Enterprises want to tackle technical debt, but they’re caught in a vicious ‘legacy dependency’ cycle – and it’s costing them customers
Technical debt has been a long-running problem for enterprises, and with big money AI adoption projects on the line, the stakes have never been higher.
That’s according to a survey conducted by Savanta on behalf of Pegasystems, which found more than two-thirds (68%) of respondents said legacy systems and applications are hampering their ability to embrace new technologies.
Tackling technical debt is no mean feat, however. According to Pegasystems, many enterprises are now caught in a cycle of “legacy dependency”, meaning they can’t stop supporting business critical legacy applications.
Nearly half (48%) of enterprise respondents specifically highlighted this issue as a key factor in sluggish modernization efforts, while 68% noted legacy systems are preventing them from improving operational efficiency.
Costs are also a common pain point for IT leaders in this regard, with (44%) of respondents having said time spent on maintenance was inflicting a significant impact on budgets.
The scale of the problem varies on a case by case basis, Pegasystems found. Some 47% of respondents revealed their oldest legacy applications were aged between 11-20 years old, meaning they’re simply incapable of meeting modern business requirements.
Don Schuerman, chief technology officer (CTO) at Pegasystems, said the study shows the significant problems faced by enterprises trying to keep pace with current industry trends.
“This study highlights how easy it can be for enterprises to get dragged down by outdated systems that are unwieldy to use and resource-intensive to maintain,” he said.
Schuerman added that without drastic action, legacy tech will continue to perpetuate an “organizational culture of waste”.
Wasted resources and finances are just one aspect of the issue, alternative research shows. A study from Daisy Corporate Services earlier this year found legacy technology and infrastructure now accounts for more than a third (37%) of overall power consumption at enterprises.
The study detailed serious concerns among IT leaders over compounding costs and the impact of legacy applications on sustainability goals.
The long-term impact of legacy technology
While enterprises face a confluence of technical considerations when addressing legacy technology, the long-term business implications are equally alarming, Schuerman warned.
Simply put, failing to modernize has an adverse effect on customer satisfaction levels.
“While the bottom-line cost to businesses is significant, the real cost of technical debt is its impact on the experiences that today’s customers both demand and deserve,” he said.
The study found an overwhelming majority (88%) of enterprises are increasingly concerned about the impact of legacy technology on their ability to remain competitive.
More than half (57%) said their reliance on legacy systems were the “likely” cause of customers defecting, for example.
These findings come in the wake of a consumer-focused study from Pegasystems earlier this year, which highlighted a growing sense of frustration over lackluster service delivery.
The study showed consumers are placing increased pressure on enterprises to improve user experiences, with more than three-quarters (77%) of respondents calling on organizations to ramp up investment in this regard.
User experiences have deteriorated significantly in recent years, respondents added, with more than half (56%) revealing interactions with businesses were now worse than they were a decade ago.
The combination of technology considerations and business concerns mean enterprises face a balancing act when embarking on a modernization program, the study found.
Three-quarters (74%) of enterprise respondents said their business prioritizes investments that focus on improving profitability rather than ways to improve customer experiences.
How Pegasystems plans to tackle legacy tech
The findings from the Pegasystems survey were announced at the company’s annual PegaWorld conference in Las Vegas this week. At the conference, the company unveiled a slew of new product updates, with one particular reveal targeting legacy debt specifically.
New capabilities for Pega Blueprint, for example, aim to “significantly accelerate” digital transformation initiatives. Updates to the platform include new agentic AI tools which help enterprises overhaul legacy systems and boost application modernization.
The tool works by allowing enterprises to upload documents, code analysis files, and even application screenshots.
Thereafter, the Blueprint platform “analyzes and synthesizes” these sources together to automatically suggest starting points for application modernization processes.
“This comprehensive approach gives business and IT teams a head start on their transformation projects while casting a wide net of legacy source information, enabling more informed decision and reduced iteration cycles,” the company explained.
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