The Hidden Costs of Legacy Systems: Why It’s Time to Modernize

Many public agencies still use outdated technology systems – sometimes decades old. The rationalization is “they still work.” But at what cost?

Legacy systems come with hidden costs. They are “hidden” because they’re not always obvious in a budget. And the cost is not always monetary.

Many government agencies and departments become blind to inefficiencies and workarounds. They become comfortable with “the way it’s always been done,” even if that means less productivity, increased security risks, and limited flexibility.

What seems cost-effective today can quietly drain budgets and erode public trust tomorrow. It’s time to rethink “good enough.”

In this article, we will explore the hidden costs of legacy systems and the real-world benefits of modern systems. And we’ll do it through the lens of three US cities that have experienced these benefits firsthand.

What Are Legacy Systems?

Legacy systems are outdated technologies that struggle to meet modern demands. Oftentimes, these systems aren’t supported by vendors any longer, which increases maintenance costs and cybersecurity risks. They may not be compatible with newer tech either.

The result? Legacy systems often cause inefficiencies like delayed operations, slower response times, inability to share data, etc. They may struggle to comply with new regulations or adapt to digital/cloud services. Combined, these factors lead to manual workarounds that waste time and resources.

By replacing legacy systems with modern tech, your agency can operate more effectively in a digital world. Until then, your agency may have hidden costs it’s not even aware of.

Hidden Costs of Legacy Systems

Maintenance and Support Costs

Legacy systems might seem cheaper to keep, but the hidden costs add up fast. Maintaining outdated hardware and software often means expensive repairs, workarounds and patches just to keep things running.

Agencies must also keep IT staff on hand who know how to navigate aging systems. Not only do you have to pay salaries and benefits for these personnel, but many of these experts are retiring or moving on. The talent pool is shrinking.

The longer an agency holds on to legacy tech, the more it costs to prop up. These systems weren’t built for today’s demands, and the cost of keeping them alive only grows with time.

Security Risks

Legacy systems increase security risks. Without regular patches and updates, they become easy targets for hackers. Each vulnerability becomes a potential open door for cybercriminals looking to exploit system weaknesses. Some ransomware is even designed specifically for known vulnerabilities in legacy systems.

Outdated on-prem systems were never designed to defend against modern threats. As a result, agencies face a higher risk of data breaches, ransomware and other cyberattacks. The longer a legacy system is in place, the more exposed it becomes.

If and when a breach does occur, it affects more than just your data. It also impacts public trust, business continuity and public service delivery.

Decreased Productivity

With legacy systems, you often accomplish less with more resources. But many agencies don’t know anything different. Have you become accustomed to manual processes and duplicate data entry? These inefficiencies slow down operations.

The lack of integration doesn’t help either. If you can’t integrate with modern systems, it’s more difficult to share data across departments and agencies. It forces staff to waste time rekeying the same information into different systems.

Combined, these inefficiencies lead to lower response times, longer wait times for citizens and frustrated employees (who have to use outdated software/hardware). In a challenging job market, as agencies struggle with hiring and turnover, you need a modern solution that lets you accomplish more with less resources.

Limited Scalability and Flexibility

Public administrators are expected to comply with new and updated regulations. You’re also expected to meet evolving citizen expectations and service demands. Unfortunately, legacy systems weren’t designed to scale – at least, not easily.

Adding new features, users, or integrations often requires custom workarounds or vendor support. Legacy systems can’t easily connect with cloud solutions or support cross-agency collaboration.

You can try to scale, but it’s usually an expensive, slow, and inefficient process. With how frequently technology and service needs change, scaling legacy systems simply isn’t viable. They are too inflexible.

Benefits of Modern Public Admin Systems

Improved Security and Compliance

Modern public administration software is built with security in mind. It includes automatic updates that patch vulnerabilities quickly – no manual effort required. That means agencies stay protected against the latest threats without falling behind.

Advanced security measures like encryption, access controls and real-time monitoring help detect and block attacks before they do damage. Cloud-based systems also offer disaster recovery tools that keep data safe and accessible, even if local systems fail.

Compliance is easier too. Many platforms are designed to meet strict federal and state standards out of the box. No guesswork. No retrofitting. With modern software, public administrators can feel confident in their data security and compliance standards.

