The Cost of Doing Business on Legacy Systems

The Cost of Doing Business on Legacy Systems

By: Alex Haab, Product Marketing Manager

Today, every business relies heavily on technology as the various software products keep businesses running and competitive within a specific industry. The automotive industry is no exception. Many new car dealerships still use legacy systems. In this case, a legacy system is any software or hardware that was once widely used but has now been replaced by newer, faster technology.1 Constantly keeping up with the ever-changing technology can be expensive and laborious leading many businesses, like car dealerships, to keep their legacy systems. What many decision makers do not realize is there are many hidden costs associated with the older technology.

One of the biggest issues with older systems is the cost of maintaining the infrastructure. While everything around these systems is advancing, the infrastructure of the software is remaining dated leading to constant maintenance. Businesses today report 60-80% of their IT budget is used to maintain aging legacy systems.2 If a new car dealership chose to convert to a newer system, that large portion of the budget could be reinvested in ways to help grow the business.

Most software is now hosted on a cloud so information can be accessed anytime, anywhere; however, many of the older cloud based systems were not designed to be on the cloud. This leaves businesses with the headache of having to take on maintenance costs that newer cloud based technology wouldn’t have. Keep in mind that finding the right people to maintain and fix those legacy systems are becoming harder to find and more expensive to hire. Many of the hidden costs associated with legacy systems are passed along to you, the customer, in the form of large monthly fees.

Maintaining your new car dealership’s outdated system is important because of the ever looming downtime. Every minute of downtime is losing you money and business. Other possible costs associated with downtime include:

  • Loss of return customers
  • Workforce downtime costs
  • Costly IT system restoration
  • Company reputation damages

Besides downtime, security is another important factor surrounding technology. With the advancements in the industry, many expect their personal and customer’s information to be safe. With the older systems, dealerships are paying big money to make the updates and repairs in order to achieve a level of security the customer’s expect. As each day passes, hackers are finding new ways to access important consumer information. The maintenance on legacy systems can not keep up with the sophistication of malware and data breaches leaving your legacy software a prime target.1

People are creatures of habit so the thought of changing something as big as a Dealer Management System, brings stress to decision makers. If the staff is comfortable with the software and it is able to maintain business many do not see a reason to change. Add in the investments made on a legacy system to keep it running, many decision makers will not want to convert to a newer software. Several factors go into making the decision to leave the legacy system in the past, but it is important for decision makers to look deeper than the surface to determine if the time, energy and money is worth the change.

Legacy systems are holding your dealership down, so now is a perfect time to get ahead of the game and bring your dealership’s technology into the new, technological era. To receive more information on Dominion VUETM and how it will help your new car dealership, call 877.421.1040.


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