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The hidden costs of legacy systems: why upgrading pays off

The hidden costs of legacy systems: why upgrading pays off
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When is the last time your organization audited your technology systems? Your technology plays a crucial role in driving efficiency, security, and growth. Yet, many companies remain tethered to outdated legacy systems, unaware of the hidden costs they incur daily. These costs extend beyond standard maintenance fees; they affect productivity, revenue, business performance, and security. While the upfront investment of upgrading a tech stack may seem daunting, the long-term benefits far outweigh the expenses.

According to a McKinsey survey, businesses allocate 40% of their IT budgets to addressing technical debt, and 10-20% of the technology budget dedicated to new products gets diverted to handle issues related to technical debt. This inefficiency drains valuable resources that could otherwise be invested in innovation and growth. By managing tech debt proactively, companies can free up to 50% more of their engineers' time for strategic initiatives that drive business success.

 

Updating your technology stack influences many things, including business productivity, efficiency, and revenue. Leveraging modern customer relationship management systems (CRMs) like HubSpot, Salesforce, and Magento can help enhance operational efficiency, centralize data, and offer stronger potential for growth.

 

The hidden costs of legacy systems

 

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1. Reduced productivity and increased labor costs 

Outdated systems slow down employees, requiring them to spend extra time on routine tasks instead of high-value work. Legacy software often lacks automation, seamless integrations, and user-friendly interfaces, forcing employees to perform manual processes that could be streamlined with modern solutions.


Key impacts:

  • Increased operational inefficiencies
  • Higher labor costs due to additional work hours
  • Employee frustration, leading to higher churn rates

With modern systems, businesses can automate processes, integrate workflows, and optimize employee efficiency, reducing labor costs and improving productivity.

 

2. Impact on business performance and efficiency

Companies relying on legacy systems struggle to keep up with evolving market demands. As technology advances, older systems become increasingly incompatible with modern applications and services. This results in fragmented workflows, operational bottlenecks, and poor customer experiences.
McKinsey’s study found that engineers spend up to 50% more time on work that supports business goals when tech debt is managed efficiently.


Upgrading your tech stack can:

  • Improve internal processes and collaboration
  • Ensure seamless customer experiences
  • Enable scalability and business agility

Investing in modern technology such as Salesforce, HubSpot, and Magento/Adobe Commerce can unify data, automate workflows, and enhance overall business performance.

 

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3. Revenue loss from inefficient systems

Legacy systems can directly impact a company’s bottom line. Inefficiencies lead to increased operational costs, lost sales opportunities, and customer churn. For example, slow eCommerce websites deter potential buyers, and outdated CRMs lead to poor customer engagement and retention.


Hidden revenue costs of outdated technology include:

  • Delayed response times and missed sales opportunities
  • Increased downtime leading to revenue loss
  • Poor customer experiences reducing repeat business

Modern systems improve page speed, customer relationship management, and data-driven decision-making, ultimately driving higher revenue.

 

 

“With the Magento and Salesforce integration, business is more holistic and offers a more complete and up-to-date picture of all our customers, their purchasing behaviors, product preferences, etc. This data forms the foundation of a strong brand that can deliver a top-quality customer experience informed by data.”

Stuart Kiely Headshot
Stuart Kiely, Director of Technology, Matouk

4. Security risks and data protection

Cybersecurity threats are at an all-time high, and outdated systems pose significant vulnerabilities. Legacy software often lacks the latest security patches, leaving businesses exposed to data breaches, compliance violations, and cyber-attacks.

 

Why security upgrades are critical:

  • Protects sensitive customer data
  • Reduces risk of cyber threats and costly breaches
  • Ensures compliance with industry regulations (e.g., GDPR, CCPA)

Modern CRMs and cloud-based platforms offer robust security features, encryption, and automatic updates to safeguard business and customer data.

 

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Eliminate technical debt: getting started

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By proactively managing and upgrading your tech stack, you can:

  • Reduce ongoing maintenance costs and free up budget for innovation
  • Enhance employee satisfaction and productivity by eliminating inefficient workflows
  • Improve brand reputation by offering seamless, secure, and modern customer experiences

Our team specializes in helping businesses transition to modern, efficient, and secure technology solutions. Our expertise includes:

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Book a consultation call today

Upgrading your tech stack is not just an IT decision—it’s a business growth strategy. Don’t let outdated systems hold your company back. Book a consultation call with us today to discuss your business goals and tech needs.

 

 

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