“Every year, Lakeland has a hurricane and that entails a significant amount of reporting and documenting…last year, we were able to use EAM in offline mode and each team had a person dedicated to just documenting what was going on in the field…then all of that data was uploaded when they came back into the office so we could easily provide it to payroll and FEMA reporting, almost within days.”

Lisa McCall, Systems and Applications Manager, City of Lakeland, FL

Increased Efficiency and Automation

Modern public administration software helps agencies work faster and smarter. It replaces manual, paper-based processes with automated workflows that cut down on delays and duplicated work.

“Community Development has resolved our paper problem…all our paper applications are now digitized, literally. We are probably about 95–99% paperless. So we don’t need a building like the Smithsonian Institute to cover all that paper. We can do it all in the cloud.”

Mike Giroux, Business Analyst, City of Greely, CO

With real-time access to data, your staff can make informed decisions on the spot without waiting or digging through files. That means better service for citizens and faster responses when it matters most.

Mobile capabilities take things even further. Employees can access and update information from the field, whether they’re conducting inspections, reviewing permits or responding to service requests.

As Fitzgerald Water, Light and Bond Commission of GA discovered firsthand, modern solutions result in less busywork, fewer errors and more time spent on what really matters: serving the community.

Although already customers, Fitzgerald adopted the CentralSquare NaviLine system in 2018. It was the one-stop solution they were looking for. As a cloud-based solution, NaviLine helps them streamline and manage many administrative tasks and processes: general ledger, accounts receivable, payroll, fixed assets, purchasing and inventory, and utility billing.

“We’ve automated the utility billing. The product works seamlessly… we have very few errors in the billing process, which is great for our citizens.”

Donna Waller, Finance Director and Business Office Manager, Fitzgerald Commission

Cost Savings Over Time

Public admin systems help agencies save time and money. It speeds up services, reducing the time staff spend on manual tasks and paperwork. And it empowers your agency to do more with less personnel.

Thanks to self-service portals, residents can pay bills, submit requests, or find information without tying up employees. That reduces call volumes and walk-ins, freeing your teams to focus on more complex work. Just ask Fitzgerald Water, Light and Bond Commission.

They moved to the cloud in 2007, saying goodbye to their on-prem system (the IBM AS/400). Since then, Fitzgerald has saved money on IT personnel, relying on CentralSquare to take care of most IT responsibilities.

The residents of Fitzgerald, GA have benefitted from NaviLine as well. With the built-in Citizen Engagement Portal, citizens can access and pay their utility bills online at their convenience.

“Our company moved to the cloud in 2007… there’s not a need for on-site IT personnel and CentralSquare takes care of all of those IT needs for us.”

Donna Waller, Finance Director and Business Office Manager, Fitzgerald Commission

Over time, these efficiencies add up. Faster services, automated processes, and data accessibility lead to long-term savings for your agency and community.

Scalability and Future-Readiness

Unlike legacy systems, modern tools are designed to grow with your community. Policies shift, populations expand, and technology evolves. When these things inevitably occur, cloud-based solutions will scale and adapt.

Today, public administration software is designed for flexibility. You can quickly update workflows, add new services or integrate with other tools. This keeps your operations aligned with today’s needs and tomorrow’s demands. The City of Lakeland, FL understands this better than most.

Three of their departments – Public Works, Parks and Recreation, and Cultural Arts – use Enterprise Asset Management by CentralSquare. Modern EAM software has allowed them to meet the demands of a growing population of 120,000+ people. And despite Lakeland being in a hurricane corridor, the city can confidently complete documentation and FEMA reporting for reimbursement of emergency services.

“We were looking for a company that was mobile, flexible and allowed us to transition from an antiquated system. We have gained leaps and bounds by moving to this application.”

Lisa McCall, Systems and Applications Manager, City of Lakeland, FL

Whether it’s new regulations, increased service requests, or FEMA reporting post hurricane, modern systems scale without breaking stride. Are you ready to future proof your agency?

Upgrade and Save Today

Many public sector agencies and departments still rely on legacy systems, unaware of the hidden costs associated with it. As seen above, cities like Greeley and Lakeland have discovered the benefits of a modern public administration system.

CentralSquare provides a variety of solutions for public administrators, including Asset Management, Community Development, Citizen Engagement, Utility Billing and much more. Schedule a discovery call today to learn how our software can help your agency modernize and save money.