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Essential guide to application modernisation

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Legacy systems holding back 90% of businesses

Most businesses are being held back from making digital advances by their reliance on legacy applications

Nine out of 10 IT decision-makers claim legacy systems are preventing them from harnessing the digital technologies they need to grow and become more efficient.

Research commissioned by Hitachi Consulting also found that legacy business intelligence and analytics systems, customer databases and workflow and document management systems are first in line to be removed.

The Vanson Bourne survey of 100 IT leaders at businesses with more than 1,000 staff also found that legacy systems are considered a barrier to projects by about a third of respondents.

Large businesses in the financial services and retail sectors are examples of companies trying to introduce digital technologies in the face of competition from new, more agile competitors. These organisations have legacy systems that have become complex to manage after decades in use.

According to the research, large companies were also more likely to claim to be held back by legacy systems, with 44% saying it affects every or most projects, compared with 28% for medium-sized firms.

Chris Saul, vice-president of digital, Europe, Middle East and Africa, at Hitachi Consulting, said: “Ask any IT director or CIO and they’ll probably tell you they’re envious of startups that have a greenfield to build their IT infrastructure.”

But he added that “bulldozing” is rarely an option. “IT leaders need to find ways of introducing new applications, services and approaches – and do so quickly, with the ability to scale,” he said.

Read more about legacy IT systems

Banks are probably the best example of why businesses cannot simply rip out legacy IT systems. Each product they sell will be supported by a system made of hundreds of individual components and thousands of interdependencies. A small change to one system of component can have huge knock-on effects. That is why banks are cautious about taking on a five-year legacy replacement project that might not offer a return on investment.

In the survey, 28% of respondents said they wanted to rip out legacy business intelligence and analytics systems and start again, 26% said the same for customer databases, and 25% for workflow and document management systems. At a recent Computer Weekly CW500 Club event, three CIOs discussed the challenges of removing business complexity by replacing legacy systems.

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