Meeting regulatory expectations depends on a robust compliance management system. Here's how to decide if yours is worth replacing.
Today's technology solutions make achieving compliance a reality for organizations of all sizes. Yet regardless of a compliance management system's sophistication, what was once cutting-edge before too long becomes obsolete. At that point, the question becomes: Should we invest in replacing a legacy platform with an updated solution?
In order to make that determination, finance leaders must understand not only the cost associated with a new technology purchase but also the costs incurred by continuing to support the existing platform.
To help your organization decide when it makes sense to renew its compliance-related technology, here's an overview of the risks and costs that come with maintaining outdated technology.
Obsolete Technology Sends the Wrong Message to Regulators
While compliance regulations stop short of recommending particular technologies, there are times when achieving compliance does hinge on the use of the latest technology. So if your organization fails to comply with a regulation, the existence of an outdated software solution might call into question your commitment to compliance and may, in turn, play a role in a regulator's decision to assess a steeper penalty or fine.
Older Technology Costs More to Maintain
Despite your IT department's best efforts to reign in costs, as a technology ages, the costs associated with supporting inevitably it grow. Eventually, the costs of merely maintaining software may outgrow the investment in a replacement solution. The longer a technology remains in place, the greater the likelihood that it will experience periodic outages. Such disruption comes with costs, from a loss of productivity to increases in IT support costs and employee stress. If the outage impacts an organization's front-line operations, customer satisfaction can suffer, too.
Software Providers Stop Supporting Legacy Technology
At some point in every technology's life cycle, the software developer stops supporting the platform. When that happens, security updates no longer appear, leaving your business exposed to attack by cybercriminals that focus on exploiting weaknesses in legacy systems.
Legacy Technology Can Inhibit Growth
Relying on outdated compliance management systems makes it exponentially more difficult to evolve the business to respond to competitive pressures and meet customer needs. Consequently, a legacy system can prevent the adoption of other new technology, potentially placing the business at a sustained competitive disadvantage.
Outdated Technology Requires Manual Workarounds
The longer a technology remains in place, the greater the likelihood of employees creating manual workarounds to overcome the software's limitations, such as its inability to respond to changes to existing regulations. Such manual processes can saddle the business with additional costs in the form of employee overtime and a corresponding loss in productivity.
While the decision to invest in a new compliance management system can come with a hefty price tag, organizations sometimes spend more on propping up and extending the life of outdated technology. So before dismissing the purchase of new technology as being overly expensive, make sure to identify all of the costs that come with maintaining obsolete products. You might be surprised by what you find.
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