5 Signs Your System Is Outdated
February 20, 2024
Read Time: 6 minutes
Data & Governance
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Staying up to date with the latest technology is crucial for the success and competitiveness of any business. Assessing the signs of an outdated technology system, such as security risks, modernization needs, integration compatibility, performance, and data silos, can help you make informed decisions about when to modernize technology infrastructure.
As you consider your firm’s business trajectory over the next 5 to 10 years, you’ll want to carefully gauge how your current operating model and infrastructure can deliver on longer-term goals. Evaluating key factors, and how they impact processes, products, and people can indicate when your firm might be ready to modernize its infrastructure.
Proactively embracing modern solutions allows your firm to lay the groundwork for long-term success.
As you explore the opportunities and challenges of migrating your technology, we’ve identified 5 factors to help evaluate the potential need for system migration.
One of the most significant signs your technology system is outdated are the elevated security risks it exposes your business to. Older software often becomes vulnerable to security breaches when new patches are no longer released, updates cannot be applied, or the vendor no longer supports them. The result is that systems are exposed to potential threats. This high fragility compromises the security of databases and applications, putting sensitive data at risk.
Inadequate back-up solutions and services raise further security risks. Without robust measures in place, there can be an elevated risk of data losses. In the event of a security breach or system failure, the absence of reliable alternate solutions can threaten the confidentiality and integrity of sensitive information or even reputational consequences, including legal and financial liabilities.
Elevated level of security risk is often the first warning for firms to take action.
Upgrading to a more modern and secure technology infrastructure can be an essential way to safeguard against potential security breaches and data loss and shore up your firm’s overall security posture.
Despite higher technology budgets, transformation efforts often lag due to the costs of maintaining disjointed applications that rely on outdated technology stacks. Years of add-on integrations heighten the complexity, making infrastructure a challenge to untangle. For firms having to invest in cycle upgrades every few years, evaluating the benefits of a cloud-based, software-as-a-service (SaaS) model could prove beneficial.
Legacy systems often require extensive customization and integration to meet the shifting needs of a business. However, these add-on integrations can also create a web of complexity that hinders an organization’s ability to innovate and adapt quickly.
Cloud-based solutions offer a more agile and scalable infrastructure that can easily integrate with other systems and applications. This allows for faster deployment of new technologies and updates, reducing the dependence on lengthy upgrade cycles with software vendors.
Instead of investing in expensive hardware and software licenses, companies can leverage the scalability of cloud services, eliminating the need for upfront capital expenditures and allowing organizations to allocate their technology budgets more strategically.
In addition to the technical benefits, a cloud-based, SaaS model also improves collaboration and productivity within the organization. The ability to access applications and data from anywhere, at any time, enables teams to collaborate seamlessly, regardless of their physical location or time zone.
In today’s interconnected world, firms must be able to connect their technology ecosystem with other existing applications, external systems, data vendors, and third parties. Establishing connectivity and integrating data from various sources is paramount for streamlined operations, growth, and a competitive edge.Firms must be able to access and analyze data from various sources so they can make informed decisions and effectively manage investments. Integration incompatibility can lead to inefficient and manual processes for data entry and reconciliation, resulting in wasted time and resources. What’s more, it can also hinder collaboration and communication with external partners and clients. The ability to quickly and securely share information and insights with stakeholders is essential for maintaining strong relationships and staying ahead of the competition.
To overcome integration incompatibility, investment firms need to prioritize flexible technology solutions. Cloud-based platforms and APIs can provide the necessary infrastructure and tools to seamlessly integrate with external systems and data vendors. An efficient and secure exchange of data enables funds to access the information they need when they need it.
Inconsistent or declining performance is often a clear sign your technology systems need an upgrade. Running on inefficient and outdated software can result in lagging functionality, leading to increased resource consumption and higher rates of system failure.
Technology systems unable to keep up with the demands of your business can be a major hindrance to growth and success. Tasks that should be completed quickly and efficiently end up taking longer, frustrating users, and resulting in the potential loss of business opportunities.
Newer technologies are designed to handle larger workloads, process data faster, and provide more reliable performance. This, in turn, improves efficiency, reduces downtime, and increases overall productivity.
As an added benefit, modern systems often come with enhanced features and functionalities that can streamline processes and make tasks easier to accomplish, resulting in time and cost savings, as well as improved client satisfaction.
Investment firms often wrestle with the challenge of managing vast amounts of data spread across disconnected systems, diverse data models, and various sources. This fragmented approach can hinder a firm’s ability to effectively meet operational, investor, and regulatory obligations. Opaque visibility can also impede firms from identifying emerging trends, risks, and opportunities in the market. Redundant data entry and reconciliation efforts can also cause unnecessary duplication of work and risk of errors. In turn, this wastes valuable time and resources and introduces the potential for inconsistencies in data, which can have serious repercussions in terms of reporting and compliance.
To overcome the challenges posed by decentralized data silos, you’ll want to prioritize a thoughtful and comprehensive data strategy. This strategy should focus on unifying data from disparate systems and sources, automating data capture and integration processes, and optimizing data accessibility for stakeholders.
One approach to achieving unified data is to implement a centralized data repository that acts as a single source of truth and provides a standardized and consistent view of information across systems. A centralized repository can help improve data quality, reduce redundancy, and enhance data governance and security.
Optimizing data accessibility for various business users and stakeholders with user-friendly data visualization and reporting tools can also go a long way toward enabling your teams to easily access, analyze, and derive meaningful insights from data.
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If any of these warning indicators sound familiar, you’re not alone. Modernizing tech platforms is an immense and complex undertaking, and it’s not a path that firms should take alone. As you evaluate your existing technology, migrating legacy applications and systems to cloud-based data platforms can offer significant benefits.
For a comprehensive perspective, read Arcesium’s Best Practice Guide: Migration to Modern Technology Platforms.
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