What a 10-year-old information system costs you every year

Companies know exactly how much they pay to maintain an old system. Almost none know how much it costs them to still have it. The technical term is total cost of ownership (TCO), and maintenance is only a small part of it.

Four components of the real cost

1. 01Direct maintenance and licences. These are on your invoices.
2. 02Manual work around the system. If three people spend an hour a day re-typing data, at a labour cost of €25 an hour that is over €16,000 a year.
3. 03Outages. An hour when the warehouse or production stands still can cost thousands of euros.
4. 04Missed opportunities. Sales don’t get a feature because “our system can’t do that”.

The hidden fifth component: people leaving

You won’t find the most expensive item on any invoice. It’s the people who leave because they fight a tool from the last decade every day. Recruiting and onboarding a new person often costs a company several months’ salary, and an experienced colleague who leaves frustrated takes their know-how with them. Once you add staff turnover to the cost, the threshold for modernisation comes sooner than maintenance alone suggests.

Technical debt: the same topic in euros

Developers talk about technical debt like the weather: it’s everywhere, it’s intangible and it’s nobody’s fault. Finance directors, rightly, don’t respond to that. The language both sides understand is euros per month. Debt has three measurable components:

• Slower development: if a change that should take three days takes six in a cluttered codebase, the difference is a direct cost.
• Incidents: hours spent firefighting outages times the hourly rate, plus lost revenue during the outage.
• Onboarding: how many weeks it takes a new developer to become productive. In a healthy project perhaps two, in an indebted one as many as eight.

Once you know the debt costs, say, €8,000 a month, a €35,000 rebuild stops being a “developers’ wish” and becomes an investment that pays for itself in under five months. The opposite conclusion is just as legitimate: leave the debt alone in a module that never changes. Paying off debt that slows no one down is a luxury.

When to modernise, and when not yet

A simple rule of thumb: if the annual cost of the old system exceeds roughly a third of the price of a new solution, modernisation pays for itself in about three years. Below that threshold, it’s worth wrapping the system in a new interface and replacing it piece by piece, without downtime.

A risk that doesn’t accrue interest — it explodes

An old system isn’t just expensive, it’s fragile. It often runs on a version that no longer gets security patches, depends on one person who “knows where to kick it”, and restoring from backup was last tested years ago. This risk doesn’t show up gradually. It shows up all at once, at the worst possible moment. Modernising module by module reduces it from the first month, not only at the end.

The first step doesn’t cost hundreds of thousands. Just write down how many hours a month go into working around the system, what the last outages cost and what sales didn’t get because the system can’t do it. Worse than old technology is deciding without numbers.