Risk & Compliance: Are Legacy Systems becoming a Liability?

The authors of a 2023 audit report from the National Academy of Public Administration (NAPA) noted that the USDA faces significant risks as a result of their continued reliance on antiquated mainframe systems. Siloed legacy systems are a root cause of poor integration at the agency, the auditors found. In addition, a lack of technical knowledge and experience with mainframe systems, including a shortage of COBOL programmers, raises significant concerns.

Specifically, the NAPA audit focused on the USDA’s National Finance Center (NFC), stating that “NFC’s future is at risk without prompt action.”

That’s an alarming statement, – but for many organizations, the very real implications of reliance on legacy systems is starting to set in. The risks of doing nothing are substantial. And with every year that passes, the problem is getting worse.

In today's dynamic technology landscape, organizations must constantly seek ways to innovate, streamline processes, and enhance the services they provide. Although legacy mainframe systems have historically been robust and reliable, they are increasingly becoming liabilities if they’re not modernized; presenting risk and compliance concerns that organizations must address sooner rather than later.

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The Disappearing Pool of Mainframe Talent

Mainframe specialists are retiring. The number of IT professionals with expertise in these legacy systems is rapidly dwindling. As older experts leave the workforce, there's a decreasing pool of talent familiar with the nuances and intricacies of these systems. Unfortunately, very few new college graduates are stepping in to fill their shoes.

This trend poses a significant risk as organizations struggle to find the right talent to maintain, troubleshoot, or update their legacy systems. A lack of expertise can also lead to longer downtimes and costly mistakes.

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Obstacles to Agility & Innovation

The COVID-19 pandemic taught us a valuable lesson; agility is critical to both short-term profitability and long-term competitive position. Major changes often offer opportunity, at the same time that they introduce new threats. In today's fast-paced environment, agility is key. Organizations need to quickly respond to market changes, customer demands, or competitive pressures. Legacy systems, with their rigid architectures, hinder this agility, making it difficult for businesses to pivot or adapt to new opportunities.

Maintaining and operating legacy mainframe systems can be costly. Often, the focus is on keeping the system running rather than on innovation. Resources that could be used for business growth or digital transformation initiatives are locked up with the task of keeping older systems running.

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Integration Challenges

As organizations adopt new technologies, integrating them with legacy mainframes presents an especially complex challenge. Legacy systems were not designed for today's interconnected world, and creating interfaces between old and new technologies can be resource-intensive, prone to errors, and potentially insecure.     

Compliance often involves sharing data and information across different systems and departments. Legacy systems may not integrate well with modern tools and technologies, making it difficult to ensure data consistency and compliance across the organization.

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Limited Adaptability to New Regulatory Demands

As industries evolve, so do the regulatory standards that govern them. New laws, rules, and regulations are continually being introduced, demanding more transparency, security, and data integrity from organizations. Legacy systems, designed in an entirely different era, often lack the agility to adapt to these changes. Meeting modern compliance requirements might entail complex workarounds or even manual processes, both of which increase the risk of non-compliance that can result in fines, legal actions, and damage to an organization's reputation.

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Security Vulnerabilities

Although mainframes have a well-deserved reputation for security and stability, some systems are susceptible to cybersecurity threats, as vendors discontinue support, including the provision of security updates or patches. The threat environment is constantly changing, and IT administrators must evolve to meet a host of new challenges. Over the long term, the discontinuation of support for systems or specific applications will steadily increase the likelihood that critical systems could be exposed to potential breaches.

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Vendor Support

If the vendors of legacy systems stop providing updates, patches, and support, it can create a compliance risk. Organizations may find themselves unable to address security vulnerabilities or adapt to changing compliance requirements. Moreover, vendor lock-ins can have a significant impact on IT budgets.

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Business Continuity

Legacy systems may not have the disaster recovery and business continuity capabilities required to meet compliance standards. This can leave organizations vulnerable to disruptions and non-compliance consequences in the event of system failures or disasters.

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Legacy systems, once the backbone of many organizations, are now revealing their age and associated risks. To mitigate them and maintain compliance, organizations often consider modernization efforts, which can involve upgrading, replacing, or migrating away from legacy systems to more secure and compliant solutions. However, such projects should be carefully planned and executed to minimize disruptions and ensure continued compliance throughout the transition process.

Proactively addressing these challenges not only ensures compliance and reduces risk but also positions the organization for future growth and innovation.

Ready to secure your organization's future? Reach out to the mainframe modernization experts at Astadia to discuss your project.