The hidden costs of using outdated technology

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8th February 2023

When your information system was first built, it was a significant investment to set it up. All that investment and the critical processes that rely on those systems can mean it is difficult to justify the cost. Yet in almost all cases, a new and more automated cloud-based system will end up costing you less in the long run. But the cost of acquiring a new system is not the only factor you need to consider when comparing systems.

Enterprise systems and application maintenance

As systems age, they need more specialist maintenance, as well as costly updates and licensing fees to keep them compatible with more modern systems. It has been estimated that the cost of maintaining outdated technology is around 75% of the average IT budget. As the system ages, the costs will continue to increase. Moving to a cloud-based solution can reduce costs while improving service levels.

Cybersecurity breaches

Older, outdated technology is more vulnerable to cyber-attacks and security breaches. IP and Data can be exposed if systems are no longer supported with security patches and updates. Data breaches cost an estimated $163 each per lost or stolen record.

Operational costs

Using outdated technology greatly burdens your operational costs via repetitive, manual processes. Automation redesign of business processes can reduce operational costs by up to 20%, and increase productivity by 6% per year. While data entry costs can be reduced by up to 75% with newer systems. This means staff could be achieving more to other more meaningful projects that add value to your bottom line.

Transaction costs

Making the switch from customer service to customer-led interactions quickly adds up to big savings. Providing access to digital options like self-service portals and apps offers customers greater convenience while reducing costs.


Outdated technology has been flagged for compliance measures. With every stage from employee to customer touchpoints under the microscope. With every process from:

  • money laundering
  • insurance fraud
  • privacy regulations
  • GDPR data protection
  • HR systems that ensure you are paying your staff their entitlements.

Outdated technology that struggles to keep up with changes quickly becomes a liability and could cost you millions. Non-compliance can also have more than just a financial cost for the business. Penalties can also include fines and possible jail terms for severe compliance breaches.

Knowledge and training costs

Maintaining outdated technology means hiring specialist developers, or calling them in for emergency repairs. Keeping and retaining the knowledge of outdated technology: which parts do what, how they fit together, and what to do when they break down, creates a dependency on the knowledge keepers and an ongoing training burden for organisations.

Customer experience

Customers expect to find exceptional service from any channel such as customer self-service, instant approvals and on-demand communications but adding these capabilities to outdated technology and applications is likely to be complex and expensive. Upgrading to cloud-based solutions that provide automation, broader channels of communication, greater scalability, and integrity of data analytics lead to intuitive personalised marketing and customer service.

Employee experience

If your employees are frustrated, unproductive and unmotivated, your outdated technology could be to blame. Their frustration from working on outdated technology with overly manual tasks, customer frustrations from constant downtimes and technical troubles can leave them looking elsewhere. High staff turnover isn’t only bad for morale it also costs a lot to onboard each new employee.

You can choose to stick with the status quo and accept these costs or explore the benefits of digital transformation. MTS IT can help unify disparate technologies allowing you to replace outdated technology and applications with a single solution. This can help reduce costs, improve customer, and employee experience and streamline compliance.

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