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Your browser does not support the audio element.In 2022, Rogers Communications, one of Canada’s largest telecom providers, experienced a nationwide outage that left 12 million customers without internet and phone services. Businesses were unable to process transactions, emergency services were disrupted, and hospitals struggled with patient records. The root cause? A failure in the company’s outdated core infrastructure, which could not handle a routine update, resulting in a catastrophic failure that lasted nearly 24 hours. Rogers later admitted that its systems were not resilient enough to prevent such a widespread collapse (globalnews.ca)
This incident highlights a growing concern for organizations of all sizes – the dangers of relying on legacy systems. While these older technologies may have served businesses well for years, they now pose serious risks, from cybersecurity vulnerabilities to operational inefficiencies, rising costs, and compliance failures. Companies that continue to delay modernization are not just risking downtime; they are jeopardizing their long-term viability.
The Cybersecurity Threat: A Time Bomb Waiting to Explode
Perhaps the most urgent risk of legacy systems is their vulnerability to cyberattacks. As technology evolves, hackers increasingly target outdated software because it lacks the latest security patches. In 2021, a ransomware attack on Colonial Pipeline, a major U.S. fuel supplier, resulted in the shutdown of gas distribution across the East Coast. The attack, which was made possible due to an outdated VPN system with no multi-factor authentication, forced the company to pay $4.4 million in ransom just to regain control of its operations. This case illustrates how aging systems can become an easy entry point for cybercriminals, leading to devastating financial and reputational damage (npr.org).
For mid-sized businesses, the stakes are even higher. Unlike large enterprises that can absorb the financial impact of a cyberattack, many mid-sized firms struggle to recover. A 2022 report by IBM Security found that 60% of small and mid-sized businesses close within six months of a major cyberattack due to the costs of remediation and loss of customer trust (stratusinfosystems.com).
Operational Inefficiencies: When Technology Slows Business Down
Beyond security, legacy systems often create inefficiencies that hinder growth. Older platforms lack the ability to integrate with modern cloud-based tools, forcing employees to spend unnecessary time on manual processes. In 2018, the Canadian federal government implemented the Phoenix Pay System, intended to modernize payroll operations. Instead, the system failed to integrate with existing records, leading to massive errors—employees were underpaid, overpaid, or not paid at all. By 2023, the government had spent over $2.4 billion trying to fix the issue, proving how reliance on outdated or poorly integrated systems can spiral into an operational nightmare (spectrum.ieee.org).
For mid-sized companies, inefficiencies may not always be as dramatic, but they add up. A study by Forrester Research found that employees lose an average of 26% of their workweek dealing with slow or outdated technology—time that could otherwise be spent on high-value tasks.
The Rising Costs of Maintaining Legacy Systems
Many business leaders hesitate to upgrade legacy systems due to cost concerns, but in reality, maintaining outdated technology is more expensive in the long run. A 2022 Deloitte report found that companies spend an average of 60-80% of their IT budgets just to keep legacy systems running, leaving little room for innovation or modernization (www2.deloitte.com).
Older software also creates hidden costs, including:
- Expensive maintenance contracts: Vendors often charge premium rates to support aging technology.
- Scarcity of skilled professionals: Many IT specialists no longer work with outdated programming languages like COBOL or Fortran, making it difficult to find and hire experts.
- Frequent downtime and lost productivity: System failures become more common as aging infrastructure deteriorates.
For instance, in 2023, the City of Dallas suffered a major IT outage after an aging mainframe system failed, halting essential public services. The city had delayed system upgrades for years due to budget concerns, but the outage ultimately cost millions in emergency repairs and lost productivity (bleepingcomputer.com).
Compliance Failures: The Hidden Legal Risks
Regulations surrounding data privacy and security have become increasingly strict in Canada and the U.S. Laws like GDPR, CCPA, and Canada’s Digital Privacy Act require businesses to safeguard customer data, and failure to do so can result in severe penalties.
In 2022, Desjardins Group, one of Canada’s largest financial cooperatives, suffered a data breach that exposed personal information of 4.2 million customers. Investigations revealed that outdated security protocols contributed to the breach, leading to a $200 million settlement and increased scrutiny from regulators (bankinfosecurity.com).
For mid-sized businesses, compliance failures can be just as damaging. Unlike large enterprises that can afford legal battles, most mid-sized firms face crippling fines or long-term reputational damage.
The Inevitable Need for Modernization
While transitioning away from legacy systems may seem overwhelming, the risks of inaction far outweigh the costs of modernization. Companies that delay upgrading their technology fall behind competitors, lose customer trust, and expose themselves to unnecessary security threats.
However, modernization doesn’t have to happen overnight. Many businesses opt for a phased approach, gradually replacing outdated components while minimizing disruption. Adopting cloud-based solutions, automation tools, and cybersecurity upgrades can make a significant impact without requiring a complete system overhaul all at once.
The Litcom Approach
At Litcom, we specialize in helping mid-sized businesses transition away from legacy systems with minimal risk and disruption. Our approach includes assessing vulnerabilities, identifying cost-effective modernization strategies, and implementing secure, scalable IT solutions tailored to your industry. Whether your organization needs enhanced security, cloud integration, or compliance upgrades, we provide expert guidance to future-proof your business.
Don’t wait for a disaster to force your hand. Contact Litcom today to take the first step toward a modern, secure, and competitive IT infrastructure.
