10 Signs It's Time to Upgrade Your IT System
blog/10-signs-its-time-to-upgrade-your-it-system
2024-09-26
Switching to a new IT system can be daunting. Many businesses hesitate because of the cost, complexity, and disruption that may come with it.
It’s often easier to stick with a system that “works”, rather than invest in something new. However, this hesitation can lead to bigger problems down the road, including inefficiencies and missed opportunities.
Recognizing the signs that it’s time to upgrade can save your business time, money, and help your company maintain a competitive edge.
How Do You Know When It’s Time to Upgrade Your IT System? Here’s 10 Signs.
1. Frequent Downtime
Constant system crashes or regular downtimes are clear indicators that your IT infrastructure is no longer meeting your needs.
Downtime affects productivity and client satisfaction, costing businesses an estimated $700 billion a year in lost productivity.
Example:
Delta Airlines (2016)
In August 2016, Delta Airlines experienced a catastrophic IT failure caused by a power outage that crippled its legacy systems.
The outage resulted in more than 2,000 canceled flights, disrupting travel for thousands of passengers and costing Delta approximately $150 million in lost revenue.
The event underscores how a continued reliance on aging infrastructure can jeopardize an entire operation, not just in lost profits but also in long-term brand reputation.
2. Sluggish Performance
If your system is slow to respond or process requests, it’s likely overburdened or outdated.
A slow system can frustrate employees, reduce efficiency, and result in a lackluster user experience.
According to a study by Riverbed, slow applications cost companies $3 million in annual productivity losses.
Example:
Target’s Black Friday Crash (2015)
During the busiest shopping day of the year, Target’s website collapsed under the weight of increased traffic.The sluggish performance of their outdated IT infrastructure caused the site to crash repeatedly, leading to missed sales and frustrated customers.
This highlighted the importance of ensuring that systems are not only scalable but responsive to peak consumer demand.
3. Lack of Integration Capabilities
Today’s businesses rely on a range of platforms that need to work together seamlessly.
If your IT system doesn’t support modern integrations like cloud-based tools or automation software, you risk lagging behind your competition.
In fact, 69% of businesses say legacy systems prevent the use of modern technologies like AI and IoT.
Example:
Borders’ Outsourcing Misstep
Borders Books outsourced its e-commerce operations to Amazon instead of integrating an online sales platform into its own systems.By failing to develop and manage an integrated IT system in-house, Borders handed over a significant portion of its market share to a competitor, contributing to its eventual bankruptcy.
4. Poor Security and Compliance
Cyber threats are constantly evolving, and outdated IT systems are far more vulnerable to attacks.
A report by Cybersecurity Ventures predicts cybercrime will cost the world $10.5 trillion annually by 2025.
If your system isn’t meeting current security standards or industry compliance requirements, your business is at significant risk.
Examples:
Equifax Data Breach (2017)
One of the largest data breaches in history, Equifax’s 2017 incident exposed the sensitive personal information of 147 million people.The breach was caused by unpatched security vulnerabilities in the company’s outdated systems.
This colossal failure in compliance and cybersecurity not only cost Equifax $1.4 billion in settlements but also irreparably damaged consumer trust.
Example 2: Target Security Breach (2013)
Target's point-of-sale system was compromised due to outdated security measures, resulting in the theft of 40 million customer credit and debit card details.The breach exposed the critical vulnerabilities of legacy systems in a modern cyber-threat landscape and ultimately cost the company $18.5 million in settlements and long-term damage to its reputation.
5. Inability to Scale
As your business grows, your IT system should grow with it. If your infrastructure can’t handle an increasing volume of users, transactions, or data, it's holding your business back.
Research shows 70% of scaling businesses struggle with legacy systems because they can’t support new demands .
Examples:
Myspace’s Fall to Facebook
Myspace was once the leading social media platform, but as user demand grew, its outdated IT infrastructure struggled to handle increased traffic and content uploads.Unlike Facebook, which built its systems with scalability in mind, Myspace's inability to evolve its architecture led to a significant loss in market share and eventual irrelevance.
Example 2: Blue Apron’s Operational Struggles (2018)
Meal-kit delivery company Blue Apron experienced rapid growth, but their legacy IT systems couldn’t scale to meet the increased demand.This resulted in operational inefficiencies, delayed shipments, and frustrated customers, leading to a sharp decline in stock value.
Their inability to scale their systems in line with business growth hindered their long-term success.
6. Vendor End-of-Life Notice
If your software vendor announces the end of support or updates for your system, it’s time to start planning an upgrade.
Unsupported systems often experience higher failure rates and security risks. Gartner reports that 72% of IT budgets are spent just on maintaining legacy systems.
Example:
Windows XP End of Life (2014)
When Microsoft announced the end of support for Windows XP, many businesses delayed upgrading.Those that continued using the outdated operating system faced increasing security vulnerabilities and compatibility issues.
The lack of ongoing patches and updates meant that these systems were exposed to higher risks, with some organizations experiencing major disruptions due to cyberattacks on their unpatched XP systems.
See More: Legacy ERP Systems and 10 Reasons to Consider a Digital Transofrmation
7. High Maintenance Costs
Older systems often require specialized technicians and expensive patches to stay functional.
When maintenance costs become excessive, it's usually a sign that upgrading to a more modern system will be more cost-effective in the long run.
According to Deloitte, 57% of organizations spend more on maintaining outdated systems than on investing in new technology.
Example:
NHS IT Systems in the UK
The National Health Service (NHS) has long been burdened by outdated IT systems that require significant investment just to remain operational.Legacy software and infrastructure incur substantial maintenance costs, with billions of taxpayer dollars spent each year on patching and repairing rather than upgrading to more efficient, modern systems.
This has led to inefficiencies and a backlog of digital transformation initiatives.
Learn more here.
8. Limited Mobility
With the rise of remote work, employees need access to systems from anywhere, at any time.
If your IT system doesn’t support mobile or remote access, it’s limiting your team’s productivity and flexibility.
Studies show that companies that enable remote work see a 77% increase in productivity.
Example:
Yahoo’s Missed Mobile Opportunity
Yahoo, once a leader in the online world, failed to adapt its systems to the mobile-first environment that emerged in the 2010s.Their legacy IT infrastructure couldn’t support the shift to mobile platforms, allowing competitors like Google and Facebook to overtake them in terms of user experience, ultimately leading to Yahoo’s decline as a dominant force in tech.
9. Poor Data Management
Data is the backbone of modern business, but older systems often struggle to organize, process, or store data efficiently.
If your IT system makes data management cumbersome or fails to deliver useful insights, it’s time to consider an upgrade.
A survey by NewVantage Partners revealed that 91% of executives cite legacy systems as the primary barrier to leveraging data.
Examples:
U.S. Department of Veterans Affairs (VA)
The VA has struggled for years with outdated data management systems, leading to significant delays in processing veterans' claims.The inability of the legacy IT infrastructure to manage and analyze large volumes of data efficiently has caused backlogs and hindered efforts to deliver timely services to veterans.
Modernization initiatives have been repeatedly delayed due to the complexity of overhauling these legacy systems.
Sears’ Decline
Sears’ failure to update its IT infrastructure led to inefficiencies in managing customer data and inventory.As competitors like Amazon and Walmart utilized advanced data analytics to optimize customer experiences and streamline operations, Sears was left with systems that couldn’t support modern data-driven strategies.
This contributed to their bankruptcy and market exit.
10. Unhappy Users
If employees are constantly complaining about system inefficiencies or difficulties, it’s more than just a frustration—it’s a sign that your technology is no longer meeting their needs.
Ignoring user feedback can lead to increased turnover or burnout.
A study by Gallup found that businesses with disengaged employees have 41% higher absenteeism and 17% lower productivity.
Example:
H&M’s Inventory Crisis (2018)
H&M’s outdated IT systems were at the heart of an inventory management crisis that left the company with over $4 billion in unsold merchandise.Employees struggled with the inefficiencies of the system, leading to low morale and poor customer service.
The crisis underscored the importance of aligning IT capabilities with evolving business demands to ensure staff satisfaction and operational efficiency.
Key Takeaways
Waiting too long to upgrade can cost more in the long run
Look for signs of inefficiency, security risks, and high maintenance
An upgrade can improve productivity, security, and scalability
Sources
Forbes: Downtime costs U.S. businesses $700 billion a year due to lost productivity
Riverbed Study: Slow applications cost companies $3 million annually
Accenture: 69% of businesses say legacy systems prevent the use of modern technologies
Cybersecurity Ventures: Cybercrime to cost the world $10.5 trillion annually by 2025
Tech Republic: 70% of scaling businesses struggle with legacy systems
Gartner: 72% of tech budgets now go to maintaining legacy systems
Deloitte: 57% of organizations spend more on maintaining outdated systems than on new technology
PwC: Companies enabling remote work see a 77% productivity boost
NewVantage Partners: 91% of executives cite legacy systems as the barrier to leveraging data
Gallup: Disengaged employees cause 17% lower productivity
