time, where our revenue is, and what needs to be improved. When we had standalone systems, we couldn’t do that.

Sean Looby
Head of Operations at Cafico International

Upgrade to Microsoft Dynamics 365 Business Central with Advanced Projects

Microsoft Dynamics 365 Business Central stands out as an all-encompassing cloud-based ERP solution designed for small to mid-sized businesses. It seamlessly connects sales, service, finance, and operations, enabling businesses to operate more intelligently, adapt swiftly, and enhance overall performance.

Return on investment

The impressive return on investment (ROI) of Dynamics 365 Business Central is underscored by a recent Forrester study, revealing organisations typically experience a 162% ROI over a three-year period.

However, for project-driven organisations, Microsoft Business Central alone may not encompass all the necessary functionalities. Enter Advanced Projects, catering specifically to the needs of project-driven businesses to ensure the profitability of every project.

Widely trusted across the professional services industry, Advanced Projects aids in project accounting, project management, project resource management, and project reporting. Crafted by industry experts, Progressus understands the intricate requirements of businesses in this domain. Notably, it supports remote work environments and is accessible 24/7 via the cloud.

Undertaking an IT modernisation project positions your business strategically. It’s not just an upgrade; it’s a forward leap towards staying ahead in a dynamic marketplace.

Interested in learning more? Check out our ERP guide for project-based companies. 👇

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