A great number of Malaysian companies’ systems are outdated. Their dependence on legacy systems is causing severe problems in their daily business operations. Legacy systems are costly to maintain, and one of the reasons is that legacy systems need niche talents to fix their issues.
Hence, corporations allocate more than 55 per cent of their IT budget to maintain existing mainframe legacy systems. Legacy systems are also often rigid and inflexible, incapable of adapting to the market dynamic. Their inability to integrate with modern systems poses a problem for modern problem-solving.
Consequently, this causes an inefficiency in performance, being much slower in comparison to its modern counterparts. These outdated systems are still being used by Malaysian companies, even Fortune 5000 companies, due to the companies’ inaction towards digitalising their business processes. This is evident when 68 per cent of companies mentioned that legacy systems are a significant barrier to digital transformation to provide modern solutions.
This article highlights the reasons why Malaysian companies still rely on legacy systems and are unable to modernise their business systems. Furthermore, a potential solution may be introduced to be used to overcome the conversion from legacy systems to modern systems.
The slow technological adoption rate of Malaysian companies
Malaysian companies have always been considered the late majority in the technology adoption life cycle. This is evident when 79 per cent of companies in Malaysia are still lagging in digital agility. The low adoption rate for new technologies is caused by a lack of talent acquisition and talent retention, affecting the top management of the company and company readiness, causing the companies to be heavily unadaptable.
The lack of focus on digital literacy by companies leads to sluggish technology adoption and an unprepared workforce, resulting in the employees’ inability to familiarise and adapt to technological changes.
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In addition, there is an absence of an in-house innovation driver or champion on the company’s side that can consolidate internal challenges and work together with solution providers, which can be attributed to the lack of talent in the industry. Malaysian companies also have concerns about the transition between legacy to modern systems, with problems including:
- Perceived high transition time required
- Fears of failure
- High retraining costs
The incapability of legacy systems to adapt to modern systems
Compatibility issues
Legacy systems face compatibility issues since they are traditionally not built to function with modern systems, applications, or platforms with more storage and faster processing speeds. This leads to potential data loss and system failures.
The interoperability between systems may also prove to be a barrier to modernisation. This is due to legacy systems requiring proprietary protocols and interfaces that may not align with the communication standards and protocols used in modern systems.
As a result, this leads to potential issues such as communication and data exchange failure. Due to the nature of legacy systems, procuring compatible software that aligns with an outdated legacy system poses challenges and limits the range of options accessible to your business.
Security concerns
A major problem with legacy systems is that they lack security updates and features, causing businesses to be vulnerable to potential security breaches. For example, in July 2019, credit-reporting company Equifax had to pay up to US$750 million for a 2017 data breach that compromised the personal information of approximately 147 million people.
Outdated software components, inadequate encryption methods, and the absence of modern security controls make legacy systems prime targets for exploitation by cybercriminals. Furthermore, the security patches of legacy systems are no longer available as software vendors may have discontinued the support for these systems.
High-cost considerations
Maintaining and supporting legacy systems can be costly, as it may require specialised knowledge and expertise. As software or hardware ages and experts diminish, the costs of support and modernisation for legacy systems rise, making them less profitable and potentially leading to customer dissatisfaction and reduced sales.
Moreover, the process of modernising and replacing legacy systems can involve extensive reengineering, redevelopment, and testing efforts, requiring a substantial amount of allocated resources. Consequently, straining organisational budgets and workforce resources.
Lack of scalability and integration capabilities to other systems
The legacy system is unable to scale up or down to meet changing business needs, hindering growth and flexibility. This limitation contrasts with the scalability offered by cloud-based solutions, impacting a company’s ability to adapt to market demands.
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Application and data integration acts as the nervous system in the modern business body, ensuring a seamless flow of information and data storage. Achieving synergy between the divergent methods of both legacy and modern systems necessitates complex synchronisation, ensuring data consistency without sacrificing speed or accuracy.
How do we solve the issue of modernising legacy systems?
Incorporating martech solutions to digitalise businesses
Addressing the limitations of adapting to newer technologies, the Marketing Technology (martech) industry has emerged as a solution provider, offering a more convenient and accessible outcome.
Martech companies are experts in scaling brands and providing a solution that helps digitalise businesses. Incorporating martech solutions can significantly contribute to business success in several ways:
- Improved marketing efficiency
- Improved business management
- Agile campaign management
- Cost efficient
By utilising proper martech and solutions, companies can have an easier time converting their legacy systems to modern systems. This not only eases the employees’ adoption of modern technology but also saves costs and time to implement, leveraging on our digital solutions.
However, it is undeniable that every business has its own requirements for a solution. The solutions that martech provides are not only personalised but also customisable to the organisations’ wants and needs. Martech solutions is able to cover the following services: digital marketing, data management and analytics, tech integration and development, and marketing automation.
In conclusion
Malaysian businesses possess ample opportunities to transform and compete effectively with established digitalised enterprises. By integrating martech systems into their operations, Malaysian businesses can proactively adapt to market dynamics and capitalise on trends that have proven successful for foreign competitors. This strategic approach not only facilitates digital transformation but also positions Malaysian businesses to be able to compete with other successful companies.
Therefore, the adoption of modern systems and the discarding of legacy systems by Malaysian companies require an effective approach. Martech solution providers, such as OpenMinds, show a practical and realistic way of destroying legacy systems by converting them into a more digital and modern approach. It is crucial for Malaysian businesses to transition towards a digital framework to stay competitive and relevant in today’s rapidly evolving business landscape.
